Decco 109 Value-Add Investment in Tempe, AZ

[Zachary Rall]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Tempe.

Purchase price: $4,800,000
Cash invested: $1,740,000

Contributors:
Matt Borgeson

Decco 109 is a 40-unit multifamily investment located in Tempe, AZ. My partner, Matt, and I closed on it in November in a JV agreement with another group. Since then, we've begun the process of exterior and facade renovations, while going through permitting and designs with SRP and the city for much more extensive renovations.

What made you interested in investing in this type of deal?

In-place financials meant that it sat on the market for an extensive period of time. That allowed us to purchase it at a discount relative to most trades in the market.

How did you find this deal and how did you negotiate it?

CBRE brought it to us and negotiations were pretty straightforward.

How did you finance this deal?

Local bank. 75% LTC.

How did you add value to the deal?

Exterior and facade renovations currently underway. We're going through the city and SRP for permits and designs to remove the chiller system and install individual HVAC units, individually submeter the units, and add a washer/dryer to each unit. All of the above are really going to make this a killer deal.

What was the outcome?

Still in the middle of renovations!

Lessons learned? Challenges?

Had some challenges with our initial property management company, but we've since moved on to another group that has done much, much better.