Phoenix Upswing Lures Investor

Snapping up Parkway Properties' Mesa Corporate Center recently wasn't enough for California-based Buchanan Street Partners. Now it's further pumping up its Phoenix presence, this time with a multifamily buy. (Phoenix, like caffeine and The Walking Dead, is increasingly addictive.)

Buchanan Street Partners just bought Vue Park West (formerly Alta Park West), a 260-unit luxury apartment complex in Peoria, from a JV between Wood Partners and Boston Capital Real Estate Partners for over $30M. Buchanan's Bob Dougherty tells us Phoenix is a cyclical market that's now poised for a strong upswing, especially with employment coming back. (You always want to jump on the rocket on the way up.)

While apartments have been a hot commodity for investors, even in Phoenix, Bob says the rents on properties in the West Valley are still low enough in many submarkets that it prevents competing developers from justifying building a new project. (West Vue has units going for about $850/month.) “We have kind of an economic barrier to entry.”

While the Vue is the second apartment property acquired by Buchanan in Phoenix, it's far from one of its first real estate holdings here. In addition to buying the 106k SF Mesa Corporate Center (above) for over $13M, it bought The Carlson, a 500k SF flex office project, last September for $53M. He says he hopes to do another two or three deals here by next year; it's seeking both apartments and office buildings offering lower-than-market rents in which Buchanan can create more value with better leasing and management.

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