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Owner Ends Long-Term Hold on 112-Unit Rancho Las Palmas, Sells for $18 Million

Transactions of the Week| Amy Wolff Sorter

Phoenix & Southwest + Apartment Buildings

Pinnacle Holdings of Florida Inc. concluded its 30-year hold on Rancho Las Palmas, a 112-unit multifamily property in Tempe, AZ. The Boca Raton company sold the property at 1249 E. Spence Ave. to Phoenix-based Rincon Partners Ltd. for $18 million ($160,714 per unit).

The sale was facilitated by ABI Multifamily’s Phoenix-based Institutional Arizona Team—Alon Shnitzer, Rue Bax, Eddie Chang, Doug Lazovick and Tyler Bruggman—in collaboration with Avison Young’s Peter Sherman, Keith O’Donnell and Mark Seale. At the close of escrow, the asset was 96% occupied.

Shnitzer told ApartmentBuildings.com that the property attracted significant interest from many high-probability multifamily buyers. “At the end of our initial, and then best-and-final round, Rincon Partners provided the most attractive offer to the seller and was selected as the buyer,” Shnitzer said.

He explained that the asset appealed to the buyer because it was well-maintained and the purchase price was below replacement costs. A representative from Rincon added, “We are excited about this new investment property and are looking for more in the area. ”

Built in 1986 and situated on 5.3 acres in the North Tempe submarket, Rancho Las Palmas is within walking distance of the light rail and a short drive to Arizona State University’s Tempe campus and Phoenix Sky Harbor International Airport. The property offers convenient access to State Route 101, Loop 202, Interstate 10 and US 60, with neighborhood retailers including Sprouts Farmers Market, ALDI, Walgreens, Whole Foods and Ace Hardware.

The property offers a mix of one- and two-bedroom units. Community amenities include a clubhouse, fitness center, swimming pool, spa, laundry facility, gated entry and open/covered parking.

Tempe has high renter demand due to limited affordable single-family options. “Though new multifamily developments are underway, they often can’t keep up with growing demand, creating opportunities for sustained rent growth for apartment owners,” Shnitzer said.

Additionally, Tempe’s population growth continues to outpace other Phoenix submarkets. Added Shnitzer: “Combined with the consistent, cyclical demand from Arizona State University’s large student body and staff, this creates a strong rental market with high occupancy rates year-round.”

Photo courtesy of Ryan Wilson Photography