JLL’s LaSalle Buys Apartments Near Chandler as Outside Investors Focus on Greater Phoenix Complexes

Article originally posted on CoStar on March 2, 2023

Mountain Park Sells for 18% Below Neighborhood Average as Rising Interest Rates Cut Into Pricing, Deal Activity

The Mountain Park apartment complex was built in the mid-1990s. (CoStar)
The Mountain Park apartment complex was built in the mid-1990s. (CoStar)

LaSalle Investment Management, an independent subsidiary of JLL, bought a 240-unit apartment complex near Chandler as out-of-state investors keep snapping up multifamily properties in greater Phoenix.

LaSalle paid $70 million, or $291,730 a unit, to buy Mountain Park at 4221 E. Ray Road in Phoenix’s Ahwatukee Foothills Village area from a fund controlled by Newport Beach, California-based Sares-Regis Group, according to public sale documents.

Sares-Regis sold the gated property built in 1994 for about 30% more than the price that the California-based developer paid for the property in early 2020, CoStar data shows. However, the price is more than 18% below the average paid in the Chandler area, where prices have reached record highs as nearly $1 billion in properties have traded over the past 12 months, according to a report by CoStar Market Analytics.

The 12.5-acre property sits west of Interstate 10 and is near Phoenix Mountain Preserve and South Mountain State Park. The property is also in close range of such major business districts as Ahwatukee Towne Center, Foothills Park Place, Phoenix Premium Outlets and Chandler Fashion Center, according to a statement from Institutional Property Advisors, a division of Marcus & Millichap that brokered the sale.

“High barriers to entry have led to supply constraints in Ahwatukee for decades, marked by only two multifamily properties completed in the submarket over the last 20 years,” IPA’s Cliff David said in the statement.

The property has a mix of one-, two- and three-bedroom apartments that rent for an average $1,678 a month, slightly below the average for the Ahwatukee submarket, CoStar data shows. The units have washers and dryers, patios or balconies with additional outside storage. Some units have wood-burning fireplaces and private stairwell entrances.

For the Record

Cliff David and Steve Gebing, IPA executive managing director, represented the seller, Sares Regis Multifamily Value-Add Fund III, and procured the buyer, LaSalle Investment Management.