An infusion of investment capital has breathed new life into pools at several Arizona apartment complexes and multifamily properties.
Investors are buying up these properties with greater frequency of late, pouring tens of thousands of dollars into major renovations and all types of repair work, including cracked paint and leaking pipes.
“A lot of the old owners had essentially given up on these properties,” said Brian Morris, owner of We Fix Ugly Pools in Phoenix, “but these new firms clearly have a vested interest in raising their value.”
Arizona’s major metropolitan areas saw a big boom in construction throughout the early 2000s. But some of those newer structures fell into disrepair or foreclosure during the economic downturn.
This year, however, individual investors and private equity firms alike have been buying up an increasing number of properties in cities such as Phoenix and Tucson; even out-of-state firms have stepped up investment in the region.
“I’m getting more and more calls for renovation jobs on these sites,” Morris said. “When I ask where these clients are from, a lot of them say California and Chicago.”
While real estate agents cite various causes for this influx of investment capital, private-sector job growth and bottomed-out pricing are the most influential factors.
And it isn’t just multifamily sites that are attracting investor attention. Experts agree that Phoenix’s market for single-family homes and retail properties has also become increasingly competitive over the past 12 months.
“A couple of years ago I was telling people, ‘Now’s the time to buy,’ but hardly anyone seemed to be listening,” said Donna Irby, a real estate agent at HomeSmart International in Phoenix.
“All of a sudden, though, it’s like the word’s gotten out,” she added. “Properties are getting three or more offers in the first month.”
Meanwhile, many apartment complexes and multifamily facilities are undergoing beautification projects such as repainting and landscaping; rundown pools also are being transformed into attractive leisure areas.
In fact, the renewed activity has resulted in a sharp uptick in renovation revenue over the past several months, according to several Arizona pool construction firms.
“Some of them are tearing up the whole pool and starting from scratch,” said Michael Love, owner of Love Pool Care in Phoenix. “But others are just trying to restore the property to its original look.”
Even so, pool professionals note that some investors seem unprepared for the expense of bringing a commercial pool up to code — for instance, installing an unblockable main drain in accordance with the federal Virginia Graeme Baker Pool and Spa Safety Act.
“So some of them have just ignored the code and failed to do anything to bring the pool into compliance,” Love said. “For others, though, we’ve scaled back our bid to incorporate just the bare-bones upgrades they need in order to operate legally.”