Passco InSite, LLC, a joint venture between Passco Companies, LLC and InSite Investment Realty, has acquired the 270-unit Class B garden-style multifamily community Ovation at Tempe for $25.85 million. According to Bill Passo, CEO and Founder of Passco Companies, this new joint venture is an extension of a 20-year relationship with long-standing track record, market expertise and multifamily investment experience.
According to Passo, investors will have the opportunity to invest in the Ovation at Tempe property through crowdfunding, as well as through the broker-dealer community.
“This is a strong, value-add investment opportunity in a market that is in a proven recovery,” explained Passo. “The Tempe submarket posted positive absorption and a low 3.7 percent vacancy in the first quarter of 2014, and a 3.5 percent rental growth is forecasted by the end of the year.”
In addition, Tempe’s market fundamentals are rebounding rapidly according to Passo, who noted that the state of Arizona is on track to rank first in the nation in future job growth, projecting a three percent rise annually over the next five years.
“This projected job growth will drive deep demand for quality housing, which will bolster the profitability of this investment over our hold period,” he explained.
The Passco InSite partnership plans to hold the property for three years. Under this ownership, value-add improvements will be implemented, which will drive rent growth for the asset, according to Passo.
Planned renovations include upgrading unit interiors, constructing additional carports and enhancing the property’s exterior and community amenities.
The property, which was originally built to condo specifications, is unique in its residential setting, according to Passo.
“The community is situated against open space to the West and East, with no adjacent apartment communities,” he said. “In addition, this property has one of the lowest unit densities in Tempe at 16.5 units per acre. These factors, along with the community’s easy freeway access and close proximity to retail, recreation, employment and educational centers make it a highly desirable investment property.”
Ovation at Tempe is located at 4502-4505 S. Hardy Drive in the city of Tempe, Arizona. The community features one- and two-bedroom apartment units, as well as separate casitas and townhomes situated on approximately 16 acres.
Units range in size from 700 to 980 square feet and feature walk-in closets, private patios or balconies and stackable washers/dryers.
Community amenities include a state-of-the-art fitness center, two swimming pools, two spas, tennis court, children’s playscape, picnic area with barbeque grills, and covered parking.