Phoenix, AZ – November 30 2018 – The Sponsor acquired the 1973 vintage, 73-unit, Arcadia Park Apartments and the 1980’s vintage, 50-unit Hermosa Apartments in Phoenix, AZ, as a two-property portfolio for $12.6mm ($102.4k/unit). Sponsorship will spend $3.4mm ($27.6k/unit) to upgrade unit interiors, and rehab the exterior, landscaping, pool area and clubhouse. Total project cost is projected at $17.2mm ($139.8k/unit).
The communities are located within the prestigious Arcadia neighborhood of Phoenix, just south of the Arcadia / Indian School redevelopment corridor, home to multiple shopping centers, numerous restaurants, bars, and entertainment venues. This strategic location allows the properties to capture residents from multiple commerce hubs, as opposed to relying on a single submarket. Single-family home sales within the Lower Arcadia neighborhood average over $600,000 – with a range from $335,000 to $4.25M.
Arcadia Park is a unique rental community offering 73 total rental units on approximately 2.27 acres. The community offers two, one-bedroom layouts at 625 and 650 square feet, a two-bedroom, one-and-one-half bath townhome unit layout at 1,025 square feet. Arcadia Park is complemented by amenities including a leasing center, sparkling swimming pool, barbeque areas, a center courtyard, laundry facility, gated access, and covered parking.
Hermosa is a unique rental community offering 50 total rental units on approximately 1.21 acres. The community offers studios at 395 square feet, one-bedroom layouts at 513 square feet. Hermosa is complemented by amenities including a leasing center, sparkling swimming pool, barbeque areas, a center courtyard, laundry facility, gated access, and covered parking.
Despite the property being neglected by the current Mom and Pop owners, who have self-managed the property for the past 20+ years, occupancy at these well located assets is over 95%. The property has strong drive-by visibility, and many nearby retail and restaurant locations.
Phoenix added 25,288 new residents (#1 in nation) and 86,800 new jobs (#2 in nation) in 2018. Job growth in the city was 4.2% in 2018, more than double the national average.
Rent growth in the market has been strong. It is projected to remain strong as population and job growth increases, and housing supply remains constrained.
Phoenix rents increased 9.6% in 2018 and led the nation in February 2019 at 8.0% YoY overall, twice the national average of 4.1%. Sales price per unit and per foot in Phoenix have increased 26% YoY for 100+ unit multifamily sales from $128k ($128.00/SF) to $153k ($183.83/SF).
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About Bear Holdings Group LLC
Bear Holdings Group, based in Scottsdale, AZ, provides project sponsorship, joint venture and investment opportunities for multifamily construction, acquisition, conversion and rehabilitation. With expertise that includes fund creation, project sponsorship, and asset management tailored to partnership objectives, Bear Holdings Group currently has interests in dozens of multifamily properties through five states. Contact Bear Holdings Group today at email@example.com.