Institutional Property Advisors Brokers Sale and Arranges Financing for $94.5 Million Southeast Phoenix Multifamily Asset
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Insights
The sale of Alta Chandler at The Park for $94.5 million underscores the robust demand for multifamily properties in strategic locations. With a per-unit price of $324,742, this transaction is indicative of the premium investors are willing to pay for assets in affluent demographics with high occupancy rates. The property's proximity to major employers and retail spaces adds to its value proposition, potentially offering stable rental income streams for the new owner, Olympus Property.
From an investment perspective, the acquisition financing of $52 million arranged by IPA Capital Markets, particularly with eight years of interest-only terms, may point towards favorable lending conditions in the real estate market. This could suggest a continued appetite for multifamily assets among lenders, as well as confidence in the economic stability of regions like Chandler, Arizona. However, investors should monitor market trends, as shifts in interest rates or employment patterns in the region could affect the long-term profitability of such investments.
Alta Chandler at The Park's performance, with an average of 24 net leases per month since its opening, is a strong indicator of the property's market fit. The high-tech workforce within a 30-minute drive and the presence of significant employers like Intel and Northrop Grumman enhance the location's appeal. The tailored resident profile of high-earning professionals likely ensures a lower risk of default and vacancies, which is important for sustained revenue.
Additionally, the emphasis on work-from-home friendly spaces within the units reflects a growing trend in residential real estate to accommodate the changing needs of professionals. This could be a differentiating factor that maintains high occupancy levels and justifies the premium price per unit. Investors should consider such demographic and lifestyle trends when evaluating similar real estate opportunities.
The transaction details provide a glimpse into the valuation metrics within the multifamily real estate segment. A price of $94.5 million for a 291-unit property sets a benchmark for similar assets in the area. Investors analyzing this deal would do well to compare the price per unit against other recent transactions to gauge market sentiment and pricing trends.
Furthermore, the structured financing deal, with a substantial interest-only period, could impact cash flow management for the buyer. It allows for potentially higher initial returns on investment, which could be attractive to both the buyer and potential future investors. However, the long-term sustainability of such financial structures depends on the property's ability to generate consistent rental income and the broader economic environment influencing real estate values.
“Alta Chandler at The Park’s affluent demographic anchored a robust absorption story, obtaining an average of 24 net leases per month after opening in January 2023,” said Steve Gebing, IPA executive managing director. “The resident profile of high-earning professionals was drawn by the property’s physical characteristics and direct proximity to Price Corridor, Arizona’s most innovative economic hub.” Gebing and IPA executive managing director Cliff David represented the seller, Wood Partners, and procured the buyer, Olympus Property. Brian Eisendrath, Cameron Chalfant, Jake Vitta and Jesse Zarouk of IPA Capital Markets arranged eight years of interest-only financing.
Located within walking distance of The Park shopping center along Chandler Boulevard, the property is a 30-minute drive from the majority of Phoenix MSA’s high-tech workforce and under two miles from the Price Corridor. Nearby employers include Intel, Northrop Grumman, Wells Fargo, Bank of America, and Microchip Technology.
Alta Chandler at The Park’s apartment interiors have expansive, open-concept floor plans with nine-foot ceilings, laundry closets with full-size or stackable washers and dryers, extended primary bedrooms with dedicated work-from-home space, and separate den or loft quarters. Select units have direct access garages. The property has an open-concept leasing office and clubhouse, a convenience market, sky lounge, fitness center, and a private, multi-purpose fitness room.
About Institutional Property Advisors (IPA)
Institutional Property Advisors (IPA) is a division of Marcus & Millichap (NYSE: MMI), a leading commercial real estate services firm in
About IPA Capital Markets
IPA Capital Markets is a division of Marcus & Millichap (NYSE: MMI). IPA Capital Markets provides major private and institutional clients with commercial real estate capital markets financing solutions, including debt, mezzanine financing, preferred and joint venture equity, and sponsor equity. For more information, please visit institutionalpropertyadvisors.com/capital-markets.
About Marcus & Millichap, Inc. (NYSE: MMI)
Marcus & Millichap, Inc. is a leading brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services with offices throughout
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314773135/en/
Gina Relva, VP of Public Relations
Gina.Relva@MarcusMillichap.com
Source: Marcus & Millichap
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