JV Scores ’80s-Vintage Phoenix Apartments for $27M

A partnership including L5 Investments, MLA Properties and BH Equities has acquired Cielo Apartments, a 360-unit apartment community in Phoenix for $27.2 million. Built in 1981, Cielo sits on more than 10.5 acres at 8222 North 19th Ave., which is about 10 miles from downtown.

Cielo has a mix of studio, one-, and two-bedroom units with sizes ranging from 455 square feet to 879 square feet. The units feature fully equipped kitchens and private patios or balconies. Common amenities include two pools, a newly renovated clubhouse and fitness center, picnic/barbecue area and covered parking.

Planned Improvements

The buyers plan to treat the deal as a value-add play. Plans call for $4.2 million in capital improvements to increase occupancy and attract and retain residents. The renovations will focus on updating unit interiors including flooring, cabinets, lighting, appliances and adding in-unit washers and dryers in some one- and two-bedroom units.

“Although Cielo is in excellent condition overall, it needs a significant amount of key amenity and interior upgrades to help meet the demands of the renter base in the Phoenix area,” said Michael Flaherty, founder and managing partner of L5 Investments, an El Dorado Hills, Calif.-based multifamily investment firm.

Brett Polachek and Jim Crews of Cushman and Wakefield brokered the transaction on behalf of both the buyer and the seller. The deal was an off-market transaction.