PHOENIX—TruAmerica Multifamily and an affiliate of Berkshire Group acquired Avenue 25 Apartments in Phoenix in a joint venture for $35.4 million. TruAmerica Multifamily is the investment firm formed by Robert E. Hart and The Guardian Life Insurance Company of America. The off market transaction was completed with pre-stabilization debt financing provided by Capital One Commercial Bank.
Avenue 25 is TruAmerica's first Arizona purchase and the investment firm's twelfth acquisition in its inaugural year, which includes new acquisitions valued at over $612 million across Arizona, California, Colorado and Washington.
Avenue 25 is Berkshire's second Arizona acquisition and marks the evolution of its presence in the Phoenix market.
Phoenix is experiencing shifts in its economic conditions that present an attractive investment environment. The apartment vacancy rate in the submarket is currently 4.4%, and among assets under five years old, including properties like Avenue 25 Apartments which was built in 2014, drops to 2.6%. Strong, diverse employment growth is also trending up at a quick pace. Unlike previous economic cycles, almost all sectors are contributing to more balanced job gains rather than a concentration in the construction industry.
Greg Campbell, director of acquisitions at TruAmerica, tells GlobeSt.com, “We believe in the recovery. It's a more broad-based; not so construction-based as it was in the past and that makes us a lot more comfortable. We're bullish on Phoenix and we will definitely be looking there for future assets.”
Avenue 25 Apartments benefits from high visibility along primary traffic corridor Interstate 17 highway and is convenient to the U.S. 101/Interstate 17 interchange, which is a major regional transportation hub. The submarket houses several large corporate headquarters in a range of industries from American Express to PetSmart and Safeway. TruAmerica plans to capitalize on this concentration of large employment centers by marketing to the workforce throughout the region.
“We like that it's located in a big job corridor; there are more than 50,000 jobs within a one-mile radius. And there is not a lot of new construction, so not a lot of competition for new product,” says Campbell.
The 254-unit apartment community consists of a mix of newly built one- to three-bedroom floor plans, which include top-of-the-line amenities. Avenue 25 Apartments is comprised of 19 buildings on nearly nine acres of professionally landscaped grounds. Amenity offerings include an electric car charging station, recreation center fitness center, pool area, dog park, and business center. In addition, individual units include designer kitchens, faux plank flooring, private outdoor spaces and full-size in-unit washers and dryers.
Alon Shnitzer and Rue Bax of Abi Multifamily represented the seller, NextGen Apartments, on the Avenue 25 Apartments transaction.
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