FOUNTAIN HILLS, AZ - 29th Street Capital (29SC), a privately-held real estate investment and advisory firm, in conjunction with Clear Sky Capital, has acquired Ridge View Apartments, a 150-unit apartment complex in Fountain Hills, Arizona. 29SC’s strategy is to invest $810,000 worth of renovations to significantly upgrade the interiors and to enhance the exteriors of the property.
“This is the fifth acquisition we have made in the Phoenix/Scottsdale market in just over one year, with another property under contract in the East Valley, closing later this quarter,” said Dusty Eddy, 29SC’s Vice President of Acquisitions for Phoenix, Las Vegas and San Diego. “We are excited about the opportunity to acquire a quality asset, with plenty of value-add potential, in such a desirable location.”
Ridge View Apartments resides within the city of Fountain Hills, an affluent suburb northeast of Scottsdale. Ridge View is just minutes east of the Loop 101, which provides access throughout the entire metro area and is conveniently located near some of the largest and most desirable job centers in the Valley including the Scottsdale Airpark, the “Cure Corridor,” and Downtown (Old Town) Scottsdale. Arguably the best submarket in the Valley, the North Scottsdale/Fountain Hills area has experienced reduced rental vacancies (currently at 4.5%) and rental growth of 7% over the last 12 months. Although this has spurred some new development in North Scottsdale, new apartment developments in Fountain Hills are very unlikely, as the municipality has enacted several restrictions on development. As it stands, Ridge View enjoys a protected rental market as one of the only true apartment buildings of its size and quality in the city.
Strong population growth and job creation in the Phoenix/Scottsdale area has created a tight rental market, as limited housing supply hasn’t kept up with increases in demand. 29SC seeks to provide affordable rental housing options for workforce housing in the prosperous city of Fountain Hills where the median home value is more than $400,000.
The new owners will renovate interiors and common areas to better compete with other properties in adjacent Scottsdale. 29SC will invest $810,000 ($5,400 per unit) to enhance the existing amenities, including renovating the clubhouse and pool area, and to update the interiors to capitalize on the current demand for higher quality housing. The property is perfectly positioned for 29SC to capitalize on the positive momentum in the market through the upgrade program. The transaction closed April 14.
29SC acquired the property in partnership with Clear Sky Capital, which provides private equity investments in real estate. Headquartered in Phoenix, it has extensive expertise in multifamily real estate.
29th Street Capital has acquired nine multifamily assets over the past 12 months in markets including Houston, Texas, Denver, Colorado, Durham, N.C. and Oakland, California. It is also actively pursuing additional opportunities throughout the U.S. The firm will continue to target smaller value-add deals, which are below the institutional radar, with the intention of offering its investors above-market returns.