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.
To Contact the Author:
Paul Dionne – pdionne@vizzda.com
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