TUCSON, AZ - A major apartment investment firm is unloading its Tucson properties. Denver based Apartment Investment & Management Co. has sold the 253-unit Quail Ridge Apartments, 4500 E. Sunrise Drive, and 411-unit Stonybrook Apartments, 4225 N. First Ave., for a combined $32.7 million, according to an agent involved in the deals. The buyer was Holualoa Cos., an international property investment firm headquartered in Tucson.
Jack Hannum, a CB Richard Ellis agent who helped represent the seller, said AIMCO still owns one property in Tucson, La Jolla de Tucson, at 444 W. Orange Grove Road, which is for sale. A publicly traded real estate investment trust, AIMCO owns about 750 multifamily buildings across the country, according to the company's Web site. Hannum said the company is currently selling about 90 properties.
Mike Kasser, president of Holualoa Cos., said his company is placing a bet on the long-term success of the apartment market in Tucson rather than a quick return on its investment. "We're not looking to hit a home run," Kasser said. "We're looking to hit a single or a double." The average vacancy rate at apartment complexes in Tucson with 40 or more units jumped from 6.6 percent in the first quarter of last year to 8.4 percent in the first quarter of this year, according to statistics from Phoenix-based apartment market research firm RealData Inc.
During that time, the average rent for a 730-square-foot apartment rose just 2.3 percent, from $628 to $642, according to RealData. Apartment owners have blamed the state's employer-sanctions law and the real estate slump for pushing up vacancies. The employer-sanctions law, targeting employers of undocumented workers, is believed to have caused an exodus of illegal-immigrant renters. Many would-be sellers of single-family houses and condominiums are also looking to rent out their properties instead, providing more competition for apartment owners.
Hamid Panahi, a multi-housing specialist for Marcus & Millichap, said some out-of-state investors have lost interest in Tucson, although he could not speak about AIMCO specifically. However, Panahi stressed that the long-term outlook for Tucson remains strong. Apartment building in Tucson is minimal, leaving no oversupply of units on the rental market, he said. Also, student housing is still a shining star, he said. "There's still good deals out there," he said. Individually, Quail Ridge sold for $13.2 million, or about $52,000 per unit, and Stonybrook sold for $19.5 million, or about $47,500 per unit.
Kasser, of Holualoa, said his company has experience with owning apartment properties in Tucson. Its portfolio includes the Fox Point, Mission Creek and Sandpiper apartment complexes in Tucson, as well as Sandstone Ridge Apartments in Sahuarita. The company owns about 50 investment properties in the United States, Mexico and Europe, Kasser said.
Source: AZstarnet.com