Newly Built Phoenix Apartment Complex Sold for $35.4m

By: Paul Dionne | Vizzda 

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 24^th, 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

The Montecito Senior Living Facility in Peoria Transacts

Vizzda – March 9^th, 2014 – An 195-unit assisted and independent living facility in Peoria sold to Dune Real Estate Partners on March 4^th, 2014 for $35.92m. The nineteen-building complex named The Montecito exists west of the northwest corner of the loop-101 & Bell road intersection in Peoria, or at 17271 N 87th Ave, Peoria. Lifehouse Health Services was the seller.

The nineteen-building complex totals 253,239 square feet, consisting of a two-story, 137,308 square foot main building and eighteen satellite buildings totaling 115,931 square feet, on 10.06 acres zoned C-2. Due to the inclusion of $4.4m in personal property, no price per unit calculation is applicable to the transaction. Dune Real Estate paid $9.92m down, and $26m new debt with Blackstone REIT affiliate recorded with sale.

Lifehouse had previously acquired this property as land only on May 6^th, 1998 for $665,400 or $1.52 per square foot and $12,555,800 new debt with PFC Bank, with a 7% interest rate, maturing 2014. The property was developed by Lifehouse in 1999. PFC Bank issued an additional $6,466,100 of note to the project on December 18^th, 2000 having a 7.55% interest rate, maturing 2042. Both prior notes with PFC Bank were released January 2^nd, 2013 and a $10m new note with Capital One Bank was issued concurrently.

By:

Daniel Alpers

Director of Civil & Municipal Projects

Vizzda