Venture on Williams

• Loan 70-80% 
• Preferred Equity 7-27%
• Common Equity 0-14%

After the property is renovated and stabilized, within three years we expect the property to sell for $225,000 per unit.

Neighborhood Overview

Rents and Occupancy

Average Rents 

Two-bedroom two-bathroom units

Neighborhood Average  $1,258/month

Zip Code Average           $1,248/month

Current Average Rent    $  825/month

Three-bedroom two-bathroom units

Neighborhood Average  $1,587/month

Zip Code Average           $1,315/month

Current Average Rent    $1,150/month

Location & Development

Venture on Williams is situated between the end of the Valley Metro Light Rail and right off of the 202 Highway making it a very sought-after area in Mesa. Venture on Williams is one of the first and largest buildings seen in the neighborhood which makes it a very influential part of the standard rent and value of the area. We believe with the updated renovations to this property we will be raising the bar for all future renovations and plans for other properties in the area. 

Venture on Williams is located at the Northwest Mesa Submarket.

Development 

Since 2012, approximately 29,000 apartment units were delivered, mostly in the East Valley neighborhoods of Chandler, Gilbert, Tempe, and Mesa. There are an additional 12,500 units underway, representing an estimated 4.2% increase in inventory, which, although elevated, is needed due to robust net migration trends. The largest of these is the Pacific Proving Grounds Master Planned Community, which will deliver an estimated 3,500 units in 2019.

ASU Mesa City Center

ASU at Mesa City Center is a state-of-the-art project that will jump-start the revitalization of Downtown Mesa and train students in one of the biggest industries in the United States: media production. The project is a unique partnership between ASU and the city of Mesa. Of the $73.5 million budget, $63.5 million will come from the city and $10 million from ASU.

It will host about 800 students and will include a large exhibition gallery, screening theaters, production studios, a fabrication lab, and a cafe that will be open to the public. The upper floors will include classrooms and spaces for collaborations with community and industry. Construction is underway with completion expected in Spring 2022.

The GRID

The GRID is a $75 million mixed-use development that brings together lifestyle amenities, three luxury housing options, a healthy, full-service restaurant, and creative Class A office space. In addition to 14,000 SF of co-work and office space,

The GRID will house 75 micro-flats with built-in furniture, 15 three-story for-sale rowhomes, and 196 luxury “Sky Apartments”.  The project broke ground in February 2020 and will be completed in phases with the first phases opening in early 2021.

The Grove on Main

The Grove on Main will consist of a diverse mixed-use development that is being constructed in conjunction with the renovation of the interior and grounds of the Mesa Arizona Temple. The community will consist of 243 multi-family units with 8,000 square feet of retail space in addition to housing the new Tempe Visitor Center.

The design vision is to create a vibrant residential neighborhood using diverse residential unit sizes, comfortably scaled buildings, Mesa-authentic architectural character, and landscaped streets and gardens. Construction started in Fall 2019 and is expected to be complete by Spring 2021.

Valley Metro Light Rail

At 28 miles and counting, the Phoenix area’s Valley Metro Light Rail project has been a major development catalyst since construction began in 2005.

As of mid-2019, light rail is credited for spurring an estimated $11 Billion in private development within a half-mile radius of its lines.

Impacts of light rail and other Transit-Oriented Development efforts extend across a variety of industries, with one recent study identifying an 88% increase in new knowledge sector businesses, 40% in the service sector, and 28% in retail new starts as compared with the area’s traditional “automobile-accessible control areas”.

Phoenix and regional economic development leaders cite the introduction and expansion of light rail and associated developments as a primary contributor to the area’s nation-leading in-migration appeal. Mesa received the first major expansion, 3.1 miles along Main Street from Sycamore to Mesa Drive in 2015, as well as a second extension of 1.9 miles from Mesa Drive to Gilbert Road in 2019.

Market Information

The Phoenix economy suffered a relatively mild downturn during the COVID 19 induced recession during the first half of 2020 and is already in recovery, adding back almost 80% of jobs lost by November 2020. Nevertheless, the metro’s recovery will slow during Q1 2021 due to rising COVID-19 cases and a softening U.S. economy.

The multifamily sector has been remarkably resilient in the face of the pandemic supported, in part, by ongoing migration to the metro. Over 76,000 residents flocked to Phoenix in 2020, on par with 2019’s 78,000 new residents. As a result, not only does the average vacancy rate remain low by historic standards at just 4.8% as of Q3 2020, but the average rate has returned to pre-pandemic levels already. Further, overall, rents have bounced back in the metro with an average quarterly rent growth of an about +1.25% in Q3 2020. Even so, certain submarkets which are more densely populated and have seen strong growth in new supply over the past few years such as Central Phoenix, North Tempe and Scottsdale and have seen vacancy rates increase and rents continue to decline as residents choose to live in less populous West and East Valley locations where rents are cheaper, and it is easier to be socially distant.

With the COVID 19 vaccine starting to be administered, the economy is likely to rebound strongly in the latter part of 2021 as more and more residents are vaccinated. Longer-term, Phoenix is likely to remain one of the strongest economies in the country due to a warm climate and relatively low business and living costs. This and the vast amount of available land should continue to attract both employers and population long-term. As a result, the Phoenix economy should continue to outperform the national economy over the long run. 

Outlook  

Above-average job and population growth bode well over the longer-term, five-year forecast. With the metro’s 20-to-34-year-old population cohort expected to expand, the multifamily sector seems well-positioned to meet future demand. 

Economic Profile - Workers 

Due in large part to the climate, tourism is one of Phoenix's top industries. Roughly 43 million people fly through Sky Harbor Airport each year, making the Valley of the Sun the starting point for many travelers' Arizona vacations and providing a need for workers in the leisure and hospitality sectors. 

Phoenix is also developing into a technology hub, with many web-based companies like GoDaddy and InfusionSoft finding a home here. Residents also find work in the financial services industries, with Wells Fargo, Bank of America, American Express and JPMorgan Chase & Co. employing large numbers of locals.   

The unemployment rate in Phoenix is slightly below the national average.
 

Job Market Index Score: 6.5 /10 

Average Annual Salary 

• Phoenix- $50,520 
• USA- $51,960

Top Industries in Phoenix

• Health Care and Social Assistance- Total Employment 277,300 (Nursing Aid Salary: $24k - $34k) 
• Administrative and Support and Waste Management and Remediation Services- Total Employment 206,500 
• Accommodation and Food Services- Total Employment 201,000