Security Properties Buys Tempe Multifamily Property
- Apr 10, 2012
Tempe, Ariz.—Security Properties Inc. has acquired MetroPointe, a 408-unit apartment property in Tempe, Ariz. Completed in 2009, MetroPointe was bought by Security Properties primarily with 1031 exchange proceeds from its $42 million sale of the La Vista apartment complex in Santa Maria, Calif., in December.
The property includes two resort-style pools with cabana areas, an outdoor living room, two outdoor fireplaces, a business center, fitness center and sand volleyball court. Unit amenities include nine- and eleven-foot ceilings, roman soaking tubs and pendant lighting over breakfast bars. Madrona Ridge Residential will manage the property.
“We were attracted to the Tempe submarket primarily because of its close proximity to the Intel expansion and other catalysts for job growth,” David M. Dufenhorst, Security Properties’ chief investment officer, tells MHN. “We will be pursuing further investments in the Tempe, Chandler and Ahwatukee submarkets.”
The acquisition of MetroPointe brings the number of Phoenix-area multifamily assets owned by Security Properties to three. The company also owns the 151-unit Miramonte Apartments and the 264-unit Sonoran Vista Luxury Apartments and Townhomes, both of which are in Scottsdale.
According to Reis Inc., the metro Phoenix apartment market is currently seeing some of the strongest net absorption numbers since the mid-1980s, with demand strong but very little new product coming on line. During the fourth quarter of 2011, vacancies dropped 60 basis points, and for the entire year, the drop was 240 basis points, bringing vacancies to 2007 levels by the end of the year.
Rents have also crept upward, notes Reis. Asking and effective rents during 4Q11 were up 1.9 percent and 2.2 percent, respectively, compared with a year earlier. During the fourth quarter, the 12-month rolling average for Phoenix-area multifamily cap rates was 6.8 percent, down from the low 7s that characterized most of 2011.