Alpha Wave Investors, a private equity investment firm specializing in opportunistic and value-add multifamily and hospitality assets in the Western U.S., has acquired Orange Tree Village, a 110-unit townhome-style multifamily property in the Casas Adobes neighborhood of Tucson, Arizona.
The property, which is currently 85-percent occupied, was acquired in an off-market transaction at a significant discount to replacement cost, according to Jordan Fisher, a Founding Partner of Alpha Wave Investors.
“This property meets our investment criteria at all levels,” says Fisher. “The asset has been under-managed in recent years, resulting in a strong opportunity to create value through strategic renovations.”
Alpha Wave will invest more than $2 million in capital upgrades at the property, including new paint and roofing, an upgraded pool and clubhouse, a new fitness center and children’s playground, interior unit renovations, as well as a dog park.
“The Tucson market has lagged many others in the current recovery cycle, providing a unique opportunity for experienced investors to generate strong yields,” Fisher explains. “While many primary and secondary U.S. markets are facing potential over-supply of multifamily units, Tucson has very few multifamily projects under construction, resulting in strong demand for existing, renovated product.”
Fisher also points to recent job growth in the region as a driver of rental demand in the market moving forward.
Caterpillar recently announced a new headquarters location in Tucson that will bring approximately 600 jobs, while Geico plans to open a new corporate office that will bring more than 700 jobs to the region. Further, The Tucson Sentinel reported this week that a planned Amazon distribution center in Tucson could be as large as a million square feet. The article notes that Amazon’s typical distribution centers range from 800,000 square feet and 1,000 employees to 1,500,000 square feet and 2,000 employees.
“We recognize that this is the ideal time to invest in additional properties in Tucson,” says Fisher. “By selecting properties that are well-located and poised for growth, we are able to leverage current momentum in the market and acquire ahead of peak pricing.”
Constructed in 1981, Orange Tree Village offers spacious townhomes in one-, two-, and three-bedroom floor plans. Residents enjoy private patios and easy access to nearby retail, entertainment, and employment. The property is located at 645 W. Orange Grove Road in Tucson, Arizona.
Alpha Wave Investors acquired the property for $10.55 million from a Texas-based private investor. ABI Multifamily, the Western U.S.’s leading multifamily brokerage and advisory services firm, represented both buyer and seller in the transaction. Alon Shnitzer, Senior Managing Partner with ABI, was the lead broker for the buyer. Jon Ibrahim, Vice President with ABI, was lead broker for the seller.
David Walkin of Meridian Capital Group arranged acquisition financing for Alpha Wave Investors. The loan was provided by Los Angeles-based Thorofare Capital.