Investors Hot To Buy Phoenix Multifamily
There's nothing slowing down Phoenix multifamily. More than 6,200 units delivered last year, and this year the market will see 7,100 new units, based on permitting and projects underway, according to Marcus & Millichap data. Even so, rents are projected to rise, and vacancies stay about the same, especially in the hottest submarkets.
That dynamic is continuing to attract investors. Recently Oregon-based Saltzman Properties snapped up the 202-unit Bellagio Apartments in Scottsdale for $36M. “The sale demonstrates the robust activity we are seeing throughout the market,” says Berkadia senior managing director Mark Forrester, who facilitated the deal. The buyer is planning renovations of all units within the property, coming after the previous owner, Bellagio Owner LLC, partially upgraded the interior units and public areas.
“Scottsdale offers value-add opportunities, and the buyer was seeking a high-quality property with upgrade potential through renovation,” adds Mark. Built in 1995, the property is at 5635 East Bell Rd. Besides Mark, colleagues Ric Holway, Dan Cheyne and Tom Wolff of the Phoenix office helped facilitate the sale.
In Glendale, the 260-unit Sonoma Terrace apartments at 5220 W Northern Ave traded recently for more than $15M. The transaction points to a strengthening multifamily market in the West Valley, says Colliers International EVP Trevor Koskovich. Trevor, along with colleagues Bill Hahn and Jeff Sherman (all pictured above), repped both the buyer, Mentor Properties of Scottsdale, and the seller of the late-'70s vintage property, Phoenix-based 3rd Ave Investments.
This marks Mentor Properties' seventh multifamily acquisition in metro Phoenix since early 2015. “Last year, West Valley vacancies ticked lower about 5.5%, while rents increased by 5% to 6%,” Trevor points out. “At the same time, investment activity and prices have been on the rise, a trend we expect to continue through 2016.”