Scottsdale-based Sterling Real Estate Partners recently acquired 9.6 acres of land with plans to develop a 238-unit, Class A apartment complex in the heart of Avondale’s rapidly expanding community. The property will feature luxury unit interiors, a resort-style pool, a state-of-the-art fitness center, a furnished outdoor lounge, and more. The land is located in a Qualified Opportunity Zone (QOZ) which provides for significant tax benefits to investors and will deliver additional multifamily housing to the rapidly growing West Valley community.
"In the Phoenix metro, pricing for existing assets has now exceeded replacement cost. Sterling has always been a value investor and now, the better value is to build. We see a bright future for the city of Avondale and believe the project is positioned to take advantage of the area’s exponential growth,” said Sterling’s President, David Zeff.
The project will become an industry-leading community boasting premium amenities that will provide a high quality of life for residents and will help serve the 7.9 percent population growth projected over the next five years. Avondale has seen its population grow by 21.4 percent since 2010 and has been accompanied by a rent growth of 14.3% in 2021 alone. The city has been recognized as a hub for healthcare, manufacturing, highly skilled and well-educated residents, and known as a world-class sports destination. Home prices in Avondale and neighboring Goodyear have risen 37.9 percent over the past year, up to a median sale price of $400,000. This has led to an affordable housing shortage in the area, creating an underserved demand for apartment living.
The proposed community will feature an array of 1-, 2-, and 3-bedroom units exhibiting modern finishes with quartz countertops, stainless steel appliances, vinyl plank flooring, and in-unit washer/dryers. Units range in size from 551 square feet up to 1,100 square feet with select units also including garages. The project is expected to begin in May of 2022 with completion estimated for Q4 of 2023.
The site is located within walking distance of schools, shopping, and a short drive from recreation and entertainment destinations such as Phoenix Raceway, State Farm Stadium, Westgate Entertainment District, Estrella Mountain Regional Park, and the White Tank Mountains. There are also a growing number of employment opportunities in the West Valley including Banner Health, Abrazo Health, Amazon, Target, REI, and UPS.
Sterling is a multifamily investment company that has executed heavy value-add projects throughout Arizona, Texas, and Nevada. The proposed project will mark the first ground-up development for the company’s expanding Arizona portfolio.
“The characteristics of the project fit our investment criteria: great location, strong demographics, a thriving job market, high barriers to entry, and limited competition, not to mention the rare opportunity to acquire an entitled site in a tax incentive Opportunity Zone. We are excited to add a development platform to complement our value-add and adaptive re-use investment strategies,” said Zeff.
Zack Mishkin with Orion Investment Real Estate brokered the transaction for the 9.6-acre parcel.