CASE STUDY: CITI ON CAMELBACK CONDOMINIUMS
Background
- Purchased 196 of the condos in the 360-unit development in 2012
- Convenient location minutes from employment centers of Downtown Phoenix, Camelback Corridor, and five major hospitals
- Also within minutes of light rail and luxury retail and entertainment at Biltmore Fashion Park
Investment Strategy and Process
- Consolidate management of homeowners’ association (HOA) and AHC units to provide more efficient and higher quality services, while reducing operating expenses for AHC units
- Invest substantial HOA reserves to upgrade exterior lighting, pool areas, clubhouse, fitness equipment, landscaping and parking lots
- Complete in-unit upgrade program with granite countertops and wood plank flooring to more favorably compare with Class A competition (while still maintaining a sizeable rent spread) and enhance retail condo exit strategy
Exit Strategy
- Since units will command highest prices as owner-occupied condos, preferred strategy is to exit to individual retail buyers or to a bulk buyer intending to run a retail program
- If market conditions do not permit a retail condo sales program, the portfolio may be sold in bulk to private equity investors who will continue to operate them as rentals
AHC Advantage
Citi on Camelback features large units with condo-quality finishes in a beautiful, well-located setting. AHC inherited substantial HOA reserves that were undervalued by the market, which have since been invested to improve common area amenities. Recently renovated clubhouse and pool areas are now Class A-level and compare favorably with much newer product.
AHC principals have significant experience managing retail sales programs. To facilitate disposition, AHC has a designated broker onsite.