Two deals: Foothills Mall and seven apartment complexes sold
Lakeside Casitas, part of a California-based company’s acquisition of seven apartment complexes. Colliers International photo

Last week’s sale of Foothills Mall was $14 million less than the price paid in July 2006 when it was acquired by a New York-based real estate investment trust (REIT). 

At that time, FMP Kimco Foothills LLC, an affiliate of Kimco Realty Corp., and Feldman Mall Properties Inc. had paid $104 million for the retail center on the northwest corner of Ina Road and La Cholla Boulevard.

In the latest transaction, announced Aug. 25, J. Foothills LLC, an affiliate of J. Schottenstein Property Group LLC, Columbus, Ohio, paid $89.82 million for 27-year-old mall. In the four years since the Kimco purchase, the mall’s price per square foot fell from $202 to $174.45, a 13.6 percent decline. 

The 514,869 square-foot mall opened in 1983 as a high-end retail center. It’s initial anchor tenants were Levy’s and Goldwaters, both of which closed by mid-1994. In the late 1990s, the mall was repositioned to include some outlet stores and the market’s first Barnes & Noble store. It’s currently about 92 percent occupied, including anchors Saks Off 5th Avenue, Ross Dress For Less, AMC Theaters and Barnes & Noble.

Scott Jensen of Kimco Realty will continue to handle the mall’s leasing.

This is the first Arizona acquisition for Schottenstein, which owns or manages more than 22 million square feet of commercial, industrial and residential properties. The purchase included Schottenstein assuming an existing loan of about $80 million on the property.

7 apartment complexes sold 

Based on favorable prices and a sense that Tucson’s commercial real estate market is near the bottom, a San Francisco-based company has purchased a portfolio of seven apartment complexes out of receivership for $46.5 million. Foreclosure notices issued last year on the properties put their total value at $100 million.

Six of the properties bought by Hamilton Zanze & Company are in Tucson and the seventh is in Sierra Vista. The portfolio of Class B buildings totals 1,566 multi-family units at an average price of $29,693.   

It is Hamilton Zanze’s first acquisitions in these two markets. The company owns three properties in Phoenix. 

According to public records, the apartment complexes had been owned by Scottsdale-based Bascom Arizona Ventures, a division of Bascom Group LLC, Irvine, Calif. 

The two largest Tucson complexes are the 322-unit Cordova Village, 2020 S. Columbus Blvd., and 310-unit Lakeside Casitas,  8250 E. Golf Links Road. 

The other four Tucson properties are San Mateo, a 254-unit complex at 2800 S. Mission Road; Palomino Crossing, a 240-unit complex at 750 E. Irvington Road; Hampton Park, a 160-unit complex at 8600 E. Old Spanish Trail; and Solano Springs, a 152-unit complex at 6340 S. Santa Clara Ave.

The Sierra Vista property is Highland Woods, a 128-unit complex at at 555 N. Seventh St.

The portfolio of apartments was placed into receivership in October 2009. Cindy Cooke and Brad Cooke of Colliers International-Phoenix handled the transaction directly with Hamilton Zanze & Company.

There was a high level of buyer interest in the portfolio because “it included a sales price far below replacement cost, an overall average occupancy rate of 86 percent, and seller financing,” said Brad Cooke. “There is a sense that the Tucson market has reached bottom and is gradually improving.”

When the foreclosure notices were issued last fall, public records listed Bascom as owing $61.76 million on the six Tucson properties. The highest totals were $22.5 million on Lakeside Casitas; $10 million on San Mateo; and $8.2 million on Palomino Crossing. General Electric Capital Corp., Norwalk, Conn., held the notes on all six complexes.

Faster short sales

In an effort to streamline the short-sale process in the housing market, a federal-local partnership has been created. The Multiple Listing Service of the Tucson Association of Realtors has contracted with Fannie Mae to work more closely together to set more accurate property values.  

Dan Santa Maria, president of the Multiple Listing Service, said the two groups have been working for over a year “to develop a mutual effort to streamline the local short sale process for the benefit of our members’ clients.”

Under the agreement, the listing service will give Fannie Mae access to its housing data. The goal is to not only streamline the short-sale process but to prevent property values from being priced unjustifiable low. 

Santa Maria said the partnership should reduce the time from contract to closing. 

Marcel Bryar, vice president at Fannie Mae, said the program will result in “faster sales at fair market valuations and contribute to neighborhood stabilization.” 

Santa Maria added that the time needed to obtain lender approval for a short sale is “excruciatingly long.  Our partnership with Fannie Mae has helped make it easier to complete the sale.”

Longer sales lag 

As economic conditions continued to deteriorate in July, it should come as no surprise that homes are staying on the market longer in Southern Arizona. According to Coldwell Banker, homes were on the market for an average of 84 days in July, up from 75 days in June. 

Malcolm MacEwen, president of Coldwell Banker, explained that an upward trend in days-on-market indicates “a move towards more of a buyer’s market.”  Compared to July 2009, the period was 83 days. 

Regarding selling prices per square foot, which MacEwen described as a “normalized indicator” of the direction of property values, July’s figure was $99.  In June, the level was $100; and $111 in July 2009.

Sales and leases

• Friedman and Friedman Management Company LLC, Newport, Calif., purchased The Colony, a 240-unit apartment complex at 351 N. Peart Road, Casa Grande, for $11.6 million. The seller was Casa Grande Apartments LLC, Las Vegas, which was represented by Art Wadlund in Hendricks & Partners Tucson office and Chuck LaBenz in the company’s Phoenix office.

• Nancy Dudney, whose business is named Allen’s Organics, leased 10,179 square feet at 741 S. Campbell Ave. from Lynn Sadowsky, Sonoita, represented by Chuck Corriere, Long Realty Company. Tim Healy, CB Richard Ellis, represented the tenant.

• Intermediary Enterprises Inc., which does business as Twice as Nice, leased 9,000 square feet at Northgate Plaza, at the northeast corner of Grant Road and Alvernon Way, from TNP SRT Northgate Plaza Tucson LLC. Debbie Heslop, Volk Company Commercial Real Estate, represented the landlord. Volk’s Rick Borane represented the tenant.

• Pet Club Gilbert LLC leased 5,500 square feet at Northgate Plaza from TNP SRT Northgate Plaza Tucson LLC. Debbie Heslop, Volk Company Commercial Real Estate, represented the landlord. Greg Saltz, DeRito Partners, represented the tenant.

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