Newmark Knight Frank (NKF) Multifamily announces the $14.3 million sale of Royal Palms, located at 5902 West Royal Palm Road in Glendale, Arizona. Senior Managing Director Brett Polachek, Director Chris Canter and Executive Managing Director Brad Goff represented the seller, 5902 Royal Palms LP, in the sale of the 138-unit property to an undisclosed buyer.
“Investors were attracted to the additional interior/exterior renovation potential resulting in an immediate value-add and possible increased rents,” said Polachek. “Multifamily rents in this submarket, like others in the Phoenix MSA, continue to perform exceptionally well.”
1970’s vintage product maintains a competitive position in Glendale, where there has been very little new construction. Currently, there are 720 units of new multifamily product under construction, with no new multifamily units planned within 3.5 miles of Royal Palms. According to NKF Research, multifamily sales for properties of this vintage increased 48.5 percent to $822 million in 2019 as Phoenix’s unprecedented corporate and residential migration drove significant returns for value-add investors.
The entire Phoenix metro area has experienced tremendous rent growth recently. Through fourth quarter of 2019, year-over-year rent growth was 9.4 percent in the North Glendale submarket alone and forecasted effective rent growth for the first half of 2020 is 3.9 percent.
The property is located in Maricopa County, which was named the fastest-growing county in the United States in 2019 by the U.S. Census Bureau. Maricopa has received this recognition for three years in a row, which averages to 6,563 new people every month, or growth at a rate roughly twice that of other top growth counties such as Clark County in Nevada, Harris County in Texas, and Riverside County in California. Moody’s Analytics forecasts the growth will continue through 2024, ultimately reaching 490,030 new people, an 9.8 percent increase in the current population. In terms of employment growth, Bloomberg recently announced that Phoenix led metros with a labor force greater than 1 million in employment growth by 8.7 percent since January 2017.