PHOENIX-In its first portfolio acquisition, Alliance Residential Co. and Boston-based AEW Capital Management are ready to undertake repositioning of 15 multifamily complexes in three states in an expansion of the Broadstone brand. When all is said and done, the all-in capital expenditure of the 3,959 units is expected to hit nearly $500 million.
Although the assets differ in class and style, they're all well-located in high-growth markets. "This is an opportunity that was made available to us," says John Cunningham, managing director of acquisitions for locally based Alliance Residential. "The portfolio met our requirements for investment so we went ahead and bought it."
Cunningham tells GlobeSt.com that the class A and B complexes, developed in the late 1980s and early 1990s, will undergo some type of renovation and re-branded as Broadstone properties. New York City-based DRA Advisors LLC had an Eastdil Realty New York team marketing the 94%-leased package, which included the 130-unit La Entrada Apartments at 16831 N. 85th St. in Scottsdale.
Brad Goff, principal with Apartment Realty Advisors' Phoenix office, wasn't part of the deal, but speculates DRA put the properties on the market due to strong pricing available in today's market. "They'd had the properties for a long time," he says, "and realized a significant increase in value for the assets."
Although Alliance Residential typically holds assets for three to five years, Cunningham says there is no disposition timeframe for the package. "The total renovation program will hopefully last less than three years, but the market will determine our approach in terms of hold," he adds.
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