Industrial real estate investor pivots with Phoenix apartment acquisition – Phoenix Business Journal

Long known for industrial investments in metro Phoenix, Denver-based Sagard Real Estate is making its initial foray into the Phoenix multifamily sector with the purchase of a 209-unit apartment community in Tempe.

Closing on Sept. 30, Sagard Real Estate paid $77.33 million in cash to Nasim Sikder, who bought the property from Goldman Sachs for $66.25 million in August 2019, according to Tempe-based Vizzda LLC.

“We’ve shifted and expanded our multifamily acquisition efforts across the country,” said John Bezouska, vice president of acquisitions for Sagard. “This is our debut into the Phoenix market.”

Called Trovita Rio Apartments, the community was built on 3.2 acres at 701 W. Rio Salado Parkway, in 2018, according to Vizzda. The property is currently about 93% occupied, Bezouska said. Rental rates range from $1,479 for a studio apartment to $2,424 for a 2-bedroom unit, according to Trovita’s web site.

While the name and rental rates will remain the same for now, plans call for renovations of common areas and amenities, as well as units on an individual basis, Bezouska said.

The property was purchased off market, with Steve Nikoluzakis & David Fogler of Cushman and Wakefield negotiating the transaction.

“They brought us to the deal,” Bezouska said.

Sagard eyes more multifamily investments

Plans call for Sagard to make additional multifamily acquisitions across the country.

While he doesn’t have a specific dollar figure or number of units in mind, Bezouska said he’s looking for properties located in strong growth markets.

He’s also not too interested in distressed properties, including Los Angeles-based Tides Equities LLC’s properties scheduled for a foreclosure auction this month.

“We saw those,” Bezouska said. “We’re not pursuing those.”

Instead, Bezouska said he’s looking for mid-rise and garden-style apartments in markets with strong demographic growth, business climates, lifestyle and amenities, with the Sun Belt as a target region. Tempe fits the bill.

“We think Tempe is set to outperform the broader country,” he said.

Sagard Real Estate has $4.7 billion in assets under management, with regional offices in New York City, Los Angeles, San Francisco, Austin, Texas; and Charlotte, North Carolina.

The firm is a unit of Montreal-based Sagard Holdings, an alternative asset management firm with more than $25 billion under management, more than 150 portfolio companies and a staff of 300. Sagard’s leading shareholder is Power Corp. of Canada, an international management and holding company focusing on financial services in North America, Europe and Asia.

Closings begin to move after interest rate drop

Bezouska said his team will continue to look for acquisitions in the multifamily and industrial sectors in metro Phoenix.

“We continue to see growth across the country in markets like this,” he said. “We focus on both logistics as well as manufacturing in Phoenix.”

Metro Phoenix is beginning to see large transactions closing again, after a lull caused by the rise in interest rates.

For example, New York-based Clarion Partners sold a 497-unit apartment community for $187.5 million after buying it for $64.25 million in July 2004. Closing on Sept. 10, that deal represented the largest single asset multifamily sale in Arizona so far this year, according to Yardi Matrix data.

Around the same time, a 237-unit apartment community in Phoenix sold for $72.05 million, according to Vizzda.

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