A local real estate company recently purchased its second Ann Arbor apartment building within the past year, adding to its portfolio as it plans to expand its third-party management.

The building is a 1960s-era, 15-unit building near Arbana Street, within walking distance of downtown and located in a neighborhood of both single-family homes and multi-family buildings.

Cabrio Properties paid $730,000, according to the city’s Web site, or $48,666 per two-bedroom unit.

“We look at this economic environment as an opportunity,” President Jason Costello said. “… Pricing has come back to a place where deals make sense again.”

Cabrio’s latest apartment buy follows a multifamily purchase in June 2009, when the group purchased the 17-unit building at 727 E. Kingsley, north of campus and east of Kerrytown. That building features two-bedroom units renting for $1,050 to $1,250, according to the Cabrio Web site. Seven are listed as available.

At 1117 W. Huron, the two-bedroom units are priced from $875 to $1,050, reflecting the proximity to downtown instead of campus.

The investments made sense, the pair said, because the purchase price and potential aligned to allow the new investors opportunity to grow their returns.

That’s a rare combination among near-campus rental in Ann Arbor, said Jim Porth, a broker at Thomas Duke Co,. in Farmington Hills.

“I’ve never seen them at a better value,” said Porth, who represented both buyer and seller on the West Huron deal.

Yet the overall apartment market in the region has stalled, with only a handful recorded in Washtenaw County in 2009.

“Lending is still very difficult,” Porth said. Also impacting the market are drops in appraisals for some properties, which in turn affect both pricing for a transaction and the amount of equity a lender would require on a refinance.

On the West Huron building just bought by Cabrio, the out-of-town owner was not in distress - but did want to strike a deal, Costello said, and set an appealing price.

“It’s not a huge deal, but it represented an opportunity in this environment and we snapped it up,” Costello said.

Cabrio, established in 2007, also has commercial buildings it its portfolio, and it syndicates deals among groups of investors. Most of the buildings are in Ann Arbor, but the company owns and has shopped the Grand Rapids are for investment potential.

Rob Spears is the third partner with Costello and Borsuk. He bring experience managing several hundred apartments in both Ann Arbor and Ypsilanti, so Cabrio felt prepared to build its apartment management division.

Key to the company’s strategy is finding buildings that haven’t been aggressively managed and need cosmetic upgrades - “as opposed to some major issues with the actual asset itself,” Costello said.

Rental rates close to campus, meanwhile, have mostly stagnated over recent years, Borsuk said, instead of increasing at annual 3-5 percent rates.

Beyond campus, there’s more supply. Cabrio is trying to increase demand for its units by investing in the West Huron building, with planned improvements to the common areas, some interior renovations and upgrades to the laundry and storage areas.

Cabrio will spend the next year looking for additional properties, Costello said. He wouldn’t discuss financing details, but said the deals involve funds from private investors.

The company also will expand its management profile in the region, he said.

In addition, its working with owners and banks to analyze distressed real estate assets.

“We expect to have a good year,” Costello said. “We expect to be busy.”