Phoenix Multifamily Market Heating Up

By Dees Stribling, Contributing Editor

Phoenix—In two separate transactions, Colliers International has overseen the sale of two multifamily properties in metro Phoenix with a combined value of $5.475 million. In both deals, Bill Hahn, Jeffrey Sherman and Trevor Koskovich of Colliers’ Phoenix office represented the buyers and sellers.

In the larger of the two deals, Anchorage-based Calista Real Estate L.L.C. acquired 25 units in the 26-unit Metro 1 Townhomes for $3.375 million, or $135,000 per unit. The lender-owned property was sold by IMH of Scottsdale, Ariz., in a transaction structured with 22 units acquired as fee simple and three units acquired in the form of notes secured by the individual units (the property was originally built as for-sale residential).

In the smaller of the deals, California Capital Real Estate Advisors of Pasadena, Calif., acquired Casa Nueva, a 64-unit apartment property for $2.1 million, or about $32,800 per unit. The seller was ATC Realty One L.L.C., of Rancho Bernardo, Calif.

According to Collier’s Jeffrey Sherman, buyers are increasingly pursuing multifamily opportunities in the metro Phoenix market for a variety of reasons. “Price points are down significantly from historical highs, particularly in Class B and C properties,” he tells MHN. “When looking at today’s recovering rates and sales prices compared to the rates and sales prices during the peak years of 2006 and 2007, there are definite bargains for investors. This is particularly true when taking into account both the available sale inventory and looking at long-term employment growth predictions for metro Phoenix.”

Specifically, Sherman adds, Phoenix is expected to see markedly high employment trends in the 20- to 30- year-old age group compared to other age ranges in the next five years. Since that age group rents apartments more than any other, that bodes well for the apartment sector in metro Phoenix.

“Also, multifamily was not overbuilt during the market’s peak years and does not have the same oversupply issues as other product types,” Sherman says. “Moreover, financing options are growing for metro Phoenix multifamily, which has unlocked a new cadre of investors searching for healthy going in returns. We are poised to see more of this type of investor in 2012.”