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Blackstone sells Tempe apartments for $136M, still owns 7,000 units

Blackstone Inc. (NYSE: BX) has sold a 495-unit apartment community in Tempe for $136.1 million, according to Tempe-based Vizzda LLC real estate data firm.

Vizzda records show an entity tracing to Knightvest Capital and LEM Capital acquired the property that was built in 1987 on 19.84 acres at the southwest corner of Kyrene Road and Grove Parkway in Tempe.

Divesting that property leaves Blackstone with nearly 7,000 units in the Valley, either directly or through affiliated companies, said Tom Brophy, research director for Colliers International.

In the institutional investor sector, there have been 30 transactions of properties containing more than 100 units representing a total value of $2.15 billion since Aug. 1, he said.

“Institutional investor demand for Phoenix properties, including both multifamily and industrial, has never been greater,” Brophy said.

Fueling investor demand is robust population growth, job growth and market performance, he said.

“Despite robust construction deliveries, the Phoenix metro’s average occupancy rate hit 97.3% in July, its highest reading ever,” Brophy said. “Lastly, in regards to Class A apartment projects which companies like Blackstone have been targeting, rent for these properties continue to have a substantial delta, currently $962, less than the average monthly mortgage payment.”

Linda Fritz-Salazar, vice president of Orion Investment Real Estate, said 18 deals over $100 million have closed in metro Phoenix since Jan. 1, 2020, with 15 of them closing this year.

One of those deals was The Stewart, which commanded a $125.5 million price tag after being sold to New York Life Real Estate Investors, according to Vizzda.

Before that, an even bigger sale was the $312.5 million sale of a 724-acre property in north Phoenix. That purchase by Los Angeles-based The Ezralow Co. marked the largest single-asset multifamily transaction in Arizona history.

“Phoenix continues to be a favorite for investors, especially for mulitfamily, due to the Valley’s strong growth,” Fritz-Salazar said. “As people and businesses migrate to Arizona, there continues to be an ongoing need for housing.”

Fritz-Salazar said she and her business partner, Angelessa Ritchie, have found that lenders also are feeling very positive about the Phoenix market and are comfortable lending on the larger existing multifamily assets, as well as new construction projects.

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