300-Unit Multifamily Acquisition - Phoenix, AZ
Brixton Capital has been awarded the acquisition of the Alta Warehouse apartment complex in Phoenix, AZ for $82 million / 273K per door / $290 PSF.
Alta Warehouse is a 300-unit, 4-story, elevator-served apartment community in the Warehouse District Submarket in Downtown Phoenix, AZ. Developed by Wood Partners and completed in 2023, Alta Warehouse is ±82.3% occupied and ±92% leased.
The key reasons why we believe this opportunity is particularly attractive are below:
1) Discount to Replacement Cost: It’s a unique opportunity to acquire a newly built, Class A multifamily property at a price that is ±15% to 20% below today’s replacement cost. New construction in Phoenix for a comparable property will cost a developer between $320,000 and $350,000
2) Affordability: The Property's market rents are set at $2.05 PSF, which stands in contrast to the higher range of $2.50-$3.00 PSF on 900-950 SF units observed in Downtown Phoenix’s Urban Core.
3) Robust Lease Up: Alta Warehouse has averaged 21 units leased per month during the preceding 12 months (from July 2022 to June 2023). The property demonstrates a strong demand, evident by its appeal to well-educated households meeting the required 3.0x rent-to-income ratio.
4) Discount to Recent Sales: At the acquisition, the basis is $273K per door. Our assumed exit price is $383K per door at the end of the five-year hold period. A comparable property The Met at 3rd and Fillmore, sold in July 2022 for $414,000 door. Another comparable property, Arts District, sold for $508k per door in May 2022.
5) Getting into the Submarket Early: Phoenix is actively revitalizing its Warehouse District, aiming to create a dynamic mixed-use area. The district's projects focus on adaptive reuse, urban infill, and the development of modern workspaces, driving its increasing popularity. Its appeal lies in attracting a diverse range of businesses, including technology firms, startups, creative enterprises, and entrepreneurs.
We anticipate closing this deal in October, so please let me know if this interests you or have any questions.
Brixton Capital (“Brixton”), is a privately held commercial real estate investment company headquartered in Solana Beach, CA. With an unprecedented track record of successful real estate investing spanning four decades, over 900 properties representing $10 billion of asset value, and virtually zero losses, Brixton and its principals have consistently achieved outstanding returns across multiple real estate cycles.
Brixton was officially formed in 2012 as the opportunistic real estate investment vehicle of the Marc Brutten family office, which has been opportunistically investing for many decades.