Institutional Property Advisors Arranges $53.4M Sale and $47M Financing for Tucson Multifamily Property

## Tucson Multifamily Asset Trades on Value-Add Potential and Favorable Debt Markets

TUCSON, Ariz. – Institutional Property Advisors (IPA), a specialized division of Marcus & Millichap (NYSE: MMI) catering to institutional clients, has announced the successful sale and financing of The Retreat at Speedway, a 304-unit apartment complex located in Tucson, Arizona. The transaction highlights the enduring appeal of well-positioned multifamily assets with clear value-enhancement strategies, further bolstered by competitive debt markets.

The Retreat at Speedway, built in 2001, presented a compelling opportunity for investors seeking to capitalize on a significant rent differential compared to its local peers, with an estimated 27% gap. “The property offers a blank canvas for value-add initiatives, supported by a substantial $1.4 million in recent capital improvements,” stated Steve Gebing, Executive Managing Director at IPA. The scarcity of similar vintage properties in the Tucson Metropolitan Statistical Area (MSA) further enhances its strategic value. “Assets constructed between 2000 and 2009 represent a mere 5% of the Tucson MSA’s multifamily inventory, making The Retreat at Speedway a rare find,” added Hamid Panahi, Senior Managing Director Investments at IPA.

Gebing, Panahi, alongside IPA’s Clint Wadlund and Cliff David, facilitated the transaction, representing the seller, Weidner Apartment Homes, and securing the buyer, Bascom Arizona Ventures, an affiliate of The Bascom Group. The property achieved a per-unit price of $175,657.

In parallel, IPA Capital Markets arranged $47.53 million in acquisition financing for the buyer. Brian Eisendrath and Cameron Chalfant of IPA Capital Markets were instrumental in securing highly favorable terms. “The current debt fund market remains exceptionally competitive, allowing us to secure attractive terms for our client,” commented Chalfant. “This competitive environment, coupled with seamless collaboration among all parties involved, led to a swift and efficient closing.”

The strategic location of The Retreat at Speedway on Speedway Boulevard places it in proximity to desirable neighborhoods such as Catalina Foothills and Tanque Verde. Residents benefit from convenient access to retail and recreational amenities at Park Place Mall and Tucson Country Club. The property also benefits from its proximity to major employment centers in Tucson, including the University of Arizona, Raytheon, Banner Health, Texas Instruments, Carondelet, Amazon, and Caterpillar, underscoring its long-term rental demand potential.

The community features a two-story, garden-style design with a central courtyard, swimming pool, spa, and business center. Significant upgrades have been implemented, including asphalt resurfacing, roof overlay, enhanced gated entry systems, and refreshed landscaping. The individual apartment units, averaging 859 square feet, feature open-concept layouts, eat-in kitchens, and in-unit laundry facilities.

**Understanding the Deal’s Financial Architecture:**

This transaction involved several key financial instruments common in commercial real estate:

* **Mezzanine Financing:** A hybrid form of capital positioned between senior debt and equity. It carries higher interest rates and potentially equity rights, offering lenders enhanced returns while increasing the borrower’s leverage.
* **Preferred Equity:** An investment class that ranks higher than common equity for dividend payments and asset recovery in case of liquidation. It provides a steady income stream with some participation in upside, offering a balance of risk and reward.
* **Joint Venture Equity:** This involves partners pooling resources and equity to co-own and manage a property. Each partner’s share dictates their claim on profits, losses, control, and liability, making it crucial for managing risk and strategic alignment in shared ventures.

The successful execution of both the sale and the financing for The Retreat at Speedway underscores the continued robustness of the multifamily sector, particularly for well-managed assets in growing markets. The interplay between strategic acquisitions, value-add potential, and opportunistic capital markets access remains a winning formula for institutional investors.