Redwood Capital Enters Phoenix with $118M Buy
- Jul 15, 2019
In its initial foray into the Phoenix, Ariz. market, Chicago-based Redwood Capital Group has acquired a Class A apartment community in the city’s Scottsdale submarket. That five-story property, Carter, was completed last year and features 365 luxury apartments.
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Centrally located at 3300 N. Scottsdale Road, Carter is situated within 2 miles of more than 200 retail stores and 140 restaurants located along the Old Town Scottsdale corridor and in the city’s entertainment district.
According to Yardi Matrix data, Redwood Capital Group acquired the rental community from JLB Partners for $117.8 million, which reflects a per unit sale price of $322,740. The transaction was subject to a $64.8 million permanent loan held by Metropolitan Life Insurance Co.
The asset represents the second recent acquisition for Redwood Capital Group, the other having been the purchase of a Charlotte, N.C. property.
“Phoenix was a new market for Redwood; the company had no exposure to Phoenix,” Redwood Vice President of Acquisitions Field Stern told Multi-Housing News. “We’d capitalized the acquisition with a major institutional partner.”
The company entered the market with its largest transaction closed to date, so secure and control was the biggest obstacle in buying this property, according to Stern.
Redwood leveraged the relationships it already had with the broker and seller, Stern added. “We intentionally visited the property four separate times during the marketing period, just to really signify to the broker we were committed from the start,” he noted. “And then since it was a new market to us, we did everything we normally do in our existing markets, and became an expert on not only the property but the overall location.”
Carter features three elevators that serve all residents. They provide direct access to a structured parking garage. Amenities include an outdoor fireplace with overhead lighting and dining areas. Apartments have granite or quartz countertops, kitchen islands, stainless steel appliances, single-basin undermount sinks and oversized windows.
“The location is truly walkable to Old Town Scottsdale,” Stern said. “We believe as the downtown Scottsdale corridor gentrifies and expands, it will grow south and we are right in the path of that growth.”