Zach Haptonstall, CEO of Phoenix-based Rise48 Equity, just purchased an apartment community in Glendale and is in escrow to close on three more apartment communities.
Paying $56.1 million for Solano Vista Apartments in Glendale on Oct. 7, Haptonstall expects to close on another community on Oct. 14 for $45 million, bringing total investment for 549 units to $101.1 million within eight days.
The other two communities he has under contract are expected to close by the end of November, which will bring Rise48 Equity’s portfolio to 1,715 units representing $292 million in value.
With more than 1,000 investors in its database, Rise48 Equity invites “everyday people” to invest anywhere from $50,000 to $100,000 in each deal.
“We use debt fund bridge loans with publicly traded companies as the lender, and for our equity we just go out to everyday individuals and raise money from retail investors,” he said.
The Solano Vista deal closed with more than 250 investors, Haptonstall said.
Plans call for investing more than $6 million to renovate the exterior and interiors of the property, and rebranding the property to Rise Parkside.
Built in 1973 on 8.79 acres, Solano Vista Apartments at 7102 N. 43rd Ave. was 90% occupied when the deal closed on Oct. 7, with average rental rates around $850 a month.
After renovations, Haptonstall said he will raise rents to an average $1,050 across all three unit types from studios to 2-bedroom units.
“By the time we’re done with the units, they will look like class A luxury interiors but will be a workforce housing product. It will still be affordable but the rental increase improves the value of the property, which is where we get our profit margin for our investors. We improve the community and make investors a good return.”
According to Tempe-based real estate database Vizzda LLC, Rise48 Equity bought the Solano Vista Apartments from Salt Lake City-based Sundance Bay Capital, which had paid $30.75 million to 3rd Ave Investments in September 2019 for that apartment complex.
Before that, in January 2018, 3rd Avenue Investments bought it for $17 million from Direct Source Wealth, according to Vizzda.
Earlier this year, Haptonstall said his 2021 goal was to close on $250 million in apartment deals.
Once the three deals in escrow close, he will have reached $448 million in assets totaling 2,359 units.
As of today, the company has 2,100 under management with a total value of $339 million.
His 2022 goal is to acquire $1 billion in multifamily properties in metro Phoenix.
“Based on capacity and demand, we think we can bring the equity to acquire that,” Haptonstall said. “It’s going to come down to market conditions and finding deals that still make sense to get our investors those risk-adjusted returns.”
After selling one 112-unit property for $18 million earlier this year, Haptonstall said he’s also selling three more properties in Glendale and Phoenix for more than $77 million.
“We executed our business plan on these three deals,” he said. “We are going full cycle and selling them and are excited about that. They will all close before the end of the year.”
On a hiring spree lately, Haptonstall said he’s outgrowing his 2,800-square-foot space at 24th Street and Indian School Road. With 13 full-time employees, Rise48 will be moving into a 7,500-square-foot space a the Esplanade at 24th Street and Camelback Road.
“It’s been a lot of fun,” he said. “We’re bullish on the Phoenix market. We’ll probably finish over $500 million this year if we get a couple more deals.”