Target Information

Griffin Capital, a prominent private real estate investment manager, has initiated construction on Modera Rio Salado, a multifamily community consisting of 319 units in Tempe, Arizona. This development is strategically located just one and a half miles from the Arizona State University campus and adjacent to the Tempe Center for the Arts. The area is undergoing significant transformation into a major employment hub within Phoenix, characterized by its proximity to key locations including Phoenix Sky Harbor International Airport, Scottsdale, Camelback Corridor, and Downtown Phoenix.

The new seven-story podium-style community will feature a diverse range of apartment units, from studios to three-bedroom layouts. Residents can expect a comprehensive array of amenities such as a resort-style pool, an expansive fitness center, a resident lounge, rooftop communal space, and covered parking facilities.

Industry Overview in Arizona

The multifamily housing sector in Arizona, particularly in the vicinity of major educational institutions like Arizona State University, is experiencing robust growth. Driven by a combination of economic expansion and population influx, the demand for residential units in urban areas is notably increasing. The development of new employment opportunities is contributing toward turning Tempe into a bustling metropolitan hub, which makes it a prime target for multifamily investments.

Furthermore, the multifamily market in Phoenix is buoyed by favorable demographics and rising rent prices, matching the national trend. High demand in urban centers indicates a strong potential for rental growth, providing attractive returns for investors in this sector.

Statewide, the Arizona real estate market is characterized by a scarcity of affordable housing. The construction of new multifamily housing projects like Modera Rio Salado is crucial in addressing this gap and fulfilling the needs of the growing population, which includes a significant student demographic.

For investors, market conditions are favorable with low vacancy rates and increasing rental demand, indicating a reliable income stream from rental properties. Enhanced infrastructure and community amenities in Tempe are also expected to drive long-term value appreciation in real estate assets.

Rationale Behind the Deal

The rationale for this construction project is anchored in the anticipated growth of Tempe as a significant employment center enhanced by the ongoing expansion of Arizona State University. Griffin Capital's focus on Opportunity Zones aims to stimulate investment in areas that are expected to flourish, thus benefiting both the community and stakeholders.

The development aligns with the Opportunity Zone program, which incentivizes investments in economically disadvantaged areas. This approach not only fosters local economic development but also supports Griffin Capital's long-term vision of generating sustainable returns through strategic real estate investments.

Information About the Investor

Griffin Capital Company boasts nearly three decades of experience in the real estate investment and management sector. With a diverse portfolio of approximately $23 billion in assets, the firm has built a reputation for excellence and innovation. Their strategic focus on multifamily developments, particularly within Opportunity Zones, showcases their commitment to capitalizing on emerging markets.

Griffin Capital has successfully raised over $1.4 billion across its Qualified Opportunity Zone Funds, supporting twenty investment opportunities spanning multiple cities. Their extensive experience and substantial co-investment by employees demonstrate a strong alignment of interests between the company and its investors.

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From an investment perspective, Modera Rio Salado presents a favorable opportunity given the growing demand for multifamily housing in Tempe. With the area's transformation and a strong employment outlook bolstered by Arizona State University, this project is well-positioned for future rental income and potential appreciation.

The combination of community amenities, strategic location, and the economic benefits of the Opportunity Zone designation adds substantial value to this investment. Furthermore, Griffin Capital's robust track record in the real estate market provides confidence in their capability to successfully execute this project.

While market conditions are promising, it remains essential for investors to continuously monitor local economic shifts and demographic trends. However, the data currently suggests that the development is likely to result in positive returns and contribute to addressing the housing needs in the region.

In conclusion, this investment aligns well with long-term growth strategies, and if executed effectively, could become a landmark development in the burgeoning Tempe market.

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