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Tuesday, Mar 19, 2024
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Multifamily Buying Spree Targets Changing Rental Scene

Sunroad Enterprises of San Diego went on a buying binge in November, scooping up apartment complexes in Arizona, Nevada and Washington state. Sunroad declined to say how much it spent on the acquisitions.

“We really like the multifamily space,” said Dan Feldman, president of Sunroad Asset Management.

“The cities that we’ve chosen are cities that have a strong economy, lots of job creation and business friendly climates,” he said. “We have a really good relationship with brokers and lenders in all of these markets.”

The flurry of recent deals is part of the company’s drive to extend its holdings beyond San Diego County, where investment opportunity in multifamily property is scarce.

“It’s very difficult to find something to buy in San Diego, very difficult,” Feldman said. “It just made sense to have some strategic diversification outside of San Diego.”

Still, Feldman said the number of deals in November was “a little bit unique,” adding that Sunroad typically does three to five acquisitions a year.

He said the company looks for apartment projects that are 20 to 25 years old and are in “vintage condition.”

Recent acquisitions were the 250-unit Marina Village Apartments in Sparks, Nevada, the 234-unit Adobe Ranch Apartments and the 240-unit Horizon Ridge apartments in Henderson, Nevada, the 308-unit San Portella apartments in Tempe, Arizona, and Clocktower Village in DuPont, Washington.

Sunroad acquired Clocktower Village in partnership with Wermers Properties, R&V Management and Loma Linda University with Sunroad as the managing partner and Loma Linda University as a limited partner.

With 33 buildings, “Clocktower Village provided the right combination of a high-quality property with significant upgrade potential,” Feldman said. “Combining our passion, understanding and keen knowledge of the multifamily industry, this partnership is eager to continue investing in new properties similar to Clocktower.”

Las Vegas and surrounding communities are also areas which Sunroad is eyeing for future deals.

“The market in Las Vegas continues to gain rapid momentum, and Sunroad Enterprises looks forward to expanding our footprint in the market,” said Michael Dow, president of Sunroad Multifamily.

“Our firm is currently seeking new acquisition opportunities and nearing completion of new deals that will increase our total unit count in the market to more than 1,200 units,” Dow said.

In all, Sunroad has about 4,000 units in various stages of construction or renovation.

Sunroad entered the apartment field about 10 years ago, and Feldman said the market has never been stronger, due in part to changing demographics.

“You have a lot of renters by choice,” Feldman said, from young people who don’t want to put all their money into owning property to professionals who want the flexibility to move from job to job and downsizing baby boomers.

Adding to the attraction is the high level of amenities building owners are putting into apartment complexes, from pools and spas to game rooms and outdoor barbecue areas.

Feldman said Sunroad makes it a point to spruce up the property it buys to add to its market appeal.

“We go in and we do a very strategic upgrade package,” he said.

For instance, Sunroad plans to rename Adobe Ranch Apartments in Henderson as Cyan after extensive remodeling which will include installing upgraded cabinets, quartz countertops, stainless steel appliances, resurfaced tubs, hardwood floors and new light fixtures and doors.

The company also plans to invest more than $4 million renovating the San Portella apartments in Tempe.

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