PHOENIX-One of the largest merchant builders of multifamily assets in the metro area has brought a 2,434-unit class A package to market on an all-cash basis. The $443-million portfolio consists of a newly finished 466-unit complex and five more that are scheduled for completion beginning in September and ending in August 2009.
According to Tyler Anderson, vice chairman of CB Richard Ellis Inc.'s Phoenix office, the complexes are in excellent locations when it comes to infrastructure and employment corridors. "This is a pretty good time to market something like this, with the amount of money that's chasing Phoenix, and the amount of capital interest in apartment buildings," adds Anderson, who with CBRE's first vice chairman Sean Cunningham and first vice president Jack Hannum is representing Trillium Residential LLC.
Trillium's aggressive business plan involves development of 2,000 apartment units per year for the next five years in the Phoenix area. Anderson tells GlobeSt.com that the method by which the portfolio is being offered means closings can be staggered so a buyer or buyers can put money into the market at different interest rates and times. "It'll be a staggered deployment of capital," he says. All assets are located in markets with high barriers to entry and replacement costs, the broker adds.
The only completed complex is the Rio Salado at 1033 N. Parkside Dr. in Tempe. In September, Trillium wraps up work on the 360-unit Deer Valley Apartments at 20425 N. 7th St. in Phoenix. In 2008, Trillium will complete the 270-unit Papago Apartments at Van Buren and 50th streets in Phoenix and 340-unit Villas at 109th and Olive avenues in Peoria. The 2009 completions are the 274-unit North Apartments at 20425 N. 7th St. and 724-unit Pinnacle Peak at Happy Valley Road and Interstate 17, both in Phoenix.
The assets' existing and projected rental rates range from 98 cents per sf to $1.37 per sf, with units from 876 sf to 955 sf. The portfolio mix includes studios as well as one-, two- and three-bedroom apartments.
Anderson says the team's targeting late July to evaluate offers. The plan is to market the assets as a portfolio and one-offs to pension fund advisers, REITs and high-net worth investors. "If someone wants to bring some European money into Phoenix, that'd be great, too," he says.
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