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10/19/15
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TruAmerica Multifamily, in partnership with an institutional investor, recently wrapped up an Arizona apartment buy, paying $47.5 mil for Trevi, a 290-unit ($164k/unit) community in Chandler. The asset was sold by Phoenix-based Alliance Residential Company. The acquisition represents TruAmerica’s second purchase in the greater Phoenix area.
“There are quite a few areas, particularly in the western United States, that are starting to match the tech growth we’ve seen in places like the San Francisco Bay Area,” said Greg Campbell, TruAmerica Senior Managing Director of Acquisitions. “They are attracting a young work force looking for more affordable housing and a better quality of life. Chandler is one of those areas fitting this description and has earned it the moniker ‘Silicon Desert.’”
Chandler, located 22 miles southeast of downtown Phoenix, was recently named one of America’s 50 best cities to live in by Businessweek.com. The city of 248,000 residents is home to Fortune 500 employers such as the Intel Corporation, which employs close to 12,000 people locally, and Freescale Semiconductor with more than 5,000 workers. This growing employer base is boosting office construction in the submarket near the Broadstone complex, with 11 projects and more than 3 msf currently planned or under construction.
Trevi, which was built in 2005, is 97 percent occupied. The richly designed, Class A property characterized by its Tuscan-themed architecture, features a broad array of resort-style amenities including two resort-style pools and spas, clubhouse and resident lounge, bocce ball courts, outdoor kitchen and fireplace, grape vineyard, as well as a fully equipped 24-hour fitness center.
About 20 percent of the units have already been renovated with new stone countertops, updated cabinet hardware and fixtures, new appliance packages and USB charging ports. TruAmerica will undertake a $3 mil capital improvement program to complete the interior renovation of the remaining units.
Chandler’s relatively young demographic and expensive home sales market is making it an opportune rental play for TruAmerica. The median sales price for homes in Chandler climbed to $255,000 between June 15 and September 15, a 3.6 percent increase over the same period last year, according to residential real estate site Trulia Inc. Chandler’s median sales price is 11.5 percent above the national level in August of $228,700, according to the National Association of Realtors.
The acquisition was leveraged with $34.2 mil in agency debt financing secured through Berkeley Point Capital and originated by Senior Managing Director Mitch Clarfield.
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