CHANDLER, AZ—Trevi, a 290-unit multi-family community, has been purchased by TruAmerica Multifamily in partnership with an institutional investor, in an off-market transaction valued at $47.5 million. The acquisition represents TruAmerica's second in the greater Phoenix area. The seller was Phoenix-based Alliance Residential Company.
The acquisition was leveraged with $34.2 million in agency debt financing secured through Berkeley Point Capital and originated by senior managing director Mitch Clarfield. IPA senior director Steve Gebing and Cliff David, a senior director of Marcus & Millichap's national multi-housing group advised the seller and procured the buyer.
Trevi, which was built in 2005, is 97% occupied. The class-A property, characterized by its Tuscan-themed architecture, features a broad array of resort-type amenities including two pools and spas, clubhouse and resident lounge, bocce ball courts, outdoor kitchen and fireplace, grape vineyard, as well as a 24-hour fitness center. About 20% 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 million capital improvement program to complete the interior renovation of the remaining units.
Greg Campbell, TruAmerica senior managing director of acquisitions, tells GlobeSt.com: “The property was developed to a higher standard than most projects when originally delivered, with the developer spending extra on certain details, such as Tuscan-style vineyards, arched walkways and hand-painted accents in the common areas.”
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 million square feet currently planned or under construction.
“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 Campbell. “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'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% increase during the same period last year, according to residential real estate site, Trulia Inc. Chandler's median sales price is 11.5% above the national level in August of $228,700, according to the National Association of Realtors.
“Chandler has a very compelling rental demographic,” said Campbell. “Home prices are more than 10% above the US median, which is preventing many younger families and individuals from purchasing a home. This has created a heightened demand for quality multifamily rental housing as renting becomes a much more affordable alternative for this demographic, especially with the added incentive of high-end amenities.”
TruAmerica specializes in identifying, acquiring and repositioning apartment communities to provide higher quality housing in growth markets throughout the Western United States addressing a growing shortage of Class B or better affordable rental units for working class families and young professionals. Since its beginning in 2013, TruAmerica has acquired a portfolio of 13,000 units valued at approximately $2.2 billion.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
