PHOENIX, AZ – Funds managed by Ares Management and TruAmerica Multifamily announced the acquisition of Broadstone Gateway, a 240-unit family community in the Phoenix, AZ metro area. The transaction was valued at $30.75 million.
Broadstone Gateway is located at 1700 North 103rd Avenue in Avondale, 20 miles west of downtown Phoenix. Built in 2004, the pet-friendly, gated community features a mix of one-, two- and three-bedroom open concept living spaces. Amenities include a resort-inspired swimming pool and spa with poolside cabanas, fitness center, community barbecues, bocce ball court and playground.
This is the second investment for the Ares-TruAmerica joint venture, which in November acquired a 1,402-unit multifamily portfolio in Baltimore, MD for $236 million.
“The acquisition of Broadstone Gateway is consistent with our strategy of investing in multifamily properties that have repositioning potential and where our expertise can add meaningful value,” said Howard Huang, Partner in the Ares Real Estate Group. “We look forward to continuing to partner with TruAmerica on assets that can benefit from our collaboration and where we can enhance the quality of rental properties in desirable markets.”
The partnership will immediately execute a multimillion-dollar capital improvement program. Changes to the unit interiors will include new faux-stainless steel appliances, quartz kitchen and bathroom countertops, wood-style flooring, and new lighting and plumbing fixtures. Significant improvements will also be made to the pool area, clubhouse and fitness center, along with new signage and landscaping to enhance the curb appeal of the property.
The property benefits from its location at the northwestern corner of Loop 101 and Interstate 10, providing easy access to all major employment centers in the Phoenix metro area.
“Avondale is an example of the first ring suburban submarket in which we typically invest and can add meaningful value,” said Noah Hochman, Senior Managing Director of Capital Markets for TruAmerica Multifamily. “We look for areas with great schools and a transportation infrastructure in place that allows residents to easily commute to jobs in the region.”
With approximately $10 billion in assets under management across equity and debt strategies as of March 31, 2017, the Ares Real Estate Group has a significant presence in the multifamily sector. Over the past decade, Ares’ U.S. equity value-add strategy has invested in over 31,000 units across its most recent funds.
With the acquisition of Broadstone Gateway, TruAmerica adds 240-units to the 1,567 units it already owns in the greater Phoenix area. TruAmerica specializes on acquiring and renovating Class B multifamily properties to create affordable quality rental housing for middle-income families.
Steve Gebing and Cliff David, Senior Managing Directors in the Phoenix office of Institutional Property Advisors represented both parties in the transaction.