Hunt Real Estate Capital is bullish on the Phoenix and Arizona markets. The lender has recently financed two multifamily acquisition deals in Phoenix and Glendale, and wants to increase its exposure in the market. In addition, Hunt says that its partners and Fannie Mae and Freddie Mac are bullish on the Phoenix market, and are looking for opportunities.
“We would love to increase our exposure in the Phoenix market. Our partners at Fannie Mae and Freddie Mac continue to be bullish about Phoenix, and our Hunt proprietary bridge and permanent loan balance sheet lending programs are always looking for good deal stories and clients to support in the market,” Colin Cross, Director at Hunt Real Estate Capital, tells GlobeSt.com. “We've looked at everything from luxury new construction deals in the Arts District of Central Phoenix, to nice student housing properties in Tempe near ASU, to older value-add renovation deals in Glendale and Goodyear here recently in those programs—and would love to see more.”
Hunt funded the acquisition of Canyon Woods Apartments, a 12-building 224-unit apartment complex in Phoenix, and Shadow Rose Apartments, a 14-building, 148 unit apartment complex in Glendale. “These properties are great representations of the types of assets we strive to finance at Hunt,” says Cross. “They are well-maintained and well-occupied assets located in stable but growing submarkets; they serve a need for Affordable housing within their neighborhoods; they are being purchased by a local, repeat Hunt client that already has a strong presence in the Phoenix market; and they are expected to be improved by implementing Green water and energy-saving enhancements after acquisition. Those are essentially all the tent-poles of our core lending mission nationwide.”
While Hunt has a positive outlook on the Phoenix market in general, it is especially bullish on multifamily product. “We're seeing more and more families choosing to rent instead of owning a home, and that's been especially true in Phoenix where there has been a 42% increase in families with children renting in the last decade according to RentCafe,” explains Cross. “Add that to the growing population of young adults who already prefer to rent along with the increasing number of empty-nesters that are looking to downsize into vibrant walkable neighborhoods, and you can see why the demand for apartment units is so high in a dynamic market like Phoenix that caters to each of these types of renters.”
Hunt isn't the only lender looking to increase its exposure in Phoenix. Lender competition has increased this year across asset classes, according to Cross. Job growth has a lot to do with the surge in interest. “According to a June 2018 report from Yardi Matrix the year-over-year job growth in the Phoenix MSA was 2.8% making it one of the highest ranking metros in the country, and that led to year-over-year rent growth of over 5.0% plus a forecasted rent growth of 5.6% through the end of 2018 (which is their second highest market forecast in the country),” he says. “As other “hot” markets like Austin and Nashville begin to slow some in these metrics it seems like a lot of national investors are turning their eyes towards markets like Phoenix that are still showing strong growth patterns. That's why we love partnering with local owners who know the markets well already and are looking to invest long-term. We'll lend to those borrowers all day long.”
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Kelsi Maree Borland
