By Gabriela Rico for Arizona Daily Star
Investor interest in Tucson’s upper-end apartment complexes has been high for several years and, while there was some breath-holding at the start of the pandemic, millions of dollars worth of transactions have transpired in the past few months.
Investors are focused on the high-wage jobs the city has gained in recent years, the low rate of new multifamily projects and the fizzling out of formerly hot markets in states like Colorado and Oregon.
“Tucson is at an all-time high because of demand, while supply is at an all-time low,” said Allan Mendelsberg, a multifamily specialist with PICOR commercial real estate.
He said the pandemic is not a deterrence for most investors.
“They’re not factoring that into their analysis,” Mendelsberg said. “There’s plenty of buyers willing to view this as short-term.”
Existing complexes have been trading hands at a dizzying pace and new developments are underway around the metro area.
Local homebuilder, Chris Kemmerly, president of Miramonte Homes, recently pulled about $3.5M in building permits for a new multifamily development near Cherry Avenue and Kino Parkway, in close proximity to the University of Arizona and downtown Tucson.
The 54-unit project is a group of four-, six- and eight-plex lofts. Rental prices will be determined by market conditions when they open in the spring of 2021.
Lenders who back these projects also see the increased interest for a variety of housing in the Tucson market.
“The demand for a quality product is out there right now and that’s based on our bank customers,” said Charlie Sonneborn, interim CEO of Canyon Community Bank, which helped finance The Cherry Lofts. “We work with investors and developers we trust and solid operators who know how to manage as well.”
According to ABI Multifamily, an apartment brokerage and advisory firm, Tucson is well positioned to weather the pandemic and, as a result, the rental market will benefit.
Read more at Arizona Daily Star.