Venture on Marlette

Project Breakdown

Purchase Price:            $1,600,000

Renovation Budget:        $250,000

Acquistion/Closing Fees:  $105,000

Reserves                          $47,500

                            Total $2,002,500

Investment Breakdown

  % of Total Project Costs

  65%  Loan

  25-30%   Preferred Equity from Crowdfunding

  5-10%  Common Equity from Sponsor's Fund

Investors are purchasing preferred equity membership interests in Venture on Marlette, LLC,  which will in turn purchase and hold title to the 813 E Marlette Ave, Phoenix, AZ 85014. Over the 3 year hold period, the preferred equity is expected to yield 12% total annualized return, with an average of 5% of the total return coming from rents (paid quarterly) and the other 7% coming from capital gains when the property is sold.

In addition to this crowdfunding offering, Venture on Marlette LLC is taking on approx $1,300,000 in debt to complete the funds needed of $2mn.

Venture on Marlette is a 12-unit, two story apartment complex with large 2 bedroom and 3 bedroom residences. The property is located in an Up-and-Coming neighborhood along 7th Street in Midtown Phoenix. This area includes a host of new restaurants and entertainment including the Yard and Culinary Dropout, Pita Jungle, Old School, Spinato’s Pizza and AJ’s shopping center. Built in 1962 of brick exterior, decorative brick patterns throughout exterior, with a private entrance from the rear with covered parking.

Operated as an apartment building for many years, the property has suffered from deferred maintenance and drifted from it’s original design. We plan to modernize the original architectural elements of the property with the addition of an updated color palette, materials, and street facing mural to create a wonderful addition to the neighborhood.

Two-bedroom units

Neighborhood/Zip Code Average          $1,212/month

Current Venture on Marlette Rent          $950/month

                                                               $262 below neighborhood

Projected Rent for Marlette                    $1,360/month

Three-bedroom units

Neighborhood/Zip Code Average          $1,416/month

Current Venture on Marlette Rent          $1,085/month

                                                               $331 below neighborhood

Projected Rent for Marlette                    $1,465/month

Occupancy

For a growing MSA, much like the Phoenix MSA, a general rule-of-thumb is that occupancy should trend between 94 to 96% for equilibrium.

Average occupancy for both the submarket and neighborhood/zip code has been trending in the 95% range for the last several years.

With little in the construction pipeline, and the area’s continued population growth, occupancy rates should increase with rental rates correspondingly rising in both the near-to-mid term.

Sales Comparables

New Developement - Redevelopement Activity

ALTA Marlette adds a missing housing component to this area – luxury rental housing. This particular site is well suited for a luxury multifamily project, because it is surrounded by developed commercial and apartment uses and is designated on the City’s General Plan for high-density housing. Redevelopment of these infill and underutilized parcels will allow for a high-quality, desirable multifamily project that will inevitably spur further redevelopment activity in the area and one that is compatible with the wide spectrum of commercial retail uses, office buildings, restaurants, and apartments.

Alta Marlette

This type of new housing in appropriate locations expands diversity and provides upgraded residential living choices, which in turn supports the existing and new restaurant venues as well as other commercial retail shops, and encourages rejuvenation of older residential living.

We believe that a variety of living styles are a critical element in attaining the proper balance of land uses within each village and the overall City of Phoenix.

The proposed development will bring sophisticated, luxury rental living to this location and will serve as a catalyst to other positive opportunities for redevelopment of older retail and office uses in the area.

Park Central Mall Redevelopment

Commercial real estate firms Plaza Cos. and Holualoa Cos. purchased a majority part of Park Central Mall in midtown Phoenix.  According to Phoenix Business Journal.  The new owners plan to update/add the following features:

The Market: A pedestrian connection to Central Avenue with lots of shade.

The Goldwater Building: A large flexible office space in the building that once housed a department store by that name.

The Porch: More restaurants and bars.

The Hub: Space for entrepreneurs and creators.

The Lofts: Work spaces that celebrate the history of the property while incorporating modern amenities.

The Yard: Temperate outdoor area for work and play.

Plaza and Holualoa have picked the Richard+Bauer architecture firm and DPR Construction to help renovate and reinvent Park Central. Stan Shafer, COO of Holualoa Cos., said the owners want Park Central to become an economic engine for the midtown area. The renovations will likely not add additional height or density to the existing Park Central development but will instead renovate and modernize existing structures.

Creighton University to build $150M Phoenix Medical School next to Park Central Mall

Creighton University plans to build a $150 million medical school at Park Central Mall next to St. Joseph's Hospital and Medical Center in Phoenix.

Plans call for training 700 medical students in what will be two buildings totaling 300,000 square feet on the southeast corner of the mall property at Central Avenue and Catalina Drive.

Phase I will be a 150,000-square-foot building that will cost between $75 million and $100 million to develop, followed by a mirror image of a second 150,000-square-foot building at a later time as the school grows.

Creighton expects to break ground in spring 2019, said Dale Davenport, senior associate dean for Creighton University School of Medicine. He said the Phoenix campus is expected to welcome students beginning in July 2021.

Phase I of the project will include the construction of a 2,000-space parking structure that will cost $25 million to build and will be funded by bonds, said Christine Mackay, economic development director for the city of Phoenix.

Creighton University Medical School has been growing its presence in partnership with Dignity Health's St. Joseph's Hospital and Medical Center for more than a decade. Creighton's third- and fourth-year medical students do clinical rotations at the Phoenix hospital.

By 2016, the Jesuit Catholic medical school — based in Omaha, Nebraska — signed an affiliation agreement with Maricopa Integrated Health System and Dignity Health. That relationship solidified further when the three organizations created the Creighton University-Arizona Health Education Alliance to oversee graduate medical education programs for MIHS and St. Joseph's, as well as the program for District Medical Group, the physician partnership that works at MIHS.

Now 325 graduate medical education residents are under the alliance's umbrella, with 204 residents coming from MIHS and 111 from St. Joseph's. The goal is to have 700 to 800 students on campus. Creighton currently has 100 medical students in Phoenix.

Completed New Developments

240 Missouri

K Hovnanian Homes acquired this 2.47 acre property in 2015 for $5.51M with plans to develop 29 high-end townhomes on the site which was completed by 2017.  Featuring a highly desirable location within midtown Phoenix, AZ, 240 Missouri will offer three new home designs of 2- and 3-bedroom townhomes.

This upscale gated community will put you within minutes of excellent restaurants, shopping and public transportation.  All units have been sold starting in the mid $400’s.

200 East

Is an under construction residential subdivision consisting of 10-luxury, single family homes by Porchlight Homes at 2nd Street and Georgia Avenue in Phoenix. 

Uptown Plaza Shopping Center Redevelopment

The center, built in 1955 by Del Webb on the northeast corner of Camelback Road and Central Avenue, is being revamped by Phoenix-based Vintage Partners. Uptown Plaza is undergoing a wall-to-wall renovation dedicated to restoring this Mid-Century Modern gem to its former glory. Originally located just outside the city limits, this once distant shopping center is now considered part of Phoenix’s urban core, with the surrounding Windsor Square neighborhood recently ranked as one of the “best big city neighborhoods in America” by Money magazine. 

With completion expected in late 2016, the restored Uptown Plaza will once again serve as a bustling, brick-lined heartbeat for all of north-central Phoenix, and featuring the same vibrant mix of local, regional and national tenants that helped make this historic development such a success in previous decades.

Corner of 7th Street & Marlette Avenue

Crown on 7th

The $7.8 million Crown on 7th project was built at the former Crown Imports building between Missouri Avenue and Bethany Home Road.

Venture REI principal Dan Noma Jr. and real estate executives Buzz Gosnell and Niels Kreipke purchased the building in 2014 for $1.8 million and have spent $6 million on its redevelopment which opened at the end of 2015.

The Colony

The Colony, an adaptive reuse project by Western Vertical Holdings, several restaurants, a gastro pub among other tenants.  It is currently finishing construction near 7th Street and Missouri Avenue, just south of the popular eatery venue The Yard.

Western Vertical Holdings, led by Bob Agahi and David Sellers, is redeveloping a vacant 1950s building and constructing a smaller new one next to it to create 22,467 square feet of space at The Colony.

The Yard

What was once a motorcycle garage and dealership on 7th Street and Montebello Avenue is now a restaurant cluster known as the Yard.  The concept from restauranteur Sam Fox, the Yard opened on February 11, 2013 in north-central Phoenix. The 53,000-square-foot space is home to the Valley’s second Culinary Dropout gastropub; the other location is in Scottsdale.

The Yard boasts an open gathering space outside as well as $8 million courtyard was a product of Fox Restaurant Concepts and WDP Partners.

Pomo Pizzeria Napoletana | Cold Beer & Cheeseburgers | Pita Jungle

Across the street from Fox Restaurant Concepts, The Yard, and just a block northeast of Western Vertical Holding’s, The Colony, Western Vertical is developing another restaurant space in the Restaurant Row District, Pomo Pizzeria,

To Pomo’s south, Cold Beer & Cheeseburgers 7th Street location completed construction in March 2017 and just south of Cold Beer, Pita Jungle opened their largest restaurant to date at the NEC of 7th St and Missouri.

Venture on Marlette is located at the north-end of Phoenix’s North Central Submarket, often referred to as Phoenix Midtown . The submarket is comprised of four major neighborhood/districts:

1. Phoenix College/Melrose (85013 zip code)
2. The Yard/Cheery Lynn (85014 zip code)
3. Christown (85015 zip code)
4. North Central (85012 zip code)

North Central Phoenix, in particular along north 7th Street, has been undergoing remarkable rejuvenation with many new restaurant and retail venues. In 2016, more than 150 restaurants opened in greater Phoenix and the highest concentration of those was on 7th Street in this area.

In addition to the rich diversity of restaurants and retail shops, the property enjoys exceptional local and regional access due to its strategic location near 7th Street and approximately 1-½ miles west of the SR-51 (Piestewa Freeway) as well as bus routes that connect to the mass-transit line. Marlette’s ideal location and nearby freeway access also provides exceptional access to three of the largest employment corridors in the City including the Camelback Corridor, Midtown Phoenix, and Downtown Phoenix, which makes this area an ideal location for young professionals seeking to avoid long commutes to work and to live, eat, work and play in the same area.

Existing Housing

In the 85014 zip code there are 130 properties (10+ units in size) containing 6,788 units (or 31% of the entire multifamily housing stock for the submarket) with an average year built of 1968.

Looking at the property analysis table below, while there is a preponderance of small properties (5 to 19 units in size) in the area, they only represent, in total units, 11% of total housing stock.  In fact, 72% of all existing units are found in properties 50+ units in size built in 1980.

Under Construction

There is currently only one project under construction, Wood Partners’ Alta Marlette (across the street from Venture on Marlette) which is a midrise apartment community and features 229 units with expected delivery sometime in late 2019, early 2020.

From 2010 through September 2018, the neighborhood witnessed very little new development with only 114 new unit deliveries, all of which were affordable housing. 

Planned Development

There are currently only three (3) projects currently in the planning review process representing a total of 349 units. The largest of these planned new projects is Deco Communities, Cabana on 12th.  Under current entitlements, Deco could build up to 311 units. 

Valley Metro Light Rail

Valley Metro Rail is a public, nonprofit regional organization with five member cities – Phoenix, Tempe, Mesa, Glendale and Chandler. It is responsible for the development and operation of the region’s high-capacity transit system.

As one of the country’s fastest-growing metropolitan areas, the Valley of the Sun has a critical need for an expanded transit network. An additional 40 miles is in various phases of planning, design or construction. Light rail serves as an important link between communities. Thousands of riders use it to connect to work, school and entertainment. It stimulates economic growth and revitalization for the region. The future of transit in the Valley is the future of the Valley itself.

Gilbert Road Extension: 2019 Anticipated Completion

Northwest Extension Phase II: 2023 Anticipated Completion

Capitol/I-10 West Phase I: 2023 Anticipated Completion

South Central Extension: 2023 Anticipated Completion

Capitol/I-10 West Phase II: 2030 Anticipated Completion

Medical Corridor

Dignity Health St. Joseph’s Hospital & Medical Center

Dignity Health St. Joseph's Hospital and Medical Center is a hospital in Phoenix, Arizona, USA, operated by Dignity Health. St. Joseph’s is a 607 bed, not-for-profit hospital that provides a wide range of health, social and support services, with special advocacy for the poor and under served.

It is home to the Barrow Neurological Institute, the world's largest dedicated neurosurgical center and a renowned leader in neurosurgical training, research, and patient care.

St. Joseph’s is a center for tertiary care, medical education and research. It includes the Barrow Neurological Institute, the Heart & Lung Institute, and a Level I Trauma Center verified by the American College of Surgeons. The hospital is also a center for maternity care, orthopedics, oncology and many other medical services.

University of Arizona Cancer Center (UACC) @ St. Joseph’s

In 2011, St. Joseph’s Hospital and The University of Arizona Cancer Center, the only National Cancer Institute-designated comprehensive cancer center headquartered in Arizona, formed an innovative collaboration to offer unparalleled cancer care in Phoenix.

This unique affiliation uses the strengths of both organizations to transform cancer care. It also provides invaluable opportunities for cancer patients, advocates, health practitioners and students to work together to create solutions to issues in oncology.

The UACC @ St. Joseph’s works in conjunction with UACC at Phoenix Biomedical Campus (PBC).  UACC at PBC is housed in a 220,000-square-foot, five-story, $100 million facility offers comprehensive cancer services, including: infusion, radiation oncology, diagnostic imaging, endoscopic/interventional radiology, a women’s center, specialized cancer clinics, patient wellness and support services, a prevention/executive health clinic, clinical lab space and other related support areas. The Center opened in the fall of 2015.

Phoenix Biomedical Campus

Located in the heart of Downtown Phoenix, the PBC is the premier and dynamic environment for research activities. It contains the highest concentration of research scientists and complementary research professionals in the region providing firms with unprecedented opportunities for growth and collaborative efforts with the Translational Genomics Research Institute (TGen), International Genomics Consortium (IGC), National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), University of Arizona College of Medicine - Phoenix, University of Arizona College of Pharmacy, VisionGate and Barrow Neurological Institute.

Anchored by the IGC/TGen headquarters and the Arizona Biomedical Collaborate (ABC), 30 acres of City-owned land near 5th Street and Van Buren is being developed as the hub for Arizona’s biomedical efforts.  In October 2012, the Biomedical Campus welcomed the Health Sciences Education Building.  The 268,000 SF building is located near the NWC of 7th Street and Van Buren and provides lecture and lab space for the 301 students currently enrolled at the University of Arizona College of Medicine-Phoenix who directly employs 567 full- and part-time workers.  The UA’s Eller College of Management moved to the Biomedical Campus and construction began in October 2014 on the ten-story $136 million Biosciences Partnership Building and a 1,000 space-parking garage.  The 245,000 SF facility will be the tallest building on the Biomedical Campus.

Development continues at the Phoenix Biomedical Campus with the construction of the UA Cancer Center (now Banner-University, although the Banner-UA merger did not include the Cancer Center) with outpatient clinic and research center to be located on the north side of Fillmore between 5th and 7th Street.  The $100 million Cancer Center, which opened in 2015, comprises 230,000 SF and is expected to have up to 60,000 patient visits per year.

According to a recent study commissioned by University of Arizona, the economic impact of the Phoenix Biomedical Campus is over $1.3 billion every year, and has either directly or indirectly created over 9,400 jobs in Arizona, specifically in downtown Phoenix. To date, the campus has been developed with approximately 1.5 million square feet of the anticipated 6 million square feet at build out.

ASU Downtown

ASU opened its Downtown Campus in 2006 with the College of Nursing and Healthcare Innovation, the University College, the College of Public Programs, School of Criminology and the Walter Cronkite School of Journalism.  The Sandra Day O’Connor School of Law relocated to Downtown to the new ASU Center for Law & Society in 2016.  Currently, 12,000 students attend class at the ASU Downtown Campus with 15,000 students projected by 2020.

Recent growth continues with the world-renowned Thunderbird School of Global Management relocating Downtown in Fall 2018.  ASU, in partnership with Wexford Science and Technology, will build an additional 1.5 million square feet of biomedical space over the next several years.  The first 200,000 square feet will deliver at the end of 2019.

Arizona State University’s Downtown Phoenix campus is home to the Walter Cronkite School of Journalism and Mass Communication, the College of Health Solutions, the College of Nursing and Health Innovation, the College of Public Programs and the School of Letters and Sciences. The Mary Lou Fulton Teacher’s College and University College also have a presence.

The campus’ proximity to downtown Phoenix’s thriving business district puts journalism students close to internships at major media organizations such as The Arizona Republic, the state’s largest newspaper, and 12 News, KPNX-TV, the Phoenix NBC affiliate, located just steps from campus. Almost as close are the Greater Phoenix Convention & Visitors Bureau and many hotels, where tourism majors hone their skills. Public programs majors intern at state and city agencies, such as the Arizona Department of Education and the Phoenix housing department, as well as various nonprofits. City Hall, the state Legislature, the Arizona Supreme Court, municipal, county and federal courts and Phoenix historical sites are just a few minutes away, as is the Phoenix Biomedical Campus, a statewide hub for biomedical research.

The downtown campus boasts 100-plus downtown student organizations ranging from student government to Greek life, and students enjoy campus events such as watching the Super Bowl on a 16-by-9-foot big-screen, participating in local service opportunities and taking the light rail to Sun Devil Stadium to watch ASU athletics.