It is no secret that owning apartments in Phoenix is back in vogue. The 8 unit Park Central on Earll apartments sold last week for $65,625 per unit. While all eight units were 2 bedroom floor plans, these were in no way updated or refurbished. In fact, the rents were quite low & there was plenty of deferred maintenance.
But, as we’ve heard for years with regards to real estate, it’s “location-location-location.” The property is directly across the street from Dignity Health’s St. Joseph Hospital at Earll and Third Avenues, & adjacent to Park Central Mall. With the Metro Light Rail 3 blocks away, nearly 100 eateries within a mile & all that is mid-town Phoenix outside the front door, it is easy to see how this property pulls walk scores in the high 60’s.
Built in the mid-1950’s the property is block constructed and offers custom wooden siding and ceilings at the covered walkways. And, while the property is in need of updating, the floor plans are functional and there are other amenities like covered parking, on-site laundry and even a large second-story observation deck (aka party platform.)
In short order the new owner will transform this quaint property with low rents ($525/month) into a contemporary and sought after living place in the heart of midtown- one that tenants will pay closer to $900-$950 per month to live at.
Buying dated apartments in desirable and improving locations to ‘dress up and lease up” is not a new idea in commercial real estate. In fact, this is becoming a common strategy in our Phoenix apartment market today. But, with fewer ‘reposition’ candidates coming available in these trendy locations, apartments like Park Central on Earll are bringing higher sell prices. And with rental demand for contemporary product in these superior locations, there appears to be no shortage of prospective tenants. —Scott Trevey, CCIM 480-205-0862