Chicago Multifamily Investor To Build Its First Development in Greater Phoenix

Article originally posted on CoStar on May 25, 2022

Developer 29th Street Capital Expects To Start 201 Single-Family Rental Units Before Year-End

Investor 29th Street Capital, which recently bought this apartment complex in Avondale, Arizona, is planning its first development in greater Phoenix. (CoStar)
Investor 29th Street Capital, which recently bought this apartment complex in Avondale, Arizona, is planning its first development in greater Phoenix. (CoStar)

Multifamily developer 29th Street Capital bought 20 acres for a planned single-family rental project in Apache Junction, Arizona, as the firm expands its footprint in greater Phoenix with its first development project.

The Chicago-based developer paid $9.5 million for the land at the southwest corner of Tomahawk Road and Broadway Avenue approved for development of 201 luxury single-family rentals that it expects to start building later this year.

The Apache Junction project is the first development in greater Phoenix for 29th Street Capital, which has acquired more than a dozen apartment complexes in the area since 2011. The company made its biggest purchase yet in the area in February, paying $84 million for the Oceana apartments in Avondale.

The firm, formed in 2009, has offices across the country and recently also acquired apartments in Houston; Denver; Overland Park, Kansas; and Louisville, Kentucky.

The Apache Junction development is expected to include 164 detached and 37 duplex homes in a gated community. It is planned to include a pool and lounge deck, clubhouse, fitness center and dog park. Haven Residential, the developer’s property management arm, will oversee management and leasing, the company said in a statement.

Developers in Phoenix have ramped up construction of single-family build-to-rent communities. NexMetro and Christopher Todd Communities, among others, have built or are planning thousands of rentals, including large concentrations of units across Phoenix’s West Valley.

The Apache Junction site, which is in a federal opportunity zone, is “convenient to the strong and growing multifamily demand in the East Valley of Phoenix,” Mark Forrester, senior managing director for Berkadia, said in a statement. Berkadia represented the seller, Phoenix-based Clyde Capital.

Developers that undertake projects in federal opportunity zones receive tax benefits on capital gains for building in designated economically distressed urban and rural communities.

Rental housing developers have built about 3,200 units across Phoenix’s East Valley since 2015, with another 3,400 units under construction in growing cities such as Apache Junction, about 33 miles east of downtown Phoenix, according to CoStar Market Analytics.

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