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7/08/16
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TruAmerica Multifamily has closed its largest investment to-date in Arizona, paying $80.9 mil for Scottsdale Springs, a 644-unit ($125.6k/unit) institutional quality multifamily community in Downtown Scottsdale. TruAmerica acquired the property, located at 7791 East Osborn St, from NY-based Abacus Capital Group in an off-market transaction.
Built in 1980, Scottsdale Springs features a mix of one-, two-, and three bedroom floor plans ranging in size from 680 sf to 1.4k sf in one of the few low-density garden style multifamily environments in Scottsdale. Community amenities include three resort-style pools, dog park, clubhouse, outdoor kitchens and barbecue areas.
TruAmerica will invest an additional $10 mil on a comprehensive renovation program that will transform the property to create a luxury living environment that will still be affordable for working class families and individuals. Facilitated by TruAmerica’s in-house construction management team, improvements will include interior upgrades to all residential units, the construction of a highly amenitized clubhouse with state-of-the-art fitness center, media and business center as well as a new rooftop lounge overlooking a redesigned resort-style pool.
“When completed, residents will benefit from an amenity package unparalleled in the submarket at this price point and, more importantly, post-renovation rents will be well below that of the newest Class A product in Downtown Scottsdale,” added TruAmerica Chief Operations Officer Lynn Owen.
Scottsdale Springs is the third acquisition in Arizona in the past nine months for TruAmerica, whose portfolio in the Grand Canyon State now totals 1,567 multifamily units in Phoenix and Chandler. The Los Angeles-based real estate firm has invested approximately $225 mil in Arizona since it entered the market in 2014. Last month, the firm acquired Villa Blanco, a 379-unit community in Tempe for $56.7 mil.
“Unlike many of the other major Western markets, Phoenix is still in the prime of its post-recession economic growth,” said TruAmerica Senior Managing Director of Acquisitions and Dispositions Greg Campbell. “Phoenix is forecasted to lead the nation in job growth over the coming years and is further aided by the growing demand by Millennials to target ‘Sun Belt’ markets. Downtown Scottsdale is Phoenix’ strongest submarket and is emerging as one of the most dynamic technology employment markets in the Western United States. Consequently, we continue to seek out sound investment opportunities here.”
Tyler Anderson and Sean Cunningham with CBRE’s Phoenix office negotiated the transaction on behalf of the seller.
“Scottsdale Springs features some of the lowest rents in Downtown Scottsdale and presents a truly unique opportunity to dramatically increase net operating income through interior and common area improvements,” said Cunningham. “Additionally, Downtown Scottsdale is substantially built out with minimal sites available for future multifamily development.”
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