Property Details
Below Market Rents  Below Market Occupancy  Repositioning Opportunity  NOI Growth  Repeat Sponsor 
Asset Profile
Value Add

Villas de Azul Apartments

Phoenix, AZ

Multi-Family Property

This deal is oversubscribed

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Sterling Real Estate Partners Phoenix, AZ & Los Angeles, CA
Sterling Real Estate Partners
  • IRR 24%
  • Equity Multiple 1.86x
  • Hold Period 2-3Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 8% in Y2
  • First Distribution Jul 2020
  • Distribution Frequency Quarterly
  • Co-Investment 10%
  • Preferred Return 9%
  • Investor Profit Share 70%
  • Asset Profile Value Add
  • Loan-to-Value 80%
  • Current Occupancy 75%

About this Property

Why This Property?

Sterling Real Estate Partners: The current ownership ran into some significant cost overruns that will benefit our ownership. As a result, the property is currently 75% occupied and under capitalized and under performing the market. The basic investment metrics are very favorable: the cost basis is very low and a significant discount to replacement cost. The proforma exit pricing can be supported with current sale comps. Stabilized properties in this submarket are selling for over $100,000 per unit compared to the 3-year exit price of $94,275 per unit.



Why Do You Like This Strategy?

Sterling Real Estate Partners: This is a classic distressed investment opportunity. The property is 75% occupied and under performing in the submarket. The property needs to be recapitalized as a path to stabilization. We have successfully executed this business plan many times.



How Are You Mitigating Risks?

Sterling Real Estate Partners: Rental growth is not needed for the business plan to be successful. We can market it to market and be profitable. The $67,000 per unit cost basis is very low and a significant discount to replacement cost. The proforma exit pricing can be supported with current sale comps.

About this Property

Why This Property?

Sterling Real Estate Partners: The current ownership ran into some significant cost overruns that will benefit our ownership. As a result, the property is currently 75% occupied and under capitalized and under performing the market. The basic investment metrics are very favorable: the cost basis is very low and a significant discount to replacement cost. The proforma exit pricing can be supported with current sale comps. Stabilized properties in this submarket are selling for over $100,000 per unit compared to the 3-year exit price of $94,275 per unit.



Why Do You Like This Strategy?

Sterling Real Estate Partners: This is a classic distressed investment opportunity. The property is 75% occupied and under performing in the submarket. The property needs to be recapitalized as a path to stabilization. We have successfully executed this business plan many times.



How Are You Mitigating Risks?

Sterling Real Estate Partners: Rental growth is not needed for the business plan to be successful. We can market it to market and be profitable. The $67,000 per unit cost basis is very low and a significant discount to replacement cost. The proforma exit pricing can be supported with current sale comps.

Offered By

Sterling Real Estate Partners

Sterling Real Estate Partners

Phoenix, AZ & Los Angeles, CA

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Assets Under
Management

Currently
$1B 20+ assets
Exited
$2.8B 50+ assets
Portfolio LTV
50%  
Historical
Realized Returns

Total IRR
20%  
Equity Multiple
2x  
Annual Cash
10%  
Years Of
Experience

As Principals
30+ years  
In Business
4 years  
Size
10 Staff * Dedicated investor relations
* All information is reported by Sterling Real Estate Partners as of 5/1/2019.
Assets Under
Management

Currently
$1B 20+ assets
Exited
$2.8B 50+ assets
Portfolio LTV
50%  
Historical
Returns

Total IRR
20%  
Equity Multiple
2x  
Annual Cash
10%  
Years Of
Experience

As Principals
30+ years  
In Business
4 years  
Size
10 Staff * Dedicated investor relations
* All information is reported by Sterling Real Estate Partners as of 5/1/2019.

Financials

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Offering Financial

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Diligence Preview

Location Details

Phoenix, AZ

Villas de Azul is centrally located in a strong infill location at Thomas Road and 43rd Avenue. This location provides residents direct access to numerous area demand drivers including I-10 Employment Corridor, New Loop 202 South Mountain Interchange, Maryvale Baseball Park, Grand Canyon University, Downtown Phoenix, Banner Health, Central Avenue Office Corridor, and the Southwest Industrial Corridor. The New Loop 202 South Mountain Interchange is a 22-mile expansion of the 202 freeway at 59th Avenue and the I-10. The expansion will connect the west valley to the east valley. This new stretch of freeway will have some of the greatest growth in the valley paving the way for new business parks, industrial, and retail development.

Documents

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Offering Agreement Documents

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