The Phoenix area remains the gold standard for investor interest in single-family rental communities, with two new listings coming to the market this week and one more poised to close this month.
NorthMarq’s Investment Sales team leads the market in this product type, with marketing and sale of seven communities since late 2018. One of NorthMarq’s pending sales is the fifth Christopher Todd community to change hands in 2020; this one is a 313-home community in Glendale, Arizona.
NorthMarq’newest listing is the area’s first golf course-based community, Villages at Queen Creek, which was built by TruVista Development, an innovator in the single-family rental and for-sale space. The firm has hired NorthMarq to market the 50-home community located on Las Colinas Golf Course in Queen Creek.
Over the past five years, the Phoenix metro area has been the launching pad for the build to rent horizontal community concept. The overall Phoenix market has 38 single-family rental communities either completed, planned or under construction, which is up from 14 at YE 2019.While similar to an apartment in terms of being for-rent, these types of homes offer larger residences that include a private backyard that’s perfect for easy maintenance and pet owners. Residents have a feeling of single-family home, without other units above or below them, but without the burden of ownership. Investors, both high-net worth and institutional, are also attracted to the developments as they offer excellent returns and less volatile occupancy vs. traditional rental product due to the longer average stay for residents.
For TruVista, the path to their newest for-rent project follows many years as a developer of boutique luxury homes throughout Phoenix. According to JD Levy, president and CEO, “The path to success involved not only finding sites in a land-starved metro area, but developing product that would have broad appeal and also educating municipalities on this new type of hybrid living developments.”
The company has also designed, entitled, and licensed their product for other developers, most recently for Watermarq Peoria and Avenue North Phoenix. “As a result of this work, TruVista has established itself as a firm that can deliver both fully entitled projects as well as fully built projects,” said Levy. TruVista has multiple shovel-ready sites, and is in the process of developing an estimated 400+ units over the next 12-18 months, including single-family detached for rent concepts.
Trevor Koskovich, president-NorthMarq Investment Sales, agrees that demand for the product type remains strong. “This has become a very desirable asset class in Phoenix, and it is rapidly expanding nationally. Investor appetite is extremely high as it is driven by strong demand from the tenants who want to enjoy a single-family home feel with the amenities of an apartment,” he said.
Amenities for communities typically include a walking paths, stainless appliances, quartz counters, vaulted ceilings, European style cabinetry, community bike racks, pool, outdoor lounge area, private backyards, available garages, smart home packages, and professional onsite management.
With the growth of the Phoenix market and the Western US in general, TruVista’s Levy is excited for the path ahead. “We have strong capital partners, substantial interest from new investors, and residents who are really responding positively to our vision. The model is being proven out by not only us, but other developers, which is exciting. Our ability to deliver such a dynamic living option at a lower overall cost than other players gives me great confidence in our future projects in Phoenix and the Western United States.”