What Prompted Hamilton Zanze to Sell Big

Investors are willing to spend big for apartments here, the Hamiton Zanze co-founder tells us. "Right now, it's definitely a seller's market," he says. Which is perfect for Tony's business plan; he says his firm's goal is always a three- to five-year hold period, which these apartments fall into. (Colliers' Cindy Cooke, whom we spoke with last week, will broker the deals.)

But that doesn't mean Hamilton Zanze isn't opening its own wallet. Tony says it's under contract to pick up Los Arboles (with NY Life) in Chandler for an undisclosed sum. And it looks to acquire $250M in properties this year, mainly in Nevada, Arizona, and SoCal. Even with today's pricing, if you can pick up an apartment around a 6% cap and sell at 5.5% cap, you're still making money, he says. Join Tony and other top experts at our Phoenix Multifamily and Condo Revolution event this Tuesday, Sept. 30 starting at 7:30am. Great networking too! Sign up here.

What's BH Properties' Steve Jaffe's favorite Shasta flavor? Grape. But he especially loves empty Shastas—warehouses, that is. He's fresh from his firm's purchase of 301 S 29th St in Phoenix, a 63k SF warehouse that was formerly used by Shasta for $1.9M, all cash. What's notable about the purchase: While other investors and developers are focused on big boxes with 30'-plus ceilings, BH went the opposite way, snapping up a product that could be viewed as obsolete for tenants. But “we don't use the word obsolete in our portfolio,” Steve says. Historically, it hasn't had a problem leasing property with reduced ceiling heights. "It's not something everybody needs. And we offer it at a cheaper rate.”

BH doesn't just invest in industrial; it invests in value-add and distressed properties it believes it can turn around. Most recently, as we reported here, BH purchased Ross Plaza, a 65k SF neighborhood center for $3M. But Steve says finding value-add is difficult today, especially in multifamily, where capital is pushing prices up and caps down. “The properties are still value-add, but the pricing is not,” he says. “We're not only seeing this in Phoenix, but we're seeing this in a lot of places where we're back to buying pro forma.” And that means BH is considering selling some of its multifamily holdings in Phoenix. It's too early to say what, Steve says, but the firm does own a dozen properties in Arizona.