By Angela Gonzales | Phoenix Business Journal
Scottsdale-based Keystone Homes sold its first build-to-rent project and now has four more in the pipeline totaling $197 million in development costs.
A year after completing construction, the 147-unit luxury rental community on 12 acres in Fountain Hills was more than 90% occupied when Keystone sold it to Washington-based Private Portfolio Group for $68.3 million.
When the Havenly Fountain Hills transaction closed, monthly rental rates ranged from $2,090 for a 722-square-foot one-bedroom unit to $3,570 for a 1,612-square-foot 3-bedroom unit, said Jim Belfiore, chief strategist for Keystone Homes.
While developers have been building these build-to-rent communities across the Valley, this was the first build-to-rent community approved in Fountain Hills, Belfiore said.
Mark Forrester, senior managing director of Berkadia Phoenix, represented Keystone in the transaction, while Scott Holland, senior managing director for Berkadia Scottsdale secured financing on behalf of the buyer.
More projects on tap for Keystone
Proceeds from the sale are being used to finance the development of more build-to-rent communities where Keystone will have the first BTR product approved in Santa Fe, New Mexico.
The Santa Fe project will be Keystone’s debut in New Mexico and its first venture outside of Arizona since the company started building for-sale homes in 1989.
Today, Keystone is focusing on the build-to-rent market, with plans to begin development on a 183-home luxury community in Santa Fe, where the architectural design will complement the traditional style of Santa Fe.
“We’ve been looking in New Mexico for the right land opportunity for about a year,” Belfiore said. “Santa Fe has a shortage of housing. There is no other build-to-rent community in Santa Fe. The city of Santa Fe has embraced our product and we’ve embraced their residents’ desire to have a unique lifestyle product that’s designed in a more traditional Santa Fe style. The architecture embraces their unique brand and identity.”
Being the first build-to-rent community in a city can be a daunting process because those municipalities don’t yet have a code that matches this type of rental product where the single-family homes are detached in a community with resort-like amenities.
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