ReNUE Properties has sold its seven-property affordable housing portfolio, making for one of the largest affordable housing transactions in Arizona’s history. The firm sold the portfolio of metro Phoenix communities to Starwood Real Estate Income Trust for $345 million. CBRE’s Jeff Kunitz and his team facilitated the transaction.
The portfolio totals 1,462 units, where a majority of the units are affordable since only 142 are market-rate, Michael Christiansen, president & CEO of ReNUE Properties, told Multi-Housing News. The portfolio includes the 196-unit Desert Eagle community in Glendale and the 152-unit Lake Pleasant community in Peoria. The portfolio also has three communities in Mesa, the 276-unit Village at Sun Valley, 174-unit Tierra Antigua and the 264-unit San Fernando. The remaining two communities, the 200-unit Bella Vista and the 200-unit ReNUE Downtown, are both located in Phoenix.
Christiansen told MHN that ReNUE Properties assembled this portfolio over the past four years, except for Bella Vista since it was acquired in 2011. The firm acquired the other Phoenix community, ReNUE Downtown, in September 2019 for $26.1 million, when it was known as Legacy Bungalow. Both Bella Vista and ReNUE Downtown are expected to close by the end of the month, pending regulatory approvals, while the five other communities have already closed. Christiansen also told MHN that the portfolio’s occupancy rate was 99.2 percent upon closing.
TAKING A TEMPORARY STEP BACK
According to ReNUE Properties, its overall apartment portfolio is on the market or currently under contract, but once completed, will be more than $1 billion in transaction volume and more than 6,000 units bought and sold over the last 12 years. The Arizona-based firm focuses on multifamily assets in the Southwestern U.S. market with more than 100 units.
But, ReNUE Properties will be taking a short break from further transactions in the Arizona market to see the effects of the expected rate hikes.
“In our current environment, ReNUE is taking a temporary step back from the market as it waits to see how forecasted rate hikes by the Fed will affect the already significantly compressed cap rates in the Arizona Market,” Christiansen told MHN.