Most merchant builders want to build, not operate new buildings. So once their projects are delivered, they look to sell. That’s what happened with Scottsdale, Arizona-based developer Vedura Residential at its Elevation at the Village project, a newly delivered 214-unit garden-style multifamily community in the Phoenix suburb of Gilbert, Arizona, in 2023.
“A sale after completion of construction and lease-up was the business plan,” said David Fogler, a broker with the Cushman & Wakefield Multifamily Advisory Group in Phoenix who represented Vedura.
While Elevation at the Village was brand new, there were obstacles to closing. Interest rate hikes have put upward pressure on cap rates and pushed down prices since 2022. However, finalizing the deal at Elevation at the Village was especially volatile.
“Although financing in general is challenging, in the case of Elevation at the Village, it was particularly challenging as rates rose dramatically during the escrow period,” Folger said.
Cal-Am emerges
In this difficult environment, Cal-Am Properties, a Costa Mesa, California-based privately held operator of RV resorts, manufactured home communities and apartment communities, stepped up and completed the acquisition for $66.5 million.
“A very strong and experienced buyer coupled with a great asset in a strong submarket helped overcome a difficult environment,” Folger said.
Elevation at the Village is located on the grounds of the SanTan Village open-air shopping center in Gilbert. The property features a range of floor plans, including studios, one-bedrooms and two-bedrooms. Apartments include a private patio or balcony with secured storage (in most units), a smart home package and assigned covered parking.
The property also features a resort-style luxury pool with private cabanas, a two-level fitness center and a large clubhouse. It also offers a gated entry, a pet park, an indoor dog wash, a secured bike storage room and barbeque areas.
“We had strong interest from the market,” Folger said. “This reflected the strength of the Gilbert submarket and the quality of the property.”
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