Phoenix, AZ – June 27, 2019 – The Sponsor acquired the 1986 vintage, 156-unit, Las Colinas Apartments complex in Phoenix, AZ for $14.75mm ($95k/unit). Sponsorship will spend $2.43mm ($16k/unit) to upgrade unit interiors, and rehab the exterior, landscaping, pool area and clubhouse. Total project cost is projected at $18mm ($115k/unit). Investors are projected to earn a 21.4% IRR over a 36 month term.
The well maintained, 156-unit, 96.8% occupied, Las Colinas Apartments complex is located in Phoenix, AZ. It is approximately eight miles northwest of downtown Phoenix, on the hard-corner of N. 57th and West Thomas Rd. in the booming West Valley submarket. The property has one and two bedroom units averaging 673 sf, boasts wide street frontage and good visibility along Thomas Rd. with over 30,000 vehicles per day. Numerous schools, parks, retail amenities and a grocery store are within walking distance to the property, which also provides residents with convenient access to Interstates I-10 and I-17.
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 and 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).
Occupancy at the subject is 96.8% and rents are approximately 20% below market. Sponsorship will increase rents to market and achieve further rent growth through a three-tiered renovation program, in total taking rents from $1.09 psf to $1.44 psf.
Sponsorship has successfully exited three projects similar to Las Colinas in Phoenix in the past two years. The three projects total 818 units, had a combined cost of almost $79mm and sold for a collective $104mm. The projects returned an average IRR of 41.7%. Sponsorship is also renovating an additional four projects totaling 495 units with a total capitalization of $56mm in Phoenix. These projects are projected to be completed in the fourth quarter of 2019.
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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 firstname.lastname@example.org.