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| Ovation at Tempe Apartments, Tempe, AZ |
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| Bill Passo |
TEMPE, AZ – Passco Companies, LLC, a privately held
Calif.-based real estate company that specializes in the investment,
acquisition, development and management of commercial properties throughout the
U.S., along with its JV-partner, InSite Property Ventures, has sold Ovation at Tempe, a 270-unit
multifamily community in the Phoenix submarket of Tempe, Arizona for $36
million.
The JV partnership
initially acquired the asset for $25.85 million in 2014 and sold it for $36 million
three years later, according to Passco’s Founder and CEO, Bill Passo.
“We recognized that there
was a tremendous opportunity to create value and capitalize on the ongoing
growth throughout the Phoenix Metro, which is exactly what we did,” says Passo.
“When we initially acquired the property, the
region was in proven recovery with plenty of runway left for growth in terms of
both value and rents. In fact, rents in the Phoenix Metro have increased by 5.6
percent over the past year alone, which is attracting significant investor
interest to the region.”
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| Bill Passo |
Passo explains that the
firm’s ability to recognize the deep value potential of this market early in
the recovery cycle allowed them to sell the asset for a premium price,
ultimately achieving a 170.5 percent return to investors.
During ownership, the JV
partnership implemented a series of interior and exterior improvements to the
apartment community including upgrading unit interiors, constructing additional
carports and enhancing the property’s exterior and community amenities.
“This was a strong
value-add opportunity for our firm,” says Belden
Brown, Senior Vice President and National Sales Manager at Passco Companies
who also notes that the firm is actively seeking value-add opportunities
throughout the U.S. “By renovating and updating the property, we were able to
optimize the asset and significantly drive value in a very short period of
time.”
Michael Sun, Founder of InSite Properties, LLC adds, “These
capital improvements also provided the opportunity to significantly increase
rental and ancillary income, as well as position the asset for long-term rent
appreciation. This made the property very attractive to investment groups,
allowing us to achieve an IRR of approximately 21-22 percent.”
Ovation at Tempe is a very
unique apartment community that features one- and two-bedroom apartment units,
as well as separate casitas and townhomes situated on approximately 16 acres.
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| Michael Sun |
“The property has one of
the lowest unit densities in Tempe and is strategically located in close
proximity to retail, entertainment, employment hubs, and education centers,”
says Mark Forrester, Senior Managing
Director at commercial real estate firm Berkadia, which completed the sale on
behalf of the JV partnership, in addition to arranging the financing.
“Passco and InSite Property Ventures’
value-add strategy truly positioned the asset for long-term growth and filled a
void in the local market for high-quality Class A product.”
The property is located at
4502-4505 S. Hardy Drive in the city of Tempe, Arizona.
Berkadia’s Phoenix team of
Mark Forrester, Senior Managing
Director, Ric Holway, Senior
Managing Director, and Dan Cheyne,
Senior Director, represented the seller, while Berkadia’s Managing Director Jackson Cloak of the firm’s Irvine
office arranged the $27 million in financing through Freddie Mac.
For a complete copy of the company’s news release,
please contact:
Lauren Burgos/ Lexi
Astfalk
Brower, Miller & Cole
(949) 955-7940
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