Galleria Palms represents TruAmerica’s sixth investment overall in the Phoenix MSA and fifth investment overall in 2018. Demand for multifamily housing throughout metro Phoenix continues to be driven by robust employment growth. Galleria Palms is located in one of Phoenix’s most dynamic submarkets, Tempe. Tempe was ranked as the 9th best city in the country for jobs last year. Conservative projections are estimating Tempe to add more than 15,000 employees by 2020.
Galleria Palms represents a proven value-add opportunity as the seller has completed a very moderate scope of renovation to date.
Galleria Palms is a 424-unit garden-style multifamily community built in 1997. The property features an attractive unit mix comprised of one-bedroom units (30%), two-bedroom units (59%), and three-bedroom units (11%). All units have 9-foot ceilings, full-size washers/dryers, microwaves, private patios or balconies, and walk-in closets. In addition, Galleria Palms features a wide array of community amenities that include two swimming pools and spas, poolside ramadas, fitness center, clubhouse, business center, full indoor basketball court, movie theater, lighted sand volleyball court, playground, bocce ball court, outdoor chess/checkers board, corn hole court, barbeque grills, and carports.
Galleria Palms enjoys an outstanding location as it is adjacent to two freeways, U.S. 60 and I-10. The property is within a 20-minute drive to over half a million jobs and within a 10-mile radius to 50% of the new jobs created from 2016 to 2017. Major companies within a 10-mile radius of the property include State Farm (10,000 employees), JP Morgan Chase (4,000 employees), and ADP (1,500 employees).
The property offers its residents a low-density setting as it is situated on 26.5 acres (16 units per acre). Tempe is truly an infill submarket where core-plus, garden-style product is rare. The high cost of land makes it economically difficult to construct garden-style product, and new product that has been delivered is high-density in nature.
Galleria Palms represents a true and proven value-add opportunity as the seller has very moderately upgraded 77% of the units (325 units). TruAmerica plans to bring all units to a fully renovated status by upgrading all units with new faux-stainless steel appliances, lowered quartz countertops, vinyl plank flooring in the common areas, cabinet fronts, kitchen backsplash, and lighting and plumbing fixtures.
Furthermore, TruAmerica plans on upgrading the community amenities and exteriors by enhancing the pool and spa area, fitness center, signage, landscaping, lighting, and curing deferred maintenance items.