By Keat Foong, Executive Editor Cincinnati, Ohio—It was no surprise that a REO property brokered by Apartment Realty Advisors (ARA) sold so quickly: It was a classic value-add investment opportunity, according to the company. ARA’s Distressed Assets Solutions Group arranged for the the $1.1 million Real Estate Owned property sale to Tritex Real Estate Advisors Inc. Tritex represented the holder of the foreclosed property, the 45-unit Oakley Terrace apartments located in Cincinnati. Brian Pace, sales person at ARA’s Midwest office, said prospective buyers were attracted by the fact that the property was Real Estate Owned and that the upside potential to increase rents and occupancies was “certainly there given better management.”Pace said the property received 13 offers, and the sale was closed one month after marketing began. “We actually had strong level of interest in this asset.” Pace attributed the quick sale also to a motivated seller who moved quickly. Built in 1963, the property had an occupancy of about 60 percent at the time it was marketed. It had suffered from declining rent collections combined with an evolving tenant profile, said ARA. The buyer, a private Cincinnati-based local investment group, was able to acquire the asset at a high cap rate with substantive upside, said ARA. The submarket, according to ARA, is a well-established, blue-collar location in an east Ohio suburb. According to ARA’s Debbie Corson, who leads ARA’s National Distressed Assets Solutions Group (DASG), “Fundamentally, this is an excellent investment for the buyer who recognized that the property’s weaknesses can be efficiently and quickly mitigated through a sound re-tenanting program and aggressive rent collections process.” Since its launch in January, ARA says its Distressed Assets Solutions Group has brokered the sale of more than 17 REO properties nationally with a total investment value of $250 million. Pace said that ARA is currently marketing another REO property for Tritex. He said the bidders for Oakley Terrace were private buyers. There are still investors looking for multi-housing properties to purchase, but the number of such investors is down compared to one to two years ago. “We worked this pretty hard and were pleasantly rewarded with the number of bids we had in,” he said.
INSIDE THE DEAL: Distressed Property Sells After One Month on Market
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