Melcor Makes Second Fractured Condo Buy in AZ

Melcor Developments Ltd. has made its second fractured condo buy in Arizona, paying $8.4 million for 82 units that are part of the 447-unit Edge at Grayhawk. The buyer, a publicly-traded Canadian property company based in Edmonton, Alberta, acquired the units out of foreclosure from MidFirst Bank, an Oklahoma City-based financial institution. “There is substantial investor interest in buying fractured condo deals in bulk, not necessarily on an individual unit level,” says Nick Ingle, an investment sales broker with Hendricks & Partners’ Phoenix office. He negotiated the deal, along with Mark Forrester, Ric Holway and Greg Thielen. “Since MidFirst Bank took the condo units in early 2010, they have continued to sell them on a one-off basis, but after they received a number of off-market offers to acquire the remaining units in bulk, they decided to shift their strategy,” Ingle explains. Ingle says the recent successes of other bulk sales of fractured condo deals have encouraged owners, particularly lenders, to adopt that strategy. Just a couple of months ago, for example, he and his Hendricks & Partners team sold the remaining condo units in Ten Wine Lofts, another fractured condo deal in Scottsdale. Ten Wine Lofts garnered 36 offers, selling for $238,000 per unit. Ingle tells GlobeSt.com that Melcor beat out 18 other investors to nab the remaining units at The Edge at Grayhawk. Built in 2001 by Trillium Residential, the gated community was converted to luxury condos in 2006 by Avenue Communities. “Avenue Communities sold about two-thirds of the units before the market turned against them,” Ingle says, adding that the units sold for in excess of $400,000. “Greyhawk is a very exclusive master-planned community, and homes there sell for $1 million or more. These condos offered entry-level homeownership in a very upscale part of North Scottsdale.”

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