Suburban Chicago Firm Is Still Sweet on Phoenix Apartments

Article originally posted on CoStar on March 16, 2020

Inland Real Estate Group has agreed to buy a portfolio of three garden-style apartment complexes, all outside Phoenix, including the Communities on Camelback. (CoStar)

A suburban Chicago investment shop is doubling down in the suburban Phoenix rental market.

Inland Real Estate Group, of Oak Brook, Illinois, has agreed to pay $110 million for a three property, 457-unit portfolio.

The properties, in Litchfield Park, Surprise and Tolleson, Arizona, were all built between 2018 and 2019 and are now 95% leased, according to CoStar data.

The trio of properties, acquired from local developer Christopher Todd Properties, are Inland’s latest investment in the Sun City region. The firm acquired an eight-property, $74 million portfolio in 2018, and then picked up a $55 million Queen Creek property in November.

The properties just acquired are the 167-unit Communities on Camelback in Litchfield Park; the 136-unit Greenway in Surprise; and the 154-unit Country Place in Tolleson. They are reasonably swank with fitness centers, swimming pools and lounges — the usual Class A amenities.

Phoenix, with its impressive job growth and population influx, has a big demand for apartments. Rent growth is averaging 5.6% annually, well over the 2.4% national average. At 6.6%, vacancy is just about the national average despite a wave of new construction.

Investors from all over the United States have been kicking the tires in Phoenix-area apartments in recent years.