Rincon Partners Buys $22M Community in Phoenix

Previous ownership implemented a thorough renovation program in 2015. The asset traded at almost four times the original purchase price.

ESI Ventures has sold the 171-unit Madison Grove Apartments in Phoenix. Rincon Partners acquired the property for $21.5 million. According to data provided by Yardi Matrix, the sale was subject to a $16.6 million loan funded by Fannie Mae and originated by Bellwether Enterprise. The 12-year loan bears an annual interest rate of 4.6 percent.

Situated at 7045 N. 7th St., Madison Grove Apartments is surrounded by several restaurants, retailers and a large grocery store. The northern Phoenix community consists of 29 studios, 124 one-bedroom and 18 two-bedroom units, ranging in size from 450 to 835 square feet. Common-area amenities at Madison Grove include:

  • fitness center
  • business center
  • clubhouse
  • barbecue area
  • swimming pool
  • laundry facilities
  • 256 parking spaces

Downtown Phoenix is situated about 10 miles away. Public transportation is available, with bus and light rail stations near the community. Major thoroughfares nearby include Route 51 and Interstate 17. The Camelback corridor, with its multiple employment opportunities, can be reached in a few minutes by car.

Value-add strategy

ESI acquired Madison Grove in 2009 for $5.3 million. The investment firm obtained a $6.8 million construction loan in 2015, provided by CoBiz Bank, according to Yardi Matrix. ESI used the loan to implement an extensive renovation program, which included new air conditioning, hardwood flooring, upgraded appliances, energy efficient windows, new paint and TVs in all units, among other improvements.

We saw value in renovating this property, as the multifamily market in Phoenix has been gaining traction since 2017. The property improvements executed were designed to serve the millennial audience that seeks to rent a clean, modern unit with on-site amenities in a walkable environment,” said Brandon Wolsic, executive vice president of ESI, in a prepared statement.

Photos courtesy of ESI Ventures

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