AEW Pays $66M for Phoenix-Area BTR Asset
The community had an occupancy rate of 97 percent at closing.
AEW Capital Management has acquired The Bungalows at San Tan Village, a 159-unit build-to-rent property in Gilbert, Ariz., from Cavan Cos. The asset traded for $66.1 million, or $415,723 per home. The investment’s cap rate was 4.9 percent, according to the buyer.
Completed in 2024, The Bungalows at San Tan Village comprises one- to three-bedroom single-story houses ranging from 676 to 1,355 square feet. The property was 97 percent occupied at closing.
Units feature backyards, 10-foot ceilings and smart-home technology, while the community amenities include a gym, swimming pool and clubhouse, among others.
Located on nearly 15 acres at 2120 E. Ray Road, the community is 29 miles southeast of downtown Phoenix. Loop 202 and several parks are within walking distance, while a shopping center measuring more than 800,000 square feet is within 1 mile of the asset.
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One of the main reasons for the investment was the Bungalows at San Tan Village’s location along a growing commercial corridor, AEW mentioned in a company statement. The firm seeks to increase and diversify its exposure to the BTR sector and aims to pursue more such opportunities.
Institutional investors pay top dollar for Phoenix BTR
Against the backdrop of a significant delta in favor of renting as opposed to owning a home—$1,255 cheaper to rent in Phoenix as of December 2024, according to a Yardi Matrix research bulletin—demand remains strong. Institutional interest in the sector likewise keeps growing.
In Phoenix, investor appetite for BTR assets has more room to grow, however, as just one BTR asset traded in the metro during the first five months of this year. J.P. Morgan Asset Management paid $99.8 million for Bella Encanta, a 212-unit BTR property in Mesa, Ariz., the data provider shows. Bela Flor Development sold that property for $451.650 per unit, nearly doubling the average price of $263,236 recorded during the same period last year, according to the same source.
