HSL Properties Growing its Arizona Portfolio
- Jun 30, 2014
Tucson, Ariz.—The Station on Central, a 414-unit apartment community in Phoenix, has been purchased by Tucson-based HSL Properties. Located at 4140 N. Central Ave. in Phoenix, the 15-year-old, Class A, urban infill community offers a mix of one-, two- and three-bedroom apartment homes. HSL purchased the property from North Central Avenue Apartments for $53 million June 24.
HSL also plans to construct another Encantada community in northwest Tucson. That $43 million project will feature 368 units and is slated for groundbreaking in the fourth quarter of this year. With these two new initiatives, HSL, the largest apartment owner in Southern Arizona, is poised to substantially grow its 10,000-unit multifamily portfolio in the Grand Canyon State.
“We continue to be very bullish on the Arizona market,” Omar Mireles, executive vice president of HSL Properties, tells MHN. “We anticipate that the state will continue to experience strong job and population growth into the foreseeable future. While we have made the strategic decision to sell some older, long-term-hold assets in our portfolio, we continue to look for acquisition opportunities in the Phoenix and Tucson markets.”
The Station on Central features a number of luxury amenities, including a fully appointed fitness center, yoga studio, resort-style pools and spa, fire pit with cushioned seating, Internet lounge and controlled access entry.
“The Station represented a great opportunity for us to acquire high-quality, urban infill property located in a very dynamic submarket and right on the METRO light rail line, Mireles says.
“The METRO light rail has been a transformational force for Phoenix in terms of urban mobility and development. A METRO stop directly in front of The Station gives the property’s residents convenient access to employment and entertainment hubs along the expanding 22-plus miles of track. We see a significant amount of upside for the submarket and the property, given these attributes.”
Built by JPL, The Station on Central includes 366,000 square feet of building space. HSL Properties will undertake a $600,000 renovation over the next year.
HSL has developed three Encantada communities, including more than 860 units, in Tucson since 2011. “We have experienced strong absorption rates and rental rates in these communities and feel there is strong continued demand for highly-amenitized, Class AA properties,” Mireles says.
“We also had the opportunity to acquire an excellent development site adjacent to the Tucson National golf course in early 2013 that had originally been planned for 500 condominiums,” he continues. “The previous owners had installed approximately $2 million of infrastructure that we are able to use for our development, resulting in a significant reduction of our cost basis.”
As the fourth Encantada branded community in the Tucson market, Encantada at Tucson National will provide an amenity package that will surpass the other Tucson Encantadas. It will also have an excellent location, Mireles says.