Mesa sees 6 resident complex deals totaling $334M

Jun. 15—Five Mesa apartment complexes and a condo community have traded hands in the last three weeks in deals totaling $334 million.

And on the heels on those deals, a nationwide rental listing firm said that while trends in apartment vacancies and rent indicate that more empty apartments are entering the market and rent increases are slowing — for now.

The biggest deal involved the $142-million sale of the 460-unit Indian Springs Apartments on South Stewart, near Southern Avenue and Alma School Road, by California-based Open Path Investments to Rise48 Equity of Phoenix, according to Valley real estate tracker

Built in 1985, the complex consists of 25 buildings, three pools and basketball/tennis court, three laundromats and a club house on just under 10 acres.

The sale equaled a per-square-foot price of $723 and a per-unit price of $308,685, vizzda said.

Another big transaction also saw Rise48 Equity buying the 288-unit The Nolan on W. Broadway Road for $92 million. Northmarq Phoenix said its investment sales team 's investment sales and debt and equity teams represented the buyer.

The sale price was more than three times greater than the $30 million that seller Benedict Canyon Equities paid for the 36-year-old complex in 2018,

The gated complex comprises 18 two-story residential buildings, three pools and a clubhouse on 12.3 acres. Vizzda said the sale broke down to a per-unit cost of $319,444.

Rise48 Equity plans to renovate the interiors of all the units at The Nolan, Northmarq said in a release.

"Rise48 has purchased over 1,000 multifamily units in Arizona since the start of 2022, and over $1 billion in transactions since 2019," said Brandon Harrington, a member of Northmarq's debt and equity team. "They continue to seek out well-positioned communities with value-add opportunities through improvements to the individual units and the complex amenities."

A third mega-deal, recorded last week, involved Starpointe Communities' sale of the 244-unit Maxwell at Cooley Station on S. Power Road near Williams Field Road to Robert J. Ctvrtilk & Apartment Management Consultants of Utah, which on its website says manages more than 122,000 units across 28 states.

Built in 2021 on 8.4 acres, the gated complex comprises 16 one- and three-story buildings housing mostly studios and one-bedroom apartments and a 2,732-square-foot clubhouse. The sale price equaled $344,262 per apartment.

Two of the three other sales, while not nearly as large, showed their sellers more than doubled what they paid for the complexes only a few years ago.

Keystone National Group of San Ramon, California, sold the Mountain View Condominiums on E. Brown Road near Mesa Drive to a California man for $7.8 million — nearly three times the $2.6 million the seller paid for the complex in 2016, vizzda data showed. The sale represented a per-unit cost of $28,333.

Built in 1973, the complex has three buildings with an almost even mix of one- and two-bedroom units.

Also a California woman paid $4 million to buy a 16-unit complex on North Date near Counctry Club Drive and McKellips Road. Built in 1973 and expanded in 1984, the ciomplex comprises four two-story buildings, according to vizzda.

The smallest of the three deals involved the purchase of an 18-unit complex on N. Williams by a Seattle man for $3.6 million — twice what a Utah man paid for it four years ago.

Located near University Drive and Gilbert Road, the complex was built in 1968 and consists of three two-story buildings and a laundry facility. The sale price represent a per-unit price of $200,000, vizzda said.

The deals came as a nationwide listing service of millions of apartments nationwide said vacancy rates were easing and the surge in rent was slowing down.

"In Phoenix, for example, rents have increased by just 2 percent over the past six months, during which time the city's vacancy index has gradually eased back to 5 percent, close to where it was before the onset of the pandemic," said last week.

"After experiencing significant disruption over the past two years, the rental market has begun to gradually stabilize," it continued. "The markets that saw large spikes in vacancies in the early pandemic have since seen renters return. Meanwhile, demand has started to level off in the nation's hottest markets. That said, the availability of vacant units nationally remains notably constrained compared to the pre-pandemic norm.

"Even if our national vacancy index continues its gradual easing, it won't surpass 6 percent until well into next year on its current trajectory."

Apartment list also said that the rapid cooling of the housing market may have an adverse impact on rental units' supply and, consequently, rates.

"There are factors at play which could present headwinds to that easing," it said. "Although we're now at the start of the busy season for the rental market, when the bulk of moving activity normally takes place, rapidly rising rents may incentivize many renters to stay put and renew existing leases rather than looking for new ones.

"At the same time, the recent spike in mortgage rates has created yet another barrier to a historically difficult for-sale market, potentially sidelining would-be homebuyers and keeping them in the rental market. Given these factors, it's possible that the easing of our vacancy index could level off in the coming months."