Phoenix, AZ Multifamily, DST

Phoenix, Arizona

ASSET CLASS:  Class A Multifamily
OFFERING SIZE:  $30,396,157
UNITS:  225
MINIMUM INVESTMENT:  $100,000
LEVERAGE:  49.96%
YEAR BUILT:  2017-18
HOLD PERIOD:  7-10 Years
TARGETED YR.-1 RETURN:  4.85%

Avilla Victoria is a 225-unit gated apartment community featuring single-story rental homes, giving residents the feeling of single-family living. The Property was built in two phases in 2017-2018, and includes a mix of one-, two-, and three-bedroom single-story homes, each with their own backyards and high-end interior finishes including stainless steel appliances, faux-wood vinyl flooring and quartz countertops. Community amenities include two resort-style swimming pools, an outdoor fireplace, and dog park.  

The Property is located in Queen Creek, Arizona, which is roughly 40 miles southeast of the Phoenix metropolitan area. Situated in the heart of Queen Creek’s Town Center district, the Property is surrounded by more than 1.5 million square feet of commercial, entertainment and retail space, as well as the Phoenix-Mesa Gateway Airport and San Tan Mountain Regional Park.

According to the 2010 Census, the Phoenix MSA had a population of 4,192,887 residents. As of July 1, 2019, the Phoenix MSA population is estimated to have grown to 4,857,962 residents, representing an approximate 1.86% growth rate per year over the 2010 census. The growth rate of the Phoenix MSA was above the State of Arizona growth rate of 1.45%, and above the national population growth rate of .73% over the same period.

According to the US Bureau of Labor Statistics (“BLS”), the unemployment rate within the Phoenix MSA was 4.7% as of August of 2019. The unemployment rate within the metro is below the state of Arizona rate of 5.0% as of June, 2019, and below the national unemployment rate of 3.5% for August of 2019.

Our market analysis was based on a REIS.com Performance Monitor report for the Phoenix MSA apartment market (as defined by REIS) containing 2nd quarter 2019 information. According to the report, the Phoenix MSA apartment market, containing 294,287 units, had a vacancy rate of 4.7% during the 2nd quarter of 2019, up 30 basis points from the prior quarter but unchanged from the level found one year ago. The Class A vacancy rate was 5.8%, up 20 basis points over the past year. REIS has forecast new construction to total 22,378 units from 2019 to 2023 while net absorption is forecast to total 19,427 units. As a result, the vacancy rate will gradually rise to 5.3% by 2023, still a very healthy level. Historically, average rents have posted strong gains. The average rent gain from 2014 through 2018 was 5.58% per year with 2018 posting the strongest rent increase at 8.3%. Asking rents are up 6.6% over the past year to reach a level of $1,081. Class A rents are $1,294, up 6.8% over the past year. REIS has forecast asking rents to grow by 5.1% in 2019, and by an average of 3.46% per year over the next five years.

The Project is furthermore located within the Chandler/Gilbert submarket, which contains just 25,582 units or 8.7% of the overall Phoenix MSA inventory. The current vacancy rate for this submarket is 5.9%, which is forecasted to gradually rise over the five-year forecast period. The average asking rental rate within the submarket is $1,352/unit per month. Rental rate gains are forecast to outpace the overall market. When broken down by unit type submarket rental rates now average $1,178/unit per month for a one-bedroom ($1.50/SF), and $1,424/unit for a two-bedroom ($1.33/SF) and $1,779/unit for a three-bedroom ($1.34/SF).

Assets Under Management:: $7.3 Billion
Total Private Placements: 237
Total Assets Purchased: $8.57 Billion
Total Equity Raised: $4.75 Billion
# of Properties Purchased: 644
# of Active Investors: 12,500
Years In Business: 50
Market Share: 28%

This property will be internally managed by the sponsor.

Targeted Yr.-1 Cash-on-Cash: 4.85%
Targeted Cash Range: 4.50% - 5.50%
Targeted Cash Average: 4.90%

DST Due Diligence & Advisory Services

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DISCLAIMER
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuing company, or any affiliate, or partner there of the issuer. All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to the “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. Past performance and statements regarding current occupancy and earnings are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by the issuer, or one of its partner/issuers. The issuer does not warrant the accuracy or completeness of the information contained herein. Some offerings are subject to a “cooling off” period and are not available to all investors. 
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Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC, and the issuer are not affiliated.