Another Community Closed (94 units)
Well, it's been a busy year and it doesn't look like it's going to slow down any time soon. @Sam Grooms and I closed another community.
This is a wonderfully located 94-unit complex about 15 minutes away from Phoenix downtown. Phoenix is one of the most attractive growth markets in the U.S. today, with population growth, income growth, and rent growth indicators all pointing toward a continued expansion.
The community sits a block away from Mesa Downtown. This location is designated as QOZ with a lot of new construction underway, and many more projects in the permitting stage. The Mesa Downtown is undergoing a significant revitalization, with tremendous private and municipal investment underway.
The NOI at acquisition is about $366,000. This is according to the seller's T-12. However, there is about $100,000 of CapEx inside the R&M, so in reality, the NOI is likely closer to $475,000. The fully re-positioned NOI is projected at around $1M. What this means is that we see about $400 per door of value-add. Although we don't buy on Cap Rate, depending on which NOI you take into consideration, our purchase is in the range of 3.5% - 4.5% Cap. To us, it doesn't really matter.
The unit-mix is fantastic 1x1, 2x1, and 2x2, and the average size is over 900 sq.ft.
We are spending $3M on the renovations. On the interiors, we are doing our typical new shaker cabinets, granite tops, underhung sinks, stainless appliances, new fixtures, flooring, in-unit W/D, and paint. We are adding a gym and a god park, and renovating the pool area.
With all of the new construction coming into this location, post-renovation Sun Crest will become the most affordable option for renters desiring to live in a trendy, revitalized location.
Congratulations to Sam and all of our partners!