Harbor Group International is continuing its expansion into the western U.S. with a multifamily acquisition in Scottsdale, Ariz. The real estate investment firm has acquired Luxe Scottsdale for $65.5 million. According to Yardi Matrix data, HGI purchased the property from PASSCO Real Estate with the help of a $42.8 million loan from New York Community Bank.
Built in 2015, the 218-unit Luxe Scottsdale offers one-, two- and three-bedroom units with amenities including a swimming pool, a fitness center, a pet spa, a business center, grilling areas and detached garages. According to Yardi Matrix data, the property is 98.6 percent occupied with tenants paying an average rent of $1,532. The four-story community, located at 8444 E. Indian School Road, is also near Arizona’s Loop 101 freeway and roughly 2 miles away from Old Town Scottsdale, a nearby retail district with shopping centers, restaurants and museums.
As part of its value-add strategy, HGI will spend $418,000 to renovate the property by modernizing the common areas and installing Nest thermostats in the units.
Greg Heller, HGI’s senior vice president of acquisitions, said in a prepared statement they expect high occupancies and sustained rent growth with Luxe Scottsdale due to the area’s strong economic fundamentals and employment drivers.
INVESTING IN THE WEST
Prior to the Luxe Scottsdale purchase, HGI acquired a 36-property portfolio that spans 12 cities and eight states. The company paid $1.8 billion to Aragon Holdings, who was selling off its entire multifamily portfolio that was accumulated over the last decade. Of the 36 properties, the portfolio also included some apartments in Phoenix.
Elsewhere in the state, HGI also owns the Arcadia 4127 apartments in Phoenix and the Avia McCormick Ranch in Scottsdale. The purchases were part of the company’s plans to expand into the western U.S. market, where it also owns an office tower in San Francisco and other multifamily communities in Southern California.