29th Street Capital (29SC), a privately-held real estate investment and advisory firm, has acquired Park Tower Apartments, a 180-unit multifamily community in Chandler, Arizona. 29SC’s strategy is to invest $883,000 into renovations to significantly upgrade the interiors and to enhance the exterior of the apartments. This is the sixth acquisition 29SC has made in the Phoenix/East Valley market in just over one year.
“Park Tower Apartments is perfectly positioned to take advantage of the positive momentum in the Chandler market,” said Dusty Eddy, 29SC’s Vice President of Acquisitions for Phoenix, Las Vegas and San Diego. “We are excited to add a quality asset, with plenty of value-add potential, to our growing Phoenix portfolio while expanding to such a sought-after submarket.”
Park Tower Apartments resides within the city of Chandler, a desirable suburb within the East Valley. The property is located minutes from Loop 101, Loop 202, and Hwy 87, which provide access throughout the East Valley and the rest of the metro area. Chandler is a popular choice among young, well-employed families for its excellent schools and proximity to large employment centers. Job centers include the Loop 101 Technology Corridor and ASU Research Park, which are home to multiple Fortune 100 employers.
Arguably one of the best submarkets in the Valley, average vacancy in Chandler has dropped to 4.4% and rents have grown 10% over the past 12 months. Strong population and job growth have spurred new development – including some ultra-high-end apartments – but primarily commercial office space, of which there is 1.5 million square feet under construction and 1.7 million square feet planned. Apartment net absorption is expected to remain positive due to job growth and demand for quality housing in the area.
29SC plans to invest $883,000 ($4,900 per unit) in capital improvements to enhance the exterior of the property, add amenities and renovate the interiors. Interior upgrades will include new cabinets, flooring and appliances, back-splashes, resurfacing counters and two-tone paint as well as new light fixtures and hardware. Upon completion, Park Tower Apartments will provide higher quality housing that is more competitive with comparable properties in the Chandler market. The transaction closed May 31. The dollar value of the transaction was not disclosed.
29th Street Capital has acquired 10 multifamily assets over the past 12 months in markets including Houston, Texas; Denver, Colorado; Durham, North Carolina; Chicago, Illinois; and Oakland, California. It is also actively pursuing additional opportunities throughout the U.S. The firm will continue to target smaller value-add deals, which are below the institutional radar, with the intention of offering its investors above-market returns.