A joint venture between Origin Investments and Randolph Street Realty Capital has acquired Union @ Roosevelt, a new, 80-unit Class A multifamily property in downtown Phoenix. Colliers International brokered the deal on behalf of the seller, Metrowest Development, which was the original developer of the property.
This purchase represents Origin’s first investment in Phoenix. The partners plan to make use of an adjacent vacant land parcel and leverage the apartment community’s location in a downtown opportunity zone to more than double the size of the property, adding 105 additional units. Development of the second phase is slated to commence in second quarter 2020.
The total investment, including development costs, will be $55 million.
“There were challenges this transaction faced, including the GPLET structure currently in place on the asset, the mechanics of assuming a Freddie Mac Loan and navigating through the various steps necessary to qualify as an opportunity zone investment,” Thomas Briney, Origin Investments’ director of acquisitions, told Multi-Housing News. “The joint venture overcame these challenges through persistence, creativity and a great legal team that in the end dotted all the i’s and crossed all the t’s.”
He noted that while each challenge had its own set of circumstances, ensuring that all the opportunity zone requirements were met was essential, not for just this investment, but also to avoid any undue consequences for Origin’s approximately $100 million Qualified Opportunity Zone Fund.
Situated in the Roosevelt Row submarket near downtown, Union @ Roosevelt is a five-story structure with nine studio, 60 one-bedroom and 11 two-bedroom units, which average about 830 square feet in size. Also included is more than 9,100 square feet of retail space, which is currently 33 percent leased. The planned second phase would add 4,000 square feet of retail space and a 1,000-square-foot leasing space.
Also added in the planned expansion will be an amenity suite to feature an almost 4,000-square-foot fitness and lounge area and 1,100-square-foot rooftop deck.
Union @ Roosevelt’s location in Roosevelt Row puts it in one of the most up-and-coming areas in metropolitan Phoenix. It is the location of the future 30-acre research and education center in downtown Phoenix called the TGen Bioscience Campus.
Also comprising the downtown campuses of Arizona State University, the University of Arizona and Northern Arizona University, the area will support an expected 40,000 jobs and 20,000 students by the time the TGen Bioscience Campus is completed in 2025.
Union @ Roosevelt is approximately 300 feet from a Metro Valley Light Rail station and is within walking distance of popular restaurants, coffee shops and independently-owned art galleries.