Why Origin Investments Is Turning Its Attention to Phoenix
Partnering with Randolph Street Realty Capital, the firm has acquired the 80-unit Union @ Roosevelt apartment complex as its foray into the market.
“Right now we are very keen on Phoenix, and for a variety of different reasons,” Tom Briney, director of Origin Investments, tells GlobeSt.com. “There are few markets who have made as much progress diversifying their economy in a more meaningful way than Phoenix. And the shift in the market in Phoenix is as recent as the last 18 months. It is one of the last of the markets to really join the recovery. Further, it is now at pre-recession employment and economic levels. The quantity and quality of jobs being created there is excellent. That, coupled with a cost of living that is low compared to a lot of markets it would compete with—like Colorado, California and the Pacific Northwest—we believe there is lots of runway left in Phoenix.”
Union @ Roosevelt is in Downtown Phoenix, adjacent to a metro station, making the property an ideal fit for Origin’s first buy in the market. “In the end this investment is great fit for us because of its location and the potential for growth,” says Briney. “There are three to four pockets in Phoenix where people want to live and companies want to invest. This infill market is one of them.” In addition, Origin has acquired an adjacent parcel with plans to develop an additional 105 apartment units, 4,000 square feet of retail space, a 1,000 square foot leasing office and a full suite of amenities including a nearly 4,000-square-foot fitness and lounge area, swimming pool and a 1,100 square foot rooftop deck. “Combine the 80 newly developed existing units with the additional parcels for development, and Union @ Roosevelt gives Origin a certain level of scale and a platform for future expansion into Phoenix,” adds Briney,
Origin is a value-add investor, so the business plan to more than double the size of the property fits into the company’s core strategy. “The experience and expertise to undertake this type of expansion is directly in our wheel house,” says Briney. “We’ve done this, to one degree or another, in other markets. Further, to qualify as an opportunity zone investment, we had to, at a minimum, double the site of our investments. Our plans fulfill that obligation.”
However, the business plan also underscores the demand for housing in the market, particularly in the Downtown area. “In terms of the addition of another 105 units, that level of addition is not going to move the needle toward oversupply in Phoenix,” says Briney. “There is more than enough absorption in Phoenix, and in this submarket, to justify that type of expansion.”
This deal is likely the first of more in Phoenix. Origin is bullish on the market and plans to build a portfolio next year. “Our intent is to continue to grow and build our base in Phoenix,” says Briney. “We view Phoenix as a great opportunity for us now and in the foreseeable future. At the same time, our expansion in Phoenix is not predicated on any specific allocation.”