Arizona Companies Form JV to Develop Multifamily
- Feb 02, 2012
Phoenix—Scottsdale-based MC Cos. and Phoenix-based Clark-Wayland Builders LC have formed a joint venture to develop apartment properties in both Phoenix and Tucson. The new entity will develop properties both for its own account and for third parties.
Phoenix has been one of the epicenters of the housing crisis in recent years, but the outlook for apartment properties is good, according to investment specialist Marcus & Millichap. During 2012, Phoenix-area employment is predicted to spike by 2.1 percent, or 37,000 jobs, the strongest growth in four years. Only 1,000 or so apartment units will come on line 2012, thus putting upward pressure on rents. Marcus & Millichap predicts that this year asking rents will increase 2.9 percent and effective rents will do even better, up 4.4 percent.
“While the Tucson and Phoenix economies have suffered for the past four years, positive employment and population growth have returned and the economy is recovering, vacancy rates are dropping and rents are increasing,” Ross McCallister, principle/owner of MC Cos., tells MHN. “Since the housing market hasn’t recovered, construction costs have declined dramatically and there’s availability of labor. These factors, along with historically low interest rates, make new development feasible.”
Neither of the partners is a stranger to apartment development in the area. Between the two of them, they have already built over 25,000 multifamily units in Arizona, and MC Cos. currently owns and manages about 6,000 units in Arizona, Oklahoma and Texas. With Clark-Wayland as a partner, MC Cos. plans to expand its development capabilities within Arizona to include garden-style, mid- and high-rise multifamily construction.
Currently, MC Cos. has two apartment properties under way in Tucson, the Place at Canyon Ridge, with 116 units, and the 208-unit Place at Creekside. Both projects are slated for completion in mid-2012. As a construction specialist, Clark-Wayland’s focus since its founding in the 1970s has mainly been apartments and other multifamily properties.