Phoenix-Based Rise48 Equity Riding “Workforce Multifamily” to Success
There are some folks out there who are able to turn lemons into lemonade. Even with increasing interest rates, there are still deals to be made, especially in the “workforce multifamily” sector.
Zach Haptonstall started his real estate investment company, Rise48 Equity, in 2019. Since then, the Phoenix-based company has completed over $1.8 billion in transactions and has $1.4 billion of assets under management. In his own words, this is how he sees the Phoenix market.
“We’re seeing strong leasing demand across the portfolio as people are flocking toward affordability with high-quality interior finishes. We feel insulated in our Class B housing space and are confident in the strong fundamentals of the diversified employment base in Phoenix and the strong in-migration that continues to grow the population each year. Due to high interest rates, values are down 15-25% in the short term and there’s very little competition, so we see this as an excellent window to acquire new properties at a low basis to achieve strong returns for our investors. We’re using the same conservative financing strategy that we’ve always employed by using low-leverage loans, buying 3 year interest rate caps, and raising significant cash reserves at the property level. We think interest rates could start to decrease in 2024, and when they do we expect cap rates to compress and values will go up quickly. By that time, we will have renovated the majority or all of the units at our assets to maximize NOI, and we should be able to sell deals and achieve strong returns for investors. We’ll see what happens, but we do think it’s a good time to buy. This is the recession and discounted pricing that everyone’s been saying they’re waiting for the past 5-7 years.”
Mike covers our Texas and Phoenix/Southwest regions. He is a veteran news reporter who spent 10 years in radio and television news, mostly in Tucson, Arizona. Following his career in the media, he spent ten years as a communications executive for a publicly traded development company. Mike is married with three boys and three Huskies.