Los Angeles-Based Investor Snags Another Value-Add Apartment in Phoenix

Article originally posted on CoStar on September 5, 2019

Tides Equities acquired Tides at Paradise Valley for $57.3 million in August. The sale marks the investor's seventh investment in the market this year. (CoStar)

Los Angeles-based Tides Equities acquired its seventh apartment complex in Phoenix this year alone. The real estate investment firm has aggressively expanded its portfolio, scouring the local market for well-located, but older properties that have potential for rent growth after the infusion of capital improvements into the property.

Tides’ latest acquisition was Tides at Paradise Valley, formerly named The Edge. The investor purchased the 380-unit, garden-style complex in the Paradise Valley North submarket from Baron Properties for $57.3 million, or about $151,000 per unit. Tides plans to expand upon the renovations that have already taken place at the property. With its latest acquisition, the investor has a 20-property stake in the market.

Affordability and strong demand drivers – net migration, job growth, rising wages – in Phoenix are luring Southern California buyers to the metropolitan area. On average, capitalization rates in Phoenix are 150 to 200 basis points higher than Southern California. Limited single-family options in one of the fastest-growing metro areas in the country has pushed many potential home-buyers into the renter pool. Growing demand for rentals and a healthy supply/demand balance has stimulated robust rent growth, making Phoenix one of the top markets for multifamily rent appreciation in the country over the past few years.

The additional six acquisitions by Tides Equities this year include: