TA Associates Buys M-F Portfolio in Metro Phoenix for $75M

Two apartment complexes in metro Phoenix have been purchased by TA Associates for a total of $75 million.

PHOENIXTwo apartment complexes in metro Phoenix have been purchased by TA Associates for a total of $75 million, it was announced Tuesday by Institutional Property Advisors, a brokerage division of Marcus & Millichap, which arranged the transaction.

The properties are Pinnacle Terrace, a 300-unit apartment complex in Chandler, Ariz., that sold for $39.2 million ($131,000/unit) and Pinnacle at Union Hills, a 264-unit community in Phoenix that sold for $36.25 million ($137,000/unit).

IPA senior director Steve Gebing and Marcus & Millichap vice president/investments Cliff David advised the seller, which a release described as “a global leader in wealth and asset management services.” Marcus & Millichap was unable to comment further on the transaction.

“Based on the positioning of each asset within … its respective submarket, both properties are prime candidates for the implementation of exterior and interior renovation programs,” Gebing said in a release.

Pinnacle Terrace was developed by Trammell Crow Residential and BRE Properties Inc. in 1998 and is sited on almost 19 acres at 801 N. Federal St. in Chandler. Amenities include a residents’ lounge and business center; clubhouse with a theater room, conference room and billiards table; and 24-hour fitness center. The community also has two resort-style swimming pools and spas with poolside ramadas, 70 detached garages, and controlled-access gated entry.

Pinnacle at Union Hills was developed by Trammell Crow Residential in 1997 and is at 4750 E. Union Hills Drive in Phoenix. Amenities include a clubhouse, 24-hour fitness center, business center and conference room, two resort-style swimming pools, spas with poolside ramadas, 79 detached garages, 32 detached storage units, a courtyard/playground area and controlled-access gated entry.

Both properties feature one-, two- and three-bedroom floor plans with fully equipped gourmet kitchens, 9-foot ceilings, full-sized washers and dryers, walk-in closets and linen closets, large soaking tubs, and private patios or balconies with additional outside storage.

The metro Phoenix apartment market is at the center of substantial conflicting forces, according to a second-quarter report from M&M.

On one hand, job growth leads the national average and home prices have been rebounding, but on the other hand deliveries of new apartments have been soaring, with about 4,200 units having been completed in the past 12 months. Furthermore, 8,300 more units are under construction and an additional 27,500 reportedly are in the planning pipeline.

The bottom line, according to the report, is that vacancies will continue to dip this year, to about 6.9 percent, with effective rents rising by about 2.1 percent, though this represents a smaller increase than last year.