After a 20-year hiatus, Sherman Residential is making a strong comeback to the Phoenix market with a $72.05 million acquisition of a prime multifamily property. Their latest investment in the Valley signals renewed interest in the local real estate market and highlights key trends for investors.
Key Takeaways from Sherman’s Big Move
1. The Acquisition: $72M for a Class A Apartment Complex
- Sherman Residential purchased Vela on Camelback and rebranded it to Axis Camelback.
- Located at 4949 N. 7th St., Phoenix, this 237-unit Class A multifamily complex was originally built in 2018.
- At the time of purchase, the property was 88% occupied, indicating strong rental demand in the area.
2. Planned Upgrades & Investment Strategy
- Sherman plans to invest $600,000 in the first year for property enhancements, including:
- Exterior repainting
- Balcony restorations
- A hand-painted mural of Camelback Mountain
- Upgrades to amenities like the 24-hour clubhouse, speakeasy lounge, and sky deck
- Over the next five years, they plan to spend $1 million in improvements before selling the property.
3. Rental Market Implications
- Rents start at $1,300, but new tenants may qualify for up to 8 weeks of free rent—a sign of strategic lease-up incentives in a competitive market.
- This suggests that even Class A properties are offering deals, presenting opportunities for renters to negotiate better lease terms.
- The presence of big institutional players like Sherman signals Phoenix’s continued attractiveness for large-scale investors.
4. Sherman’s Real Estate Playbook
- Sherman Residential has a history in Phoenix:
- First entered the market in 2000 with a purchase in Avondale.
- Sold their last Phoenix asset in 2011 (Peoria).
- Currently owns 14 properties across four states.
- Their return suggests strong confidence in Phoenix’s long-term rental growth and investment potential.
5. What This Means for Local Investors
- Increased competition: More institutional buyers entering the market could drive up property values.
- Potential property appreciation: Large-scale investments often lead to neighborhood improvements and rising rental rates.
- Rental incentives: If major landlords are offering concessions (e.g., free rent), smaller landlords may need to adjust pricing or improve amenities to stay competitive.
- Phoenix remains an investor hotspot: The market continues to attract big-money investors looking for high-yield opportunities.
Final Thoughts
Sherman Residential’s re-entry into the Phoenix market is a strong vote of confidence for the city’s real estate sector. Their investment strategy highlights the demand for high-end rentals, the importance of property improvements, and the potential for long-term appreciation. For local landlords and investors, now is the time to stay competitive and leverage market trends to maximize returns.