Fresno Becomes Strategic Distribution Hub for Familiar Firms

FRESNO, CA—Fresno is home to some of the largest employers in the Central Valley, including the Internal Revenue Service, Saint Agnes Medical Center, California State University, Fresno and Kaiser Permanente. As a result of employment demand, well-located multifamily properties continue to draw residents and investors.

A recent example is the acquisition of Phoenix Townhomes, a 248-unit condominium-style apartment community located at 5355 North Valentine Ave. The Bascom Group LLC, in partnership with Artemis Real Estate Partners, recently purchased the asset for $35 million or $141,129 per unit.

“Phoenix Townhomes is an extremely well-located property with convenient access to strong employment centers, schools, and numerous retail and entertainment options,” says Jim Singleton, Bascom’s senior vice president and principal. “New developments and the excellent quality of life offered by Fresno continue to attract a growing number of young professionals and families relocating to the area.”

Singleton says the Fresno market continues its healthy growth via employer investment by companies seeking to take advantage of Fresno’s low cost of living and relative affordability, with several ongoing and planned development projects estimated to bring more than 3,600 jobs to the area.

“This submarket has seen very little new construction of multifamily communities over the past several years, despite the strong demographic fundamentals,” says Lee Nguyen, senior vice president of portfolio operations with Bascom. “We see this purchase as a great opportunity to complete some best-in-class improvements to the property, while still offering our residents an attractive and affordable place to live.”

Phoenix Townhomes is located in the Northern Fresno submarket, situated near the highly trafficked West Shaw Avenue and a short drive from numerous retail and entertainment attractions, including River Park Shopping Center and the Fresno Chaffee Zoo. Located only six miles northeast of downtown and within minutes of State Highways 99, 41, 180 and Fresno State University, Phoenix Townhomes provides residents with access to shopping, dining, entertainment, education and major employment centers throughout Fresno county. It’s also become an e-commerce hub for familiar corporate faces, GlobeSt.com learns.

“Fresno’s centralized location and relative affordability have made the city a strategic distribution hub for large corporations like Amazon, ULTA Beauty and The Gap,” Singleton tells GlobeSt.com. “In 2018, all three companies completed or announced large e-commerce fulfillment center projects in Fresno representing a $410 million total investment that is projected to add 3,657 new jobs to the Fresno economy.”

Indeed, Fresno’s industrial market remained active through the end of 2018, as overall vacancy fell to an impressive 1.5%, with some submarkets recording vacancy rates below 1%, according to a report by Newmark Pearson Commercial. Last year, the market had a net absorption of 662,000 square feet, although more than half of the absorption took place in the southeast market sector, where larger distribution buildings are prevalent. The absorption in most of the other market sectors was more modest, at between 70,000 to 100,000 square feet absorbed. The weighted average lease rate was

$0.45 per square foot marketwide, although a closer look at the different submarkets shows there was a significant variance between each area. For instance, the northeast submarket boasted a $0.80 per square foot average lease rate, compared with only $0.37 per square foot for the southeast submarket, says the report.

Mark Mimms at SVN/MJM & Associates Inc. brokered the transaction.

Since 1996, Bascom and its affiliates have acquired 331 multifamily properties throughout the United States, totaling more than 85,000 units. More than $100 million of those acquisitions have been in Fresno, totaling more than 2,100 units. In the past 12 months, Bascom has completed more than $1.5 billion in US multifamily transactions.

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