Tag Archives: multifamily

Chandler Viridian, CBRE

CBRE to market office space at Chandler Viridian

CBRE has been awarded the marketing assignment for the ±240,000 SF office portion of Chandler Viridian, the $150 million, mixed-used project to be developed by Hines. The multi-faceted development project will be located on the former Elevation Chandler site near Chandler Fashion Center. Construction on the project is slated to begin 1Q 2015 and will include multifamily and hospitality components in addition to the premier, class A office product.

The Offices at Chandler Viridian will benefit from an excellent infill location in the heart of Chandler’s major employment and tech-hub. In addition to the strong corporate employment located to the southwest in the Price Road Corridor, the property will also boast proximity to numerous restaurant, retail and entertainment options within blocks of the project in addition to amenities that will be on-site upon Viridian’s completion.

Hines is a world-class developer with a keen understanding of what modern office users want and CBRE is incredibly excited to be a part of this project,” said CBRE’s Jerry Roberts, who along with Corey Hawley and Pat Boyle will head up the marketing and leasing team for The Offices at Chandler Viridian. “With its corporate friendly environment and diverse, well-educated workforce, Chandler Viridian will be located in the core of one of the Valley’s major employment hubs. Chandler is already well-known for drawing industry leaders from all knowledge-worker sectors including high technology, aerospace,bioscience and financial services. The addition of a premier, live-work-play environment offered by Hines’ Viridian will only serve to further enhance the area’s appeal for major employers.”

The state-of-the-art project is expected to draw the interest of major companies looking to locate or expand in metropolitan Phoenix, and will be a welcome addition to a submarket currently suffering from a dearth of available office product, particularly large blocks of quality contiguous, space. At the end of Q2 2014, the Chandler submarket led the Valley office market with a vacancy rate of 10.1 percent, compared to a 22 percent vacancy Valley-wide. Additionally, class A space in Chandler recorded a vacancy rate of only 3.9 percent at mid-year, compared to 16.9 for the entire metro area.

We expect The Offices at Chandler Viridian will be met with high demand from users. The City of Chandler is as business-friendly as any in the Valley and the community’s strong leadership has created an environment that companies want to locate in,” said Roberts. “Unfortunately, those users are currently faced with a lack of available product to suit their needs. Viridian will help to satisfy some of that demand.”

At build out, the 25.6-acre Chandler Viridian will feature 335 apartments units in a four-story building, ±240,000 square feet of office space in a six-story building, a 10-story, 150,000-square-foot hotel with 180 rooms and two pads for retail/restaurants. The pedestrian friendly project will feature gardens, promenades, courtyards and plazas that would be interconnected with 1.5 miles of paths and trails. The commercial components of office, hotel and retail will be developed on the northern portion of the tract and the multi-family residential units would be situated in the southern part of the site along the west side of the 101 Loop/Price Road Freeway and just north of the 202 Loop/San Tan Freeway.

 

C:UsersRogerDesktopProjectsHines - Chandler CommonsCADCD

Hines closes on purchase of 25-acre Chandler Viridian

Hines, the international real estate firm, announced today that it has closed on the purchase of the 25.5-acre site for Chandler Viridian, a mixed-use property on the northwest corner of the Loop 101/Loop 202 interchange, adjacent to the Chandler Fashion Center. Hines has been working on Chandler Viridian for nearly two years due to the significant legal complications related to the unfinished Elevation Chandler project. With the legal process regarding the site now complete, Hines expects to demolish and remove the structure in December 2014.

“Chandler Viridian will expand the area’s economic engine by creating a true live, work and play environment. The visibility and walkability of Chandler Viridian exceeds many other mixed-used projects in the area,” said Chris Anderson, Managing Director and local City Leader for Hines. “Hines is excited to develop the last available site adjacent to the Chandler Fashion Center and complete the master plan envisioned by the Chandler City leadership and citizens over 15 years ago.  The support received from the Chandler City Council, city staff and Alliance Bank of Arizona has been instrumental to our success.”

“This is a high-profile site in the midst of the Price Corridor, and the entire community will benefit from having a new project there,” said James Smith, the City of Chandler’s Acting Economic Development Director. “This is the moment our residents have been waiting for – to see that failed structure come down, and new development take its place.”

Alliance Residential is developing the Class A multifamily property at Chandler Viridian. Multifamily construction is expected to begin in the first quarter of 2015. Alliance Residential is headquartered in Phoenix with 33 regional offices nationwide.

“Alliance Residential has served as a partner throughout the entitlement and land-closing process, collaborated on the design and plays an important role in delivering on the promise of Chandler Viridian,” says Anderson.

“We are excited to develop the residential component within the well-designed, mixed-use project led by Hines,” said Ian Swiergol, Managing Director of Development, Southwest for Alliance Residential. “This urban community will meet the ever-growing demands of today’s renter profile and will complement the great mix of employment and entertainment options within the Chandler Fashion Center submarket.”

In addition to the luxury apartments, Chandler Viridian will include a six-story modern brand hotel, a central plaza with 250,000 square feet of Class A office, and retail options along with a pedestrian promenade to the Chandler Fashion Center. Chandler Viridian is located in the heart of the Chandler retail entertainment district.

Construction on the horizontal infrastructure for the commercial properties is expected to begin in the second quarter of 2015. The hotel, office and retail projects will begin construction later in 2015 and into 2016.

RSP Architects of Minneapolis serves as the architect of record for Chandler Viridian. A general contractor has not been selected.

Fiesta Park

The value-add play in Phoenix’s multifamily market

By:  Steve Jaffe, Executive Vice President and General Counsel, BH Properties

 

Steve Jaffe is the executive vice president and general counsel for BH Properties, a Los Angeles-based commercial real estate investment company that acquires and maximizes the value of under-performing properties located throughout the country. The firm also has regional offices in Dallas, Texas and Salt Lake City, Utah.

Steve Jaffe is the executive vice president and general counsel for BH Properties, a Los Angeles-based commercial real estate investment company that acquires and maximizes the value of under-performing properties located throughout the country. The firm also has regional offices in Dallas, Texas and Salt Lake City, Utah.

During the most recent Great Recession, Phoenix saw property values drastically decrease and apartment owners lose tenants due to lost jobs. The domino effect resulted in owners dropping rents to maintain occupancy, which, in turn, caused them to lose out on money they would have spent to reinvest in and improve their properties, leading to further tenant loses. For many of the multifamily properties in the B- to C classes, this downward cycle was fatal.

In 2010, BH Properties stepped back into the apartment business with Arizona as its target market. The Los Angeles-based company brought its proven strategy of purchasing undermanaged or distressed assets at the appropriate price and turning the properties around in one of the markets that had been hit the hardest by the recession.

Fiesta Park in Mesa, Arizona was one such multifamily property suffering from long-term neglect and in need of BH Properties’ value-add approach. Recognizing its upside potential and believing the Phoenix market was (or would soon be) on the upswing, BH Properties purchased the complex in a short sale, making it the first purchase made by BH Properties after the market crashed almost three years earlier.

After purchasing the complex, BH Properties identified areas that needed to be restored and repaired in order for the asset to function properly and to draw new tenants. The 320-unit complex was 54 percent occupied at the time BH Properties went under contract to purchase the property and required extensive renovations to both the exteriors and interiors. Expenses were then prioritized in order to keep rents within reason to fit within the constraints of the C class property.  

To add value without losing sight of investment goals, the firm focused the majority of the renovations on improving common areas and individual units. The exterior of each building within the complex was painted with a fresh color scheme, the fence around the swimming pool was repaired and new furnishings were added, and outdoor lighting was installed throughout the complex illuminating areas that may not have seemed safe before. An archway was also built in front of the leasing office to increase its visibility and provide a welcoming entrance to the complex. The leasing office interior was updated and made more inviting. Individual apartment units were refurbished with better flooring, upgraded light fixtures and resurfaced countertops. For safety, walkways and staircases were improved.

With more than $1 million in renovations completed over an eight-month-time-period, BH Properties turned the neglected complex into a clean, safe, family-oriented living space. Shortly after the final touches were made to enhance the curb appeal, the complex saw occupancy grow to 90 percent from 54 percent at the time of purchase. Gradually, BH Properties was able to increase rents and improve the overall tenant profile.

The keys to success with value-add plays are patience and a true understanding of the market and not “over improving” an asset. Phoenix, like other major cities in the Sunbelt, held all the fundamentals for a great economy and continues to strengthen along with the recovery. In addition to the area’s unemployment rate coming in at almost one percent lower than the national average, recent reports  indicate a slight uptick in the median asking price per unit in the Phoenix market with an increase of 10.7 percent compared to last year’s prices.

BH Properties recognized the potential this business and family friendly environment had for a strong recovery across all sectors, especially the housing market, and employed its quick closing business model to take advantage of the primed opportunity. Purchasing Fiesta Park at the right price allowed the firm time and capital to make the necessary repairs in order to bring the complex back up to par, while the market gradually made a comeback.

 

 

Metro Value Add Portfolio, Colliers, WEB

Colliers’ Cooke Team brokers largest multifamily portfolio in Phoenix

The Cooke Multifamily Investments Team at Colliers International in Greater Phoenix completed the sale of a 2,759 unit-multifamily portfolio for $168.5 million. To date, the largest multifamily portfolio closed in Metro Phoenix and it could hold the record for 2014.

The size of this Class A and Class B Value-Add Metro Phoenix Portfolio attracted attention from investors around the world, but it was a local investor that was awarded the deal.  P.B. Bell of Scottsdale partnered with Stonecutter of New York City to purchase the portfolio from Standard Phoenix Fund of Arcadia, Calif.

Cindy Cooke, senior executive vice president of Colliers International, and Brad Cooke, vice president of Colliers International, served as the brokers for the seller. The buyer was self-represented.

“It was P.B. Bell’s in-depth knowledge of the assets and submarkets that helped separate them from the other buyers.  We were impressed with their upfront due diligence and ability to transfer their local knowledge to their New York equity partner.  They executed the transaction smoothly and even removed contingencies a day early,” Cindy Cooke said.

The Cooke Team provided attentive support to buyer and seller to ensure that they felt well informed and cared for.  Delivery of world-class expertise combined with strategic navigation of skills allowed a team approach between all parties for a seamless transaction.

“Having a local company that has been imbedded in the Valley of the Sun since 1976 step up to make their largest acquisition ever shows the strength of the current Phoenix apartment market.  This portfolio of seven properties represented exactly that.  The properties’ strong locations with stable occupancy of 96% set it up for a perfect position for upgrading the interiors and improving the exterior. P.B. Bell intends to use the transaction as a springboard to acquire more product.”  Brad Cooke said.

The Cooke team was hired by Standard Phoenix Fund due to their strong track record of closing portfolios at or above their target prices.  This is the second time the Cooke team has sold these seven assets; the first time as part of a 12-property portfolio in 2007 for $427.5 million, which is still the largest multifamily deal ever in Phoenix.

Five of the properties are located in the highly sought-after Southeast Valley submarket, one is located in the prestigious Camelback Corridor and one is located across from Arizona State University’s West Campus.  The properties:

Alante at the Islands

2222 N. McQueen Road, Chandler

Class A, 320 Units, Built in 1996

Crosswinds

868 S. Arizona Ave., Chandler

Class B, 374 Units, Built in 1985

Laguna Village

102 W. Palomino Drive, Chandler

Class B, 460 Units, Built in 1985

Tuscany Palms

901 S. Country Club Drive, Mesa

Class B, 582 Units, Built in 1986

Whispering Meadows

1050 S. Longmore St., Mesa

Class B, 432 Units, Built in 1979

Sienna Springs

5128 N. 15th St., Phoenix

Class B, 395 Units, Built in 1973

Tela Verde

5020 W. Thunderbird Road, Glendale

Class B, 196 Units, Built in 1984

The Enclave at 32nd

Watt Communities announces multifamily, in-fill projects

Watt Communities of Arizona has doubled its Phoenix project pipeline and brought its total local construction commitment to more than $21 million with the announcement of two new urban infill communities: The Enclave at 32nd Street and 16 Ocotillo. The move grows the company’s local presence and expands its product offerings to include single-family detached homes and urban townhomes in close-in suburban neighborhoods.

“We now have four flags on the map representing two concepts that we are extremely proud of and excited to bring to Phoenix,” said Steve Pritulsky, President and CEO of Watt Communities of Arizona. “They are all decidedly infill locations and will feature innovative indoor-outdoor living styles that today’s buyers are looking for.”

The Enclave at 32nd Street is located on 3.46 acres just south of the southwest corner of 32nd Street and Cactus Road, in the Paradise Valley Mall area of North Phoenix. The community is directly off of the 51/Piestewa Freeway and immediately north of the highly acclaimed Basis Charter School. It is also situated less than one mile from the Phoenix Mountain Preserve recreation area.

Scheduled to break ground in late 2014, The Enclave includes 31 two-story, single-family detached homes ranging from approximately 1,700 to 2,200 square feet. All homes deliver a welcoming front porch concept, creative side patios, builder-installed front yards and common area landscaping, walkable interior courtyards, and private rear-entry, two-car garages.

“This development is based on a private drive design developed by our partners in California, and is a unique concept here in Arizona,” said Paul Timm, COO of Watt Communities of Arizona. “Having just one point of entry for the community adds a level of privacy and allows residents to own a small oasis within a bustling urban corridor. It is innovative housing in and active location, but also peaceful.”

Dorsey/Biltmore

Dorsey/Biltmore

The second community, 16 Ocotillo, sits on 2.8 acres at the southwest corner of 16th Street and Ocotillo Road, between Maryland and Glendale avenues in North Central Phoenix. It is within walking distance to the area’s burgeoning 16th Street “Restaurant Row,” a Sprouts grocery store and diverse retail services. The community is being designed as a gated, single-family detached home community and is located near Piestewa Peak, which sits just one half mile away.

The Enclave at 32nd Street land acquisition closed escrow on May 13 for $1.275 million. Timm of Trust Realty Advisors represented the buyer, Watt New Leaf-Cactus LLC. John Werstler of CBRE represented the property seller, The Northern Trust Company as Trustee of the Edmund P Mell GST Trust. The 16 Ocotillo land acquisition closed escrow on May 8 for $1.6 million. The buyer was Watt New Leaf-16 Ocotillo LLC. Ray Cashen of Cashen Realty Advisors represented the property seller, The Estate of Mon Jame Lee and The Lee Living Trust.

In late 2013, Scottsdale-based New Leaf Communities and Watt Communities of Santa Monica, Calif. announced their joint venture (Watt Communities of Arizona) and entered the Phoenix market with two inaugural projects: Dorsey Lane, a 51-unit townhome project located in central Tempe (just south of the southwest corner of Broadway Road and Dorsey Lane), and Biltmore Living, a 40-unit townhome project located in the Camelback Corridor (less than a mile south of 24th Street and Camelback Road).

Those communities will provide contemporary, three-story urban townhomes ranging in size from 1,400 to 1,800 square feet. Amenities include gated entry, private two-car garages and common areas with a pool/ramada/sundeck, outdoor poolside kitchen and landscaped paseos.

“These are urban locations within established employment cores,” said Pritulsky. “They match the quality and vibrancy of their neighborhoods, and will allow residents to move from renting to owning without giving up their urban lifestyle.”

Carol Arms, WEB

ORION sells 44-unit Carole Arms apartments

ORION Investment Real Estate announced the sale of Carole Arms Apartments, a 44-unit apartment complex located at 2535 W. Coolidge St. in Phoenix. The property sold for $1,159,500 ($26,352 per unit). Built in 1985, Carole Arms Apartments consists of one & two-bedroom units that feature a wide array of amenities. These include all electric gourmet kitchens equipped with a dishwasher and refrigerator, tile flooring, window coverings, air conditioning and more. Community amenities include a sparkling swimming pool with sun deck, on-site laundry facility, children’s playground, picnic area with barbecue, guest parking, lush landscaping throughout and more.

The Buyer was Maskan, LLC based out of California. This was an All Cash transaction. “They are first time buyers, looking for the best deal in Phoenix,” says Ayala, Vice President at ORION. “Buyer and his brother are actively looking for larger multifamily properties and to expand their portfolio.”

The property was well maintained and 99% occupied at the time of sale. The Seller was Housing Opportunity Center, Carole Arms Apartments, an Arizona nonprofit corporation.

Linda Ayala focuses on investment sales of multifamily properties.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

128-Unit Senior Housing Community Comes to Ahwatukee

Investment Property Associates, LLC (IPA) and Retirement Community Specialists (RCS) have partnered for a second time to develop a senior living community in Ahwatukee near the southwest corner of Chandler Boulevard and 50th Street.  The 8-acre site of the planned senior community is part of a 35-acre mixed-use parcel acquired by IPA in 2012.

The senior housing community, called “Generations at Ahwatukee,” is designed to be 160,000 square feet and to provide 128 total units.  The community will be licensed by the State of Arizona as an assisted living and directed care community and will offer independent living, assisted living and memory care.  The community will be operated by Retirement Community Specialists (RCS), a senior living management company based in Ahwatukee since 1998 and in the Phoenix area for over 25 years.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

“We are thrilled to bring senior living to Ahwatukee where RCS has been a member of the business community for over 15 years,” said RCS President Eric Johnston.  “As a resident of Ahwatukee for more than 20 years, it is rewarding to be able to provide residents and their family members with quality senior living options, right in the neighborhood.”

The unit mix includes studio, one-bedroom and two-bedroom apartment styles as expansive as 1,150 square feet, and many unit styles will feature private balconies or patios. The community will offer an array of amenities that promote freedom from everyday burdens for residents to enjoy their interests and quality time with friends and family.  Current plans include a theater, fitness center, library, salon/barber shop, pool, community gardens, activity centers and restaurant-style dining rooms.

Generations at Ahwatukee will be situated to the north of the 402-unit, Liv Ahwatukee, one of IPA’s premier multifamily residential communities scheduled to open this summer.  Senior living fits well within IPA’s multigenerational vision of neighborhood.

“Generations at Ahwatukee will be a sister property to Generations at Agritopia, which is a senior living community that IPA and RCS own and operate in the literal center of the thriving community of Agritopia in Gilbert,” says Scott Brooks, a partner at IPA. “We strongly believe in the thoughtful design of multi-generational communities where people of all ages can interact with and enjoy each other. With Generations at Ahwatukee positioned next door to Liv Ahwatukee, our Generations residents can still very much be in the center of life’s action while also enjoying the high-level amenities and services they desire and expect from a premier senior living community.”

The Generations at Ahwatukee site is fully entitled and IPA expects to break ground in the fall. IPA has developed senior care communities in other markets; this will be the company’s second senior living development in Phoenix. MC Clark-Wayland Builders of Scottsdale, Ariz. will serve as the General Contractor.  Architectural services are provided by Todd & Associates of Phoenix and Thoma-Holec of Mesa, Ariz. will provide the interior design.

Lexington Court Apartments, WEB

Marcus & Millichap Sells 32-Unit Multifamily Asset in Phoenix

Marcus & Millichap Real Estate Investment Services has announced the sale of Lexington Court Apartments, a 32-unit apartment community located in downtown Phoenix. The asset commanded a sales price of $1.7M or $53,125 a unit.
Brian Tranetzki and Rich Butler, multifamily investment specialists in Marcus & Millichap’s Phoenix office, had the exclusive listing assignment to market the property and negotiated the transaction on behalf of the seller, a private capital investor out of Southern California. Brock Danielson from KW Commercial Represented the Buyer, a private investor from Vancouver Canada.
“Lexington Court Apartments is within walking distance of Arizona State University’s downtown campus and is close to numerous boutique restaurants and retail shops,” says Tranetzki. “This property is one of the few remaining midcentury un-refurbished apartment communities in the downtown area. It is surrounded by new townhomes and condos; the buyer intends to eventually build a larger class ‘A’ apartment community on the site. The future development will be fitting for the continued growth and redevelopment of the downtown area,” adds Tranetzki.
Built in 1963, Lexington Court consists of block, cement and steel construction and offers patios and covered parking for each unit. Located along 7th Street and Portland, the property has immediate access to Interstate 10 and direct access into the hub of the central business district of Phoenix.
“The location of this asset is superb,” says Butler. “Central Phoenix is home to ASU’s $219 million Downtown Walter Cronkite School of Journalism as well as their College of Nursing; the University of Arizona has also recently opened its medical school on the Phoenix Biomedical Campus. Hospitals in the area include Banner Good Samaritan, St. Luke’s Medical Center, St. Joseph’s Hospital and Phoenix Children’s Hospital.”

ORION Multifamily

ORION Expands Multifamily Team

ORION Investment Real Estate expanded its multifamily group with the addition of five industry veterans specializing in acquisitions and dispositions of multifamily properties.

“We believe that after a brief pause over last summer largely caused by an increase in interest rates, multifamily is heating up again throughout the Valley,” stated Ari Spiro, president of ORION.  Though transaction volume has dropped since this summer, Spiro continues, ”quite a few larger, institutional transactions closed in the 4th quarter, which usually gives the entire market confidence and a precursor that B and C caliber properties will begin moving again.  Based on our activity, we project that B and C deals will begin to move with the velocity that we experienced in 2012 and beginning of 2013 as we move in the second quarter.”

To take advantage of this resurgence in multifamily, ORION has grown its multifamily presence in recent months with the hiring of Jackie Allen, Linda Ayala, Jason Campagna, Joseph Dietz and Dennis Hoth; each of whom brings decades of real estate experience and multimillion dollar track records to ORION’s already successful and well-established multifamily platform.  “We are excited to add this type of top-notch talent to our team.  The new additions bring a vast track record with experience closing smaller, privately owned projects all the way up to institutional grade properties,” said ORION Principal Sean Stutzman.

ORION closed nearly $100M in apartment transactions recently and is looking to build upon that sales volume as the economy continues its recovery. ORION’s investment sales brokers have closed over $500M in transactions since the firm’s inception in 2009.  Stutzman adds, “ORION will continue its growth by attracting and maintaining experienced Brokers of the highest ethical and moral standards, who appreciate our team approach.”

Allen, Campagna and Dietz bring nearly a billion dollars inmultifamily business with them to ORION.  Allen and Dietz have worked with Spiro for more than a decade, “I am honored to rekindle a working relationship with Jackie and Joe.  Both were top producers at national firms  And Jason was quite a find.”

Campagna joins ORION most recently from RE/Max, where he was one of the top commercial brokers in the state.  With nearly 50 closings a year for the past several years, Jason brings a tireless work ethic and offers a breadth of real estate knowledge to his diverse client base.

Hoth joins ORION from CBRE in Omaha, Neb., and Ayala has been active in both the brokerage and as an investor.

“With the institutional approach offered by Hoth and Ayala’s vision from an ownership side, we can offer unmatched analysis and perspective in this marketplace,” continued Spiro.

Stutzman concludes, “For the first time in nearly decade, both commercial and multifamily segments are stable and showing clear signs of growth.  We are poised to take advantage of this increase in investment sales volume and continue our expansion.”

rsz_colliers

Multifamily Vacancies Tighten as Construction Accelerates

Colliers International released the following information in its 4Q multifamily report. See below for highlights:
§  Vacancy in Greater Phoenix ended 2013 at 7.3 percent, down from 8.3 percent at the end of 2012. Vacancy has declined in each of the past four calendar years.

§  The decline in vacancy is particularly encouraging since it occurred despite a surge in the delivery of new units. With absorption outpacing completions, vacancy should continue to trend lower in 2014.

§  Average asking rents ended the year at $787, a 1.5 percent increase from year-end 2012. Tight vacancy conditions and a strengthening local economy should support more significant rent gains in 2014.

§  Multifamily sales velocity slowed somewhat in the fourth quarter, but activity in the second half of the year outpaced levels in the first half. There was an uptick in the number of properties that changed hands priced at more than $25 million during the fourth quarter.

§  Improving fundamentals and a favorable outlook drive prices higher in 2013. The median price reached $63,300 per unit in 2013, up 13 percent from 2012 and 40 percent higher than the 2011 median price.

THE BROADER VIEW
The Greater Phoenix multifamily market closed 2013 on a positive note, with vacancy ending the year at its lowest point since mid-2006, rent increases gaining momentum and sales prices pushing higher. The strong performance in 2013 is supporting a robust outlook for 2014. In recent years, improvement in the multifamily market was supported by a very low level of inventory growth, but developers ramped up deliveries in 2013, with more than 3,300 units coming online. Despite the delivery of new units, vacancy continued to trend lower due to a surge in net absorption. It is this spike in demand that will fuel property performance in 2014.

CURRENT CONDITIONS
The Greater Phoenix multifamily vacancy rate ended the in Greater Phoenix at 7.3 percent, down from 7.4 percent in the third quarter and a full percentage point lower than at the end of 2012. While there have been a few quarters where the rate has ticked higher, the overwhelming trend shows local vacancy on the decline. After peaking at 13.4 percent at the end of 2009, the rate has improved in each of the past four calendar years.
The vacancy improvement in the Greater Phoenix multifamily market has been widespread. More than 80 percent of the submarkets in the Valley have recorded year-over-year vacancy improvements and nearly 60 percent of the submarkets in Greater Phoenix have a vacancy rate at 7 percent or lower. As a comparison, fewer than 35 percent of the Valley’s submarkets had vacancy rates at or below 7 percent at this point a year ago. These trends hold at the high-end of the vacancy spectrum as well. Only three submarkets in Greater Phoenix have vacancy rates above 10 percent; at the same point in 2012, there were nearly three times as many submarkets with vacancies in the double digits.

Asking rents have steadily pushed higher across the Valley, ending the year at $787 per month or $0.93 per square foot. This represents a yearover- year increase of 1.5 percent, following a modest 0.4 percent increase in 2012. Looking ahead, additional vacancy declines should support further acceleration in the pace of rent growth. At the market level, asking rents should increase by approximately 3 percent, but high-demand areas and submarkets that are recovering rapidly could record rent gains of 5 percent or more.
Sales of multifamily properties dipped 15 percent from the third quarter to the fourth quarter, but activity in the second half of the year outpaced velocity in the !rst half by approximately 20 percent. While the total number of transactions lagged the third-quarter pace, there was an acceleration among higher-dollar transactions.
Nearly half of the properties that changed hands in the fourth quarter traded above $25 million; during the third quarter, transactions over $25 million accounted for 32 percent of all activity.
Improving property fundamentals, a favorable outlook and a surge at the high-end of the market drove prices higher in 2013. The median price reached $63,300 per unit for the year, 13 percent higher than the 2012 median. Pricing has made significant gains in the past two years, with the 2013 median price 40 percent higher than the 2011 median. Cap rates averaged 6 percent during the past 12 months, down from the mid-6 percent range in 2011 and 2012. With interest rates likely to rise, cap rates may not compress much further, but price growth could be driven by rising rents and tightening vacancy.

Microsoft Word - COVER.doc

New to Market: The Residences at Fountainhead Corporate Park

Project Name: The Residences at Fountainhead Corporate Park

Developer: Tilton Development & Goodman Real Estate

General Contractor: Adolfson & Peterson Construction

Architect: Todd & Associates

Location & City: 55th Street & South Plaza Drive, Tempe, Arizona

Size: 389,314 SF

Value: $35M

Estimated start and completion dates (by month or quarter): January 2014 / July 2015

Project Description/Additional Information: The project consists of 322 apartment homes featuring studio, one, two and three bedroom floor plans with flat and loft units contained within four story buildings with six elevators and surface covered parking spaces. The buildings are connected by bridges multiple levels along with balconies and apartments which span over driveway locations at the 3rd and 4th levels creating portico entry ways on both 55th Street and South Plaza Drive. The two story clubhouse anchors the center of the community with top tier amenities including in-door and outdoor fire pit areas, clubroom, fitness area, game room, swimming pool, spa all situated within the secluded and lush landscaped grounds of Fountainhead Corporate Park located in south Tempe.

The Hub, WEB

Big Deals: Multifamily, Aug. to Sept. 2013

There’s no such thing as a “small” deal in this industry, coming out of a recession. However, it’s the big deals, and the brokers who make them, that make the market an interesting one to watch.
In every issue, AZRE publishes the top five notable sales and leases for a period of 60 days (one month out from publication) based on research compiled by Cassidy Turley and Colliers International with CoStar.

1. The Hub on CampusThe Hub
Tempe
384,098 SF; $103,000,000
Buyer: Inland American Communities Group
Listing Broker: Chris Bancroft, Chris Epp, Meredith Wolff, Brad Goff and David Lord, Apartment Realty Advisors

2. Promontory Pointe Apartments
Phoenix
422,376 SF; $41,500,000
Buyer: Green Leaf Partners
Listing Broker: Cliff David, Marcus & Millichap

3. Gateway on Gilbert Apartments
Mesa
387,424 SF; $34,000,000
Buyer: Hamilton Zanze & Company
Listing Broker: David Lord, Apartment Realty Advisors

4. Camden Sotelo
Tempe
164,000 SF; $34,000,000
Buyer: Camden Property Trust
Listing Broker: Mark Forrester, Hendricks & Partners

5. Desert Harbor Apartments
Peoria
262,295 SF; $26,682,000
Buyer: Murray Hill Developments, Ltd.
Listing Broker: Brad Goff, Apartment Realty Advisors
Buyer’s Broker: Alon Shnitzer, ORION Investment Real Estate

The Colony, Cush Wake

Colony Apartments in Phoenix Sell for $8.6M

Cushman & Wakefield of Arizona, Inc. has completed the $8.6M sale of Colony Apartments, 4337 N. 53rd Lane, in the Maryvale suburb of Metro Phoenix.

The property was purchased by CalCap Properties, Inc. of Pasadena, Calif., and sold by Maryvale Urban Investments, LLC dba Bank of America. Built in 1979, Colony Apartments consists of 236 one and two-bedroom units averaging approximately 900 square feet each. The $8.6M sale price equates to $36,441 per unit and $40.47 per square foot.

“The purchase of the Colony apartments represent an excellent opportunity for the new owner to upgrade the units and take advantage of the general growth in the Phoenix multi-family market, ”said Jim Crews, senior director with C&W. 

Crews and Brett Polacheck of C&W’s Multifamily Advisory Group negotiated the transaction.

Sun West, CBRE-CUT

Nucare Properties Buys Sun West Apartments

Nucare Properties, LLC of Phoenix has purchased Sun West Apartments, a 20-unit multi-family property located at 2501 W. Elm St. in Phoenix, from Northwest Valley Property & Associates LLC. Brian Smuckler and Jeff Seaman of CBRE’s Phoenix office represented the Phoenix-based seller in negotiating the $485,000 sales transaction. 

The Paragon_pic - Smaller

The Paragon at Kierland Sells for $57.75M

The Colliers International in Greater Phoenix Southwest Multifamily Advisors’ team recently completed the sale of The Paragon at Kierland, a 276-unit, Class A luxury apartment complex located on the Westin Kierland Golf Course, for $57.75 million or $209,239 a unit/$200 a square foot.

The transaction is the highest per unit sale to date in 2013 and the highest per unit sale in the last five years for properties without an active condo map in the Phoenix market, according to Colliers International in Greater Phoenix.

Sentinel Real Estate Corporation of New York City acquired the property at 15608 N. 71st Street in Scottsdale. The seller was Sunstone Realty Advisors of Vancouver, Canada.

Colliers’ Southwest Multifamily Advisors’ team of Jerry Tenge, senior vice president of multifamily investments; and Tristan Charlesworth, an associate; served as the exclusive representatives of Sunstone Realty Advisors. The Southwest Multifamily Advisors previously negotiated the acquisition of The Paragon on behalf of Sunstone in November 2009 for $34.2 million ($123,913 a unit/$118.19 a square foot). The Paragon has risen in value by $23.55 million in four years.

In total, more than 65 investors bid on the property and 22 investors placed bids at more than $50 million.

Sunstone selected Sentinel for its ability to close the deal.

“The Paragon is among the most elite investment properties in Arizona. The future opportunities at The Paragon are numerous from converting the complex into condos, running a timesharing program or continuing to operate the complex as apartments,” Tenge said.

Built in 2000 and renovated in 2008, The Paragon consists of 289,233 rentable square feet in 23 three-story buildings, along with a single-story recreation building, set on approximately 10.4 acres. The unit mix includes one-, two- and three-bedroom apartments ranging in size from 924 square feet to 1,323 square feet. Current occupancy is 98 percent.

“The luxury apartment complex has been maintained with meticulous care and is located in a highly desirable resort area of Scottsdale near fine shopping, dining and golfing,” Charlesworth said.

Located just west of the Loop 101 and Scottsdale Road, The Paragon is situated along the Westin Kierland Golf Club at the Westin Kierland Resort & Spa and is within walking distance of 30 prime restaurants and more than 100 specialty shops at Kierland Commons and Scottsdale Quarter.

Unit amenities include gourmet chef’s kitchens, ceramic countertops, custom cabinetry, built-in microwaves, full-size washers and dryers, oversized walk-in closets and large private patios or balconies in select units. The property is designed with many resort-style features including a heated pool with pool bar, fire pit and cabanas.