FONTANA AND RIVERSIDE, CALIF. — Phoenix Realty Group has acquired a three-property apartment portfolio in California's Inland Empire for $31.5 million. In the first part of the deal, Phoenix purchased Cielo Vista, a 120-unit property located in Fontana, for $11.7 million. The community contains six buildings in a garden-style configuration. The purchase price amounted to a 35 percent discount on a distressed construction loan for the property, which was built two years ago.

In the second part of the deal, Phoenix purchased Arlington and Evergreen, two communities located in Riverside, for $19.8 million. The properties contain a total of 304 units in 24 buildings. The purchase price represents a capitalization rate in the high 7 percent range.

Alex Mogharebi of Marcus & Millichap's Ontario, Calif., office represented the sellers in the deal. All three properties will be financed through Freddie Mac. Phoenix completed the acquisition on behalf of its Genesis Workforce Housing Fund II, a $300 million institutional fund that focuses on multifamily investments in the greater Los Angeles area.

"We see demand for Inland Empire retail resurfacing in 2011," said Alex Saunders, senior vice president of Phoenix, in a statement. "As unemployment levels off, there will be less need for people to double up with friends and family. With virtually no new apartment construction in these areas, future demand will be absorbed by properties such as these."

— Coleman Wood