Olen Properties Corp. is making a $78 million investment in Arizona’s multifamily market.
The Newport Beach-based developer, whose portfolio comprises about 10,000 rental properties across the country, this month closed on the purchase of Stone Canyon Apartments, a 392-unit apartment complex in Mesa, Ariz.
The complex, about a half-hour’s drive from downtown Phoenix, sold for $47 million, or about $120,000 per unit.
It was an all-cash deal, according to Igor Olenicoff, Olen’s founder and president.
The complex was sold by a group of tenants-in-common co-owners who paid a reported $37.6 million for the property in 2005. It was 95% leased at the time of its sale to Olen.
The deal is the second multifamily property Olen owns in Arizona, based on a look at the company’s website.
It also owns a complex in the city of Gilbert, a few miles from Mesa.
A third deal in the area is expected soon.
Olenicoff said his company is in escrow to buy the 232-unit Palms at Augusta Ranch rental complex in Mesa. The property is currently owned by an affiliate of San Diego-based Fairfield Residential.
An all-cash deal for the Palms property is on track to close in June, Olenicoff said. The sale price is $31 million, or a little more than $133,000 per unit.
The property was built as a condominium project, but Fairfield operates it as an apartment, according to Olenicoff, Orange County’s second wealthiest resident, with an estimated net worth of more than $3 billion.
The bulk of Olen’s rental properties are in Southern California, Nevada and South Florida. Last year the company made its first investment in Georgia for a pair of apartment properties near Atlanta.
“We aim to acquire more projects this year in our areas of concentration,” Olenicoff told the Business Journal.
The apartment market in the area around Olen’s acquisitions in Mesa is ripe for an increase in valuations, according to brokers with the Phoenix office of CBRE Group Inc. who worked on the Stone Canyon sale.
It’s a “submarket that has no new multifamily construction under way, with none planned,” said CBRE Vice Chairman Tyler Anderson. “The buyer is in an excellent position to capitalize on a submarket that is expected to post the strongest population growth metrowide over the next five years.”
Hotel Trade
A real estate affiliate of Goldman Sachs appears to be the new owner of the Embassy Suites Anaheim-Orange.
The 230-room hotel just off the Santa Ana (I-5) Freeway at 400 State College Blvd. sold this month for $48.4 million, or about $210,000 per room.
It’s the third-priciest hotel sale in Orange County reported so far this year, trailing the $360 million sale of the Montage Laguna Beach to Chicago-based Strategic Hotels and Resorts Inc. and the $58.4 million sale of the Shorebreak Hotel in Huntington Beach to DiamondRock Hospitality Co. in Bethesda, Md.
A buyer of the property, which sits a few blocks from Angel Stadium, wasn’t disclosed at the time the sale was announced.
Property records, however, point to an affiliate of Irving, Texas-based Archon Group, a real estate investment services and asset management firm affiliated with Goldman Sachs, as the new owner.
The hotel previously operated as a Hilton Suites but last year underwent a multimillion-dollar renovation and became the all-suite Embassy Suites Anaheim-Orange.
The seller of the 10-story hotel was an affiliate of Lehman Brothers Holdings Inc., which bought the property in 2007 as part of a $1.5 billion portfolio acquisition.
Scott Hall and Holden Lim with HFF represented the seller.
The hotel “is a high-quality asset, which has benefited from the seller’s timely conversion to a best-in-class flag, an exceptional physical product post-renovation, and continued local and regional market growth,” Hall said in a news release at the time of the sale. “The underlying fundamentals for Southern California’s lodging market point to significant continued [revenue per available room] gains moving forward. The specific submarket dynamics of Anaheim and Orange were key contributing factors to further maximizing pricing for this transaction.”
