The Greater Phoenix multifamily segment has proven resilient in the last year due to its steady and dynamic fundamentals: population inflows, job growth and the supply/demand equilibrium in units. According to Newmark research, vacancy rates and cap rates finished first quarter 2021 at 3.7 percent with average asking rates reaching $1,286. Units under construction totaled 16,470 and sales price per unit averaged $203,151.

In a display of that resiliency, two multifamily properties – Daybreak Gardens Apartments and Daybreak Place Apartments in Phoenix – recently sold for a total of $66.9 million. The buyer, S2 Residential, plans to renovate the properties.

Newmark’s Brett Polachek, Brad Goff and Chris Canter represented the seller, Place Properties II & III, a long-term owner.

“Both properties had been owned by the seller for several years and had been consistently managed for occupancy and well maintained,” said Polachek. “The rental market has evolved, and tenants are willing to pay materially more for a nicely renovated unit. The buyer recognized the value in the opportunity these assets and the locations offer.”  

The first property, Daybreak Gardens, is located at 5225 E. Thomas Rd. and consists of 161 units. The second property, Daybreak Place, is located at 815 E. Bethany Home Rd. and totals 211 units. Both properties are near Loop 202 and SR 143, along with the Biltmore Area, North Central Phoenix, downtown/midtown Phoenix and Scottsdale.

Additionally, the surrounding area presents strong demographics with an average household income exceeding $100,000 and single-family home prices at more than $450,000 within a 1-mile radius.