Apartment Deal Near Phoenix Among Region’s Largest of Past Year

Article originally posted on CoStar on November 6, 2023

Student Housing Complex in Tempe Trades for $130 Million Amid Rising Demand

A student housing complex near Phoenix sold for $130 million in the region’s second-largest multifamily deal of the past year amid recovering demand among renters and investors.

Austin, Texas-based investment firm Virtus Real Estate Capital partnered with Columbus, Ohio-based Coastal Ridge Real Estate to acquire the 260-unit Nine20 Tempe complex built in 2018 at 920 S. Terrace Road in Tempe, Arizona.

The 775-bed student complex is near the main campus of Arizona State University and was purchased from former investors within Coastal Ridge Real Estate, according to public data and a statement from TSB Capital Advisors, which arranged financing for the deal. CoStar data showed the property last sold for $115 million in August 2019.

In the TSB Capital statement, Coastal Ridge investments director Rick Travis said the deal “aligns with our investment strategy of owning well-located assets serving Tier 1 universities.” Virtus Managing Director Christopher Kott said student housing fundamentals “have never been stronger.”

The deal comes after several large multifamily transactions in the region during the past year, most recently including last month’s $102.3 million purchase of a 323-unit Phoenix property by Mid-America Apartment Communities of Germantown, Tennessee.

CoStar data as of Nov. 2 showed the Phoenix region posted $3.8 billion in apartment sales during the past 12 months, down more than 77% from the prior year. Vacancy rose and rent growth flattened as demand fell behind a fast-rising supply of newly built apartments.

The region is still among the nation’s most active for renter and investor demand, after more than 8,000 apartments were leased up during the first three quarters of 2023, as consumer sentiment improved with an easing of inflation. “This outpaced the pre-COVID five-year average of about 5,300 units,” according to a CoStar Market Analytics report.

TSB Capital Senior Vice President Ian Bradley said Nine20 Tempe is “an incredibly well-performing asset in one of the best student housing markets in the country.” The complex entered the current academic year fully leased for the fifth consecutive year.

Nine20 Tempe includes studio through four-bedroom units, with amenities including a poolside lounge and two-story fitness center. TSB Capital Advisors helped procure a $78 million loan from SMB Bank.