Joint Venture Trades Arizona Assets for $313M
- Sep 09, 2021
A joint venture between Bascom Arizona Ventures and Pacific Life Insurance Co. has sold two luxury multifamily properties—Ascend at Kierland and Elite North Scottsdale. Located in the North Scottsdale, Ariz., market, the properties total 724 units and were purchased by The Ezralow Co. for $312.5 million.
CBRE’s Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch of Phoenix Multifamily Institutional Properties represented the seller.
Bryan Ezralow, CEO of The Ezralow Co., said in a prepared statement the firm has been focused on multifamily properties in the Phoenix market for many years. He said the two properties gave the company the opportunity to acquire immediate scale in one of the most affluent residential areas in the metro.
Ezralow said the acquisition is part of the company’s strategy to acquire 2,000 to 3,000 units in the Phoenix metro over the next 12 months. The firm owns about 30,000 units in the Bay Area, Los Angeles and Seattle as well as more than 2 million square feet of retail, office, storage and industrial assets. Ezralow also has more than 1 million square feet of properties under development.
The joint venture partners bought the properties, then known as The Legend at Kierland and The Tradition at Kierland, in an October 2017 portfolio transaction from TIAA for $148 million. The Legend of Kierland with 360 units, rebranded as Elite North Scottsdale, sold for $73.4 million in 2017, and The Tradition at Kierland with 364 units, rebranded as Ascend at Kierland, sold for $74.6 million in 2017, according to Yardi Matrix data.
The two properties were previously sold in June 2006 by European Investors as part of a larger portfolio deal totaling $408.4 million that included four additional multifamily assets, Yardi Matrix reported.
In November 2020, the two properties became subject to two loans originated by AXA Equitable Life Insurance Co. that were set to mature in November 2022. The loan for Ascend at Kierland was for $57.5 million and the loan for Elite North Scottsdale was for $56.6 million, Yardi Matrix reported.
Elite North Scottsdale, completed in 1996 and located at 6735 East Greenway Parkway on more than 17 acres, was 95 percent occupied at the time of sale. The property has one-, two- and three-bedroom units with sizes ranging from 803 square feet to 1,397 square feet. Rents range from $1,660 to $2,595 and an average of $1,930.
Ascend at Kierland, completed in 1998 and located at 6633 East Greenway Parkway on more than 18 acres, was 96.4 percent occupied at purchase. It has one-, two- and three-bedroom units with 800 square feet to 1,411 square feet. Rents range from $1,769 to $2,680 and an average of$1,947, according to Yardi Matrix.
The properties are surrounded on three sides by the Westin Kierland Resort golf course. Unit interiors feature luxury finishes including quartz countertops, new cabinets, kitchen backsplashes, undermount sinks, vinyl plant flooring, ceilings fans, upgraded lighting and plumbing fixtures. The living and dining rooms have two-tone paint and new blinds and crown molding.
Gunter said in prepared remarks the sellers invested significant capital elevating the communities with new and refreshed amenities and renovating approximately 75 percent of the unit interiors. He added the location on the golf course combined with the luxury amenities of the properties drives ongoing and strong demand.
Both properties recently received upgraded state-of-the-art fitness centers with separate spin and yoga rooms, renovated clubhouses and heated pools. New amenities for Ascend at Kierland include a putting green, dog park and an electric car charging station while Elite at North Scottsdale received a new swimming pool, dog park and package locker system.
Mark Brotherton, senior portfolio manager for Bascom Arizona Ventures, said in a prepared statement said the joint venture was proud of the level of detail committed to the repositioning of the two North Scottsdale assets. He said Bascom Arizona Ventures, a subsidiary of The Bascom Group, would continue to look for new opportunities in Phoenix and take advantage of the region’s surging multifamily fundamentals.
CBRE research stated Phoenix led all U.S. metros in rent growth in the second quarter of 2021 with a 15.3 percent increase year-over-year. Rent growth grew in the North Scottsdale submarket, outperforming the metro average with a 16.9 percent increase.