RSI Equity Partners has sold two build-to-rent communities in the Phoenix metro to The Inland Real Estate Group of Cos. for $185.9 million. The portfolio includes the 263-unit TerraLane at Canyon Trails in Goodyear, Ariz., and the 148-unit TerraLane at South Mountain.
Northmarq brokered the deal on behalf of the seller. No acquisition financing details were on record with the county at the time the story went to press.
TerraLane at Canyon Trails, located at 195 N. 173rd Ave., just south of the intersection between Loop 303 and Interstate 10, opened in 2021. The luxury property has one- and two-bedroom homes ranging from 642 to 995 square feet, with monthly prices starting at $1,595 to $1,899, according to the property's website. On-site amenities include a heated swimming pool, detached garages, valet trash collection, and grilling stations.
The second community, TerraLane at South Mountain, also delivered in 2021. The property is approximately 10 miles southwest of downtown Phoenix at 8449 S. 59th Ave. and has similarly sized homes and comparable amenity offerings to Canyon Trails.
Single-Family Demand Surges
Nationwide, single-family rental communities have been picking up steam in the past few years. Today, there are some 16 million such homes for rent, equivalent to more than one-third of all rental units. Markets in the Sun Belt have seen the highest demand due to rapid population growth as employers shift headquarters and open offices deeper into the southern U.S.
Phoenix stands out in particular. The metro's rapid population growth, combined with strong labor market gains, continue to push rents higher and higher. Phoenix Business Journal reported the metro's single-family housing rents jumped up 18.9% for the year ending in December, more than double the national rate of 7.8%.
One factor impacting rents? Plummeting availability. As demand for single-family home ownership has increased, this has severely impacted the amount of rental inventory on the market. As a result, with vacancy dropping, rents climbed — and will likely continue to climb in the near term.