KB Investment Acquires Tempe Apartments
Mesa West Capital provided a $108 million loan for the purchase of Skywater at Town Lake.
KB Investment Development Co. is expanding its Arizona multifamily presence through the purchase of a 328-unit community with the help of a $108 million acquisition loan. CBRE’s Rocco Mandala arranged the five-year floating rate loan, which was provided by Mesa West Capital and will be used to acquire Skywater at Town Lake in Tempe, Ariz.
The community was built in 2015 and has its units spread throughout five four-story elevator buildings. Skywater at Town Lake offers studio, one-, two- and three-bedroom units ranging from 632 to 1,342 square feet. The units were built with washer and dryers, patios and ceiling fans, but select units also have walk-in closets. The community’s amenities include a pool, resident clubhouse, outdoor kitchen, fitness center, storage room, coffee shop, underground parking and EV charging stations.
Located at 601 W. Rio Salado Parkway, Skywater at Town Lake is within walking distance to the Mill Avenue District in downtown Tempe that offers several retail, restaurant and nightlife options. The community is also less than a mile away from Arizona State University and approximately 10 miles away from downtown Phoenix.
Skywater at Town Lake was 96.6 percent occupied at closing. According to Yardi Matrix data, the previous owner is Heitman, who acquired the community in 2015 for $94.2 million.
North of Tempe, in Scottsdale, Embrey Partners is developing The Quincy at Kierland, a 266-unit community that started construction last year.
Expanding Into Arizona
Brian Hirsh, vice president at Mesa West who led the origination team, said in prepared remarks that the Tempe market’s rent growth is increasing at a historic pace while the vacancy rates are dropping to the lowest level in a decade. He added in his prepared remarks that Tempe will also continue seeing a strong demand for housing since it’s located near major employers and ASU.
While KB Investment Development Co. has a large chunk of its multifamily portfolio in California, the company began making significant investments into Arizona submarkets around 2015. The majority of its Arizona portfolio comprises Phoenix properties, but the company also has a couple of Mesa, Ariz., communities. More recently in May, the company acquired a 280-unit luxury community in Phoenix.