In one of the largest apartment transactions this year in Phoenix, TruAmerica Multifamily and institutional capital partner Investcorp have acquired Little Cottonwoods, a 379-unit multifamily community in Tempe for $56.7 million.
This is the third and largest multifamily investment in the Phoenix area for TruAmerica and its fourth joint venture with Investcorp in fifteen months. Los Angeles-based TruAmerica manages a portfolio of more than 27,000 units nationwide of which 923 units are located in greater Phoenix including Trevi, a 290-unit community in Chandler, and Avenue 25, a 254-unit community in North Phoenix.
“We see Phoenix as one of the most desirable apartment markets in the United States,” said TruAmerica Senior Managing Director, Greg Campbell. “Boasting nation-leading growth projections for population and job creation, we continue to look for opportunities to grow our portfolio in the Phoenix market. We still see a lot of runway here.”
Built in phases between 1985 and 1991, Little Cottonwoods offers a mix of one-, two-, and three-bedroom units located in 31 two-story garden style buildings. The well-amenitized 20-acre property includes three resort-style swimming pools, 24-hour fitness center, clubhouse, and picnic areas.
TruAmerica and Investcorp plan an extensive interior and exterior renovation program designed to give the property a whole new “vibe”. Updates to the interior units may include new countertops, vinyl wood plank flooring, under cabinet lighting, appliance packages, and upgraded cabinetry. The partnership plans to enhance the pool & picnic areas and also update the look and feel of the property through new exterior paint and landscaping.
The purchase price is well below current replacement cost as well as other deals currently trading in the Phoenix market, according to Brian Kelley, Principal with Investcorp’s Real Estate Group.
“This is our fourth investment with TruAmerica, a strong operating partner with a proven track record. We look to capitalize on the [Tempe] submarket’s strong demographics and limited supply of comparable quality product,” said Kelley.
Little Cottonwoods is located along McClintock Drive in the heart of Tempe, an area characterized by its robust and rapidly growing job market and high concentration of amenities. The property is located within minutes of approximately three million square feet of retail, dining and entertainment.