Location: Phoenix, AZ
Property Type: Multifamily
Number of Units: 150
Acquisition Date: August 17th, 2012
Status: Sold by Gelt
On August 17th, 2012 Gelt Bethany Holdings, LLC, acquired the 150-unit apartment formerly known as Broadstone on Twelfth Apartments for $9,300,000. This equated to a basis of $62,000 per unit and $71.76 per square foot. On October 17th, 2017, Gelt Bethany Holdings, LLC sold the asset (since rebranded ?Capella Place?) for $19,575,000, or $130,500 per unit and $151.05 per square foot. Cumulatively, we netted our investors a cumulative return of 182%, which equates to an average annual return of 35% (non-compounded) over the 5-year hold period.
The property, built in two phases, was constructed in 1971 and 1985 and is located in the prominent submarket of Camelback/Biltmore within the greater Phoenix metro area. It is comprised of 129,594 square feet and offers six studio units, seventy-six one-bedroom units, sixty-seven two-bedroom units, and one three-bedroom unit. Community amenities at the time of acquisition included a 24-hour laundry facility, fully appointed clubhouse, pool and spa, fitness center, and communal barbeques. We recognized a ?value add? opportunity through strategic improvements to the property including rebranding, repainting the full exterior, adding a perimeter fence and security gate, adding barbeque area/pergola, and renovating select units. Through its premier location in the Camelback/Biltmore submarket, which has experienced persistent demand in recent years, Capella Place has been able to enjoy significant income growth. For example, net operating income over the last 12 months was approximately 70% greater than the net operating income generated by the property when we acquired it in 2012. This strong income growth coupled with the low cap rate environment we are experiencing today allowed us to achieve an extremely attractive sales price of $19,575,000, which is more than double what we paid for the property just five years ago.
Capella Place was a well-executed and well-timed ?value-add? play, and we are thrilled to announce another success story for our loyal investors.