Strong Rental Market Fundamentals
Marcus & Millichap is projecting a 2.9 percent increase in employment in the Phoenix MSA for 2016. They believe that this will result in a 6.5 percent increase in effective rents and a decrease in vacancy to 4.5 percent, as apartment developers are unable to keep up with demand. Of the 9,000 units in the construction pipeline, none are in the property’s submarket. Accordingly, Crossroads Apartments is well positioned to benefit from these strong market conditions.
Surrounded by Jobs
The property is located in an area that is a major employment hub within the Phoenix MSA. Large employers include Discover Financial Services adjacent to the property (2,365 employees), Honeywell (3,000 employees), American Express (2,500 employees), Cox Communications (1,700 employees), PetSmart (1,356 employees), Safeway (1,145 employees) and HonorHealth (926 employees).
Easy Access – See Map on right side
The property is located at the northeast corner of the intersection of Interstate 17 and State Route 101, with average daily traffic counts of 127,900 and 162,954, respectively. There is easy access to every major employment hub from the property.
The seller has made significant capital expenditures to the property. The renovated leasing office was reopened just three months ago. The grounds are immaculate and all of the amenities are in excellent condition.
Enhanced Value by Renovating Units
Although the seller focused on the exterior and amenities, the apartment units, while very well maintained, are largely unchanged from their original condition. The Sponsor intends to replace all original kitchen appliances during the first three years of the holding period and significantly upgrade one-third of the apartment units with refreshed kitchens, bathrooms, and other features. The Sponsor is making this investment to increase cash flow and favorably position the property for sale at the end of the holding period.