Less than six months after a certificate of substantial completion was recorded against the property—indicating that the property was fully constructed and ready for occupants—Avenue 25 Apartments in Phoenix sold for $35.4m or nearly $140k per unit. The buyer was TruAmerica, in the person of its CFO, Karen Millan, who paid $10.62m in cash and financed the remaining $24.78m in purchase price with Capital One.
The 254-unit apartment complex is located south of the southeast corner of I-17 and Union Hills Drive in north Phoenix. It is comprised of ten 3-story residential buildings totaling 245,928 ft2 and a 1-story clubhouse totaling 3,774 ft2. The complex sits on an 8.98 acre site, is gated and features a pool and private-access garages with certain units. The bulk of the project was constructed in 2013 with the aforementioned certificate of substantial completion issued February 24th, 2014.
The seller and original developer—Efune family-affiliated company, NextGen Apartments—previously acquired the land on which the project sits in June of 2013 from HCW for $3.55m or $9.15 per square foot. Daniel and Hilton Efune, as principals of NextGen, encumbered the property with $17m in new construction debt with Wells Fargo, set to mature in November of 2015. Assuming that construction was fully funded with the Wells Fargo note, and ignoring carry and operational costs, Friday’s sale price of $35.4m represents a cash-on-cash return of 418.3% on the project for NextGen.
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