San Diego-based Tower 16 Capital Partners has secured the acquisition of Yardly McDowell, a 167-unit, build-to-rent (BTR) multifamily property for $46.5 million in Phoenix’s West Valley. This purchase marks Tower 16’s ninth in the Phoenix area and twelfth in the state of Arizona. Constructed in 2023, Yardly McDowell offers a combination of one and two-bedroom apartments, featuring a distinctive low-density site layout with single-story units and private yards. The BTR property boasts resort-style amenities, including a pool, fitness center, and expansive community lawns, making it an attractive option for potential tenants.
Strategic Acquisition in a High-Potential Market
Phoenix’s Strong Market Fundamentals
The purchase of Yardly McDowell fits seamlessly into Tower 16’s overarching strategy of obtaining high-quality real estate at a discount relative to replacement costs and prior-peak pricing. The company’s investment approach is finely tuned to identify markets with robust rental housing fundamentals such as employment growth, in-migration, and limited new supply in relation to household formation. With nearly 7,400 units acquired since 2017, Tower 16 has cemented its presence in Western markets. This grounded approach underscores their commitment to regions showcasing significant growth potential and aligns with their long-term investment vision.
According to Co-Founder Tyler Pruett, Phoenix exhibits substantial market fundamentals bolstered by increased corporate investments and job creation, factors collectively contributing to noteworthy rent growth over the next five years. The decision to acquire Yardly McDowell aligns precisely with Tower 16’s strategic emphasis on new construction and value-add opportunities in burgeoning markets across the Western United States. Significantly, this acquisition not only broadens Tower 16’s portfolio but also enhances their foray into the promising Phoenix market, reinforcing their commitment to strategic investments.
Diversified Renter Appeal and Value Addition
Another crucial aspect Co-Founder Mike Farley highlighted is the BTR product’s inherent appeal to a wide spectrum of renters. Its favorable attributes and stable tenant base make it an undeniably attractive option for diverse demographic segments. Tower 16 plans to make strategic enhancements to Yardly McDowell, including investments in common area amenities and landscaping. This proactive approach aims to meet the escalating renter demand in Phoenix, ensuring the properties not only maintain their appeal but also enhance tenant satisfaction.
In managing the property, Tower 16 will oversee asset and construction management personally, while Cushman & Wakefield takes charge as the third-party property manager. The acquisition process also involved essential representation and financing facilitation by Northmarq, with significant roles played by key team members Jesse Hudson, Trevor Koskovich, Bryan Mummaw, and Bryan Liu. This collaboration facilitated a seamless acquisition, further cementing the firm’s strategic foothold in Phoenix’s thriving rental market.
Commitment to Western Growth Markets
Expansion and Investment Philosophy
The acquisition of Yardly McDowell highlights Tower 16 Capital Partners’ calculated approach towards market expansion, particularly in regions exhibiting strong rental housing dynamics. The firm places significant emphasis on acquiring properties in areas with economic growth, limited new supply, and favorable rental trends. With a solid presence in the Western United States, Tower 16’s strategy is designed to capitalize on these fundamentally strong markets, ensuring long-term returns on investment. This latest acquisition serves as a testament to the firm’s dedicated investment philosophy and their unwavering focus on growth markets.
Since its inception, Tower 16 has consistently pursued a targeted investment strategy that prioritizes quality assets, strategic market selection, and value-add opportunities to maximize property value and tenant satisfaction. Their extensive experience in Western growth markets has enabled them to identify high-potential properties that align perfectly with their acquisition goals. As a result, the firm remains poised for continued success, leveraging their expertise to identify and capitalize on opportunities in dynamic markets like Phoenix. The acquisition of Yardly McDowell stands as a clear indicator of Tower 16’s strategic expansion and investment acumen.
Future Prospects and Strategic Vision
San Diego-based Tower 16 Capital Partners has successfully acquired Yardly McDowell, a 167-unit build-to-rent (BTR) multifamily property located in Phoenix’s West Valley, for a transaction price of $46.5 million. This acquisition marks Tower 16’s ninth property in the Phoenix region and twelfth in the state of Arizona. Built in 2023, Yardly McDowell features both one and two-bedroom apartments, designed with a unique low-density site layout that includes single-story units and individual private yards. The property is loaded with resort-style amenities, such as a pool, fitness center, and expansive community lawns, making it an attractive living option for potential renters. Tower 16’s investment in this newly constructed BTR property highlights its continued commitment to expanding its portfolio in the Phoenix area, known for its vibrant real estate market and growing demand for quality rental residences. This strategic move reflects their confidence in the area’s economic growth and residential prospects.
