TruAmerica Enters Beehive State
- May 27, 2015
In partnership with an unnamed institutional investor, TruAmerica Multifamily has acquired Crossing at Daybreak, a 315-unit Class A apartment community in greater Salt Lake City, TruAmerica announced Tuesday. The seller was the property’s developer, Western National Properties. The purchase of the complex, in South Jordan, is TruAmerica’s first entry into Utah, as it continues to expand across major urban markets in the West.
In late January, CPE reported on the $482 million purchase by TruAmerica and a syndicate of domestic and foreign institutional investors of a 14-property, 2,669-unit, mostly Class B multi-family portfolio in Southern California. The deal was the largest such acquisition in the region in nearly 20 years.
The company has also made acquisitions in metro Seattle, Denver and Northern California and reportedly has plans for purchases in both Portland and Las Vegas “in the very near future.”
“We’ve been eyeing the Salt Lake City market for some time, looking for the right opportunity,” TruAmerica senior managing director Greg Campbell said in a release. “The Salt Lake City metro demonstrates some of the strongest multi-family fundamentals in the United States, and there are no signs of it letting up.”
Campbell highlighted the metro area’s low unemployment rate (just 3 percent) and the fact that Utah is the nation’s youngest state as measured by median age, 31.2. Thirty-two percent of the state’s population is under 32.
“This millennial demographic is more likely to rent than buy a home, especially in and around Salt Lake City, which is one of the most affordable rental markets in the nation,” Campbell added.
The 14-acre Crossing at Daybreak comprises one-, two- and three-bedroom apartments in a low-density garden-style community. Each unit features a gourmet kitchen with high-end finishes, hardwood floors and 9-foot ceilings, and the community features a resort-style pool, spa and cabana; a resident lounge; game room; 24-hour fitness center; and picnic and barbecue areas.
Though the complex was built in 2011, TruAmerica says it plans to put up to $1 million into unit interior enhancements (including in-unit Wi-Fi), a dog wash station and upgraded landscaping.
Occupancy is 95 percent and monthly rents range from $975 to $1,450, a TruAmerica spokesperson told Commercial Property Executive.
TruAmerica was able to get 5-year interest-only, 2.15 percent floating rate, agency debt financing, arranged by Allan Freedman and Ed Zimbler of Berkadia.
The Wasatch Front region is enjoying substantial, and accelerating, employment growth, with a 3.3 percent increase in hiring project for this year, according to a first-quarter report from Marcus & Millichap.
Overall apartment vacancy is expected to rise about 40 basis points, to 4.3 percent, however, as aggressive development adds 3,400 apartment units this year, a 4.0 percent jump. Still, the report, predicts, owners should see effective rents rise about 3 percent in the current year.