S2 Capital Pay $55 Million for Apartments in Phoenix’s Glendale Suburb

Article originally posted on CoStar on November 15, 2020

The Eagle Crest apartments in Glendale, Arizona, were built in 1987. (CoStar)

Apartment investment firm S2 Capital paid $55 million, well below the average price in Phoenix’s torrid apartment market, for a 408-unit apartment complex in the suburb of Glendale, Arizona.

S2 Capital, based in Addison, Texas, bought the Eagle Crest apartments built in 1987 at 6451 W. Bell Road in the Arrowhead Ranch master-planned community from a family trust in Fullerton, California, for $134,804 per unit. That’s almost 27% lower than the $183,000-per-unit average for greater Phoenix, according to CoStar Market Analytics.

The coronavirus pandemic has not eroded the appeal of greater Phoenix’s increasing population and affordable cost of living for both renters and investors, Cliff David, executive managing director for Marcus & Millichap’s Insitutional Property Advisors division that represented the seller, said in a statement.

“Companies also continue to move and expand in the Phoenix area,” said David’s partner, executive managing director Steve Gebing. “Expanding logistical operations in the market and the metro’s industrial sector are benefiting from an increased presence among manufacturers.”

The 17-acre Eagle Crest is 20 miles northwest of downtown Phoenix near Arrowhead Towne Center, the P83 entertainment district and the Bell Road retail corridor.

The affluent Arrowhead community of single-family homeowners surrounding Eagle Crest are unlikely to support more apartment construction in the area, which could help shield the new owners from competition from future projects and enhance returns if S2 Capital upgrades the property and increases rents, the brokers said.

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