Newmark Knight Frank announces the $26.3 million sale of Bell Tower Apartments, a 224-unit, value-add multifamily community located in the dynamic North Phoenix submarket. Executive Managing Director Brad Goff, Senior Managing Director Brett Polachek and Director Chris Canter represented Simone Bell Tower, LLC in the sale to KA Capital.
Completed in 1986, Bell Tower Apartments – which has been well-maintained under the same ownership for more than two and a half decades – is primed for renovation and repositioning, as 98% of unit interiors remain untouched. “The sale was a win-win for all – offering the buyer great potential upside from asset repositioning and allowing the charitable foundation holding the property to diversify into different product types,” said Polachek.
After a record capital raising year in Phoenix, with a particular focus on value-added multifamily properties by funds such as Nuveen (TIAA), Brookfield, and Blackstone, the team believes that competition for these particular assets will continue to increase despite the perceived late stage of the cycle. Goff, Polachek, and Canter have spent decades building a reputation for excellence in this niche in the Phoenix market.
Bell Tower Apartments is well situated to benefit from the Greater Phoenix Metro’s nation-leading population and employment growth. In 2018, Phoenix added 76,900 jobs, an annual growth rate of 3.7%, compared to the U.S. rate of 1.8%, according to the U.S. Bureau of Labor Statistics. The U.S. Census Bureau named Maricopa County the fastest growing county in the country in 2017, compounded by 11% year-over-year net migration in 2018, and is forecasted by Moody’s Analytics to add another 569,470 people, or 11.7% of the current population, within the next five years.
The current vacancy rate in the North Phoenix submarket is 5.7%, lower than the Phoenix metro average. Average rental rates in the submarket have increased by $58 over the past year as well. Area demographics are also quite strong with a $67,990 average household income within a one-mile radius of Bell Tower.
At 17216 North 33rd Avenue, immediately adjacent to the I-17 and Loop 101 freeways, the property offers easy access to a variety of dining, retail and high paying employers such as PetSmart’s Corporate HQ, Honeywell, HonorHealth, Discover Financial Services, and the world-renowned Mayo Clinic. Off of Loop 101, Nationwide Insurance purchased a 136-acre site where it is constructing a mixed-use regional headquarters that will house thousands of relocated employees, with an average income of $58,000 plus benefits. American Express is also expanding its regional hub with a fourth building that will add about 300,000+ SF and 3,000 relocated employees.