Decron Properties has made its initial entry into the Arizona real estate market with the acquisition of Broadstone Rio Salado, a 278-unit multifamily property in Tempe, Ariz. for $96,150,000.
Completed in 2020, Broadstone Rio Salado’s high unit count allows Decron, which owns close to 8,600 apartment units throughout California and Washington, to immediately enter the Phoenix/Tempe market with a significant acquisition and paves the way for additional investments in the Phoenix MSA. Decron plans to acquire 1,000 units in the market over the next 12 to 24 months according to Decron CEO David Nagel.
“With its strong population growth, growing job opportunities and affordable cost of living, the Phoenix MSA checks all the boxes when it comes to demand drivers we look for in a new market,” Nagel said. “The market has a rent-to-income ratio of 20 percent, as compared to a market like Los Angeles where it’s roughly 35 percent or higher. That heightened level of affordability was one of several key factors that we value in entering this market.”
The Phoenix MSA has ranked among the top five cities in the nation for job growth since 2017 and it is projected that the market will add 90,000 net new jobs in 2021. The fifth largest city in the United States, Phoenix has seen its population grow to 1.7 million residents, an increase of 20 percent in the last 10 years.
Broadstone Rio Salado is a Class A apartment community offering studio, one- and two-bedroom floor plans featuring top-of-the-line interior finishes that include gourmet kitchens, quartz countertops, stainless steel appliances, wood-style flooring, and front load washers and dryers. The property also features extensive indoor and outdoor amenities, including a resort-style pool and spa, poolside cabanas, clubhouse with demonstration kitchen and coffer bar, a two-level fitness center with virtual training, outdoor entertainment lounge on-site bike storage, package lockers for resident deliveries and a dog park.
Located along the 101 Corridor where it meets the 202 freeway, the property is located within 10 miles of downtown Phoenix, Scottsdale and Chandler, allowing for easy commutes to many of the major employers in the area. The area’s largest employer, Arizona State University, is located just two miles from the property, making it an attractive option for both employees and students. Other top employers in the area include StateFarm, Wells Fargo, JPMorgan Chase, Honeywell, PayPal, eBay, GM, iridium, and SanDisk.
Residents of Broadstone Rio Salado have an average age of 30 with an average household income of more than $92,000.
“Like the three other markets where we have invested, Southern California, Northern California and the Pacific Northwest, the Phoenix MSA is benefiting from a growing economy. Unique to Phoenix, these growing major employers are focused on the affordability available in this submarket and taking notice of the the growing population that is migrating from more expensive cost-of-living markets,” Nagel said. “Our objective in entering the Phoenix/Tempe market is to continue to fortify the Decron portfolio with strategic acquisitions in strong multifamily markets that offer the kind of value and long term growth that Decron has been built on.”