Attracted by the strong demand for multifamily properties in the Phoenix area, particularly in the desirable Ahwatukee Foothills submarket, LaSalle Investment Management has acquired San Melia, a 488-unit luxury apartment community on behalf of its U.S. core open-end real estate fund, LaSalle Property Fund.
Located on 28 acres at 14435 S. 48th St., San Melia has one-, two- and three-bedroom floorplans with rents ranging from $1,163 to $1,703 and an average rent of $1,344 per month, according to Yardi Matrix data. Community amenities include a fitness center, clubhouse, tennis, volleyball and basketball courts, swimming pool and two spas.
The Class A property is about 96 percent occupied. It was built in 1998 by Mark-Taylor, Arizona’s largest multifamily developer, which owned it until 1999. The most recent owner was State Street Global Advisors, which acquired the asset from Aimco in December 2015 for $84 million, Yardi Matrix reported.
The price paid by the LaSalle Property Fund was not released but LPF Portfolio Manager Jim Garvey said in a prepared statement the transaction was “an excellent opportunity to achieve attractive risk-adjusted total returns with an emphasis on income. This acquisition directly aligns with our investment strategy of purchasing well-located core assets that offer stable cash flows and upside potential.”
LaSalle Investment Management is a global real estate investment manager with approximately $60 billion in investments under management. LPF invests in and manages a diversified commercial real estate portfolio including industrial, multifamily, office and retail in top markets across the United States. Among the markets where LaSalle Investment Management owns multifamily properties is Denver, where the firm paid $112 million for Legacy at Highlands Ranch, a 422-unit community at 355 W. Burgundy St., in late 2017.
Growing Phoenix Market
The firm was attracted to the Phoenix metro area because is it a national leader in job and population growth. The area has seen its labor force increase by nearly 18 percent over the last five years while its unemployment rate is low with major employers like JPMorgan Chase, Wells Fargo and Intel finalizing plans to bring an additional 14,000 jobs to the area. LaSalle noted young people, particularly Millennials, are migrating to the region and now account for about 21 percent of the local population.
“Phoenix remains a top-performing multifamily market in the U.S. due in large part to the rapid growth and diversification of the region’s employment base, which is attracting young talent from across the country and contributing to the area’s long-term growth prospects,” Summit Walia, managing director of acquisitions at LaSalle, said in a prepared statement. “These factors, combined with the limited supply in Ahwatukee Foothills and the high quality and desirable location of the asset made San Melia a uniquely compelling investment opportunity.”
San Melia is adjacent to more than 2.4 million square feet of retail, dining and recreation options at the neighboring Ahwatukee Foothills Towne Center. A pedestrian walkway at the north end of the property provides residents convenient access to the retail center, which includes a Sprouts and AMC Theatres. The community is also near major roads, including the I-10, Price Road and Loop 202.
Image courtesy of Yardi Matrix