02 Feb More of the widely popular build-to-rent units are coming to south Phoenix
Jan 28, 2021
Build to rent hybrid models that combine the best of single-family homes with apartment rentals are taking the country by storm.
A Scottsdale multifamily investor is in the midst of a giant pivot as it buys land to build more single-family hybrid rental communities.
With two projects already under construction near South Mountain, Avenue North LLC is working on two more projects in Phoenix and another in Las Vegas.
Avenue North is not alone in jumping on this wildly popular build-to-rent concept that combines the luxuries of single-family homes built within a rental community — complete with their own backyards.
Colliers International has tracked 22 of these build-to-rent projects representing more than 3,800 units that are currently under construction.
This is adding to 3,750 units that currently exist in metro Phoenix, largely thanks to two pioneers that are making the concept so popular among developers — Phoenix-based NexMetro Communities LLC and Mesa-based Christopher Todd Communities.
“From a developer/investor perspective, these projects not only performed well pre-Covid but have performed amazingly well in the post-Covid world with current rents averaging close to $1,650 a month, up 23% since the first quarter of 2018,” said Thomas Brophy, national director of research and analytics for Colliers.
Founded in 2011, Avenue North has two build-to-rent projects under construction near South Mountain, with development costs for each project totaling around $17 million.
Ryan Hartman, chief vision officer for Avenue North, said the 85-unit project at 16th Street and Baseline Road should be completed by the second quarter, while the other 80-unit community two blocks away on 18th Street should be completed by summer 2022.
Plans call for investing $85 million for an 80-unit rental community on 7.5 acres at Seventh Street and Baseline that will begin construction during the fourth quarter of this year and 240 units on 22 acres at 36th Street and Southern Avenue on for-sale townhomes that will break ground during the second quarter of 2022.
Hartman said he’s also working in partnership with Scottsdale-based Harvard Investments Inc. to build 165 rental units on 12 acres in Las Vegas. That $40 million project is expected to break ground in March.
Avenue North has been selling off its existing traditional apartment units, divesting 820 units last year.
“We divested $100 million of multifamily properties in 2020 in Arizona, Nevada, and Colorado and are actively pursuing land for additional build for rent, as well as value-add multifamily,” Hartman said.