A basis-driven Tempe acquisition bought materially below replacement cost, with a $1M+ renovation program underway and day-one cash flow to investors.
The property
Red Sea Grove is a 39-unit garden-style community in Tempe, Arizona, minutes from Arizona State University and the Tempe employment corridor. The property was acquired for $6.15 million, materially below replacement cost for the submarket.
The business plan
This is an operational value-add: more than $1 million of capital improvements were planned for the third quarter of 2026, including unit interiors, common areas, and exterior work, with a lease trade-out schedule underwritten flat in a high-inventory market. The property was structured to distribute cash flow from day one while the renovation program runs.
Our role
Direct Commercial Acquisitions serves as asset manager, operator, and capital manager for the property. The renovation program and lease-up are tracked weekly against plan through our internal asset-management reporting.
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