Chicago firm buys Mesa apartments as Phoenix market sees renewed interest

By Angela Gonzales

Apartment investors are turning their acquisition lens back to metro Phoenix as financing rates decline and supply burnoff is on the horizon.

Chicago-based Rockwell Property Co. is back in the metro Phoenix market, paying $33 million for a 210-unit apartment community in downtown Mesa.
Entering the market in 2019, Rockwell Property bought five multifamily assets in the metro before returning its focus back to the Midwest, said Jason Fishleder, a principal at Rockwell Property.

"With volatility in the capital markets and oversupply in the Phoenix market, we decided to focus back in the Midwest," he said. "We made a recent decision to refocus back in Phoenix in light of the more clear value resetting."

A more stable market with supply burnoff on the horizon creates an opportunity to buy multifamily assets in metro Phoenix, he said.

Zach Haptonstall, CEO and co-founder of Scottsdale-based Rise48 Equity, also recently bought a Mesa apartment community for $24.25 million.

"This is our first acquisition in over 2.5 years in the Phoenix market, due to high interest rates, high new supply of apartments and very limited inventory," Haptonstall said.

Scottsdale-based Rise48 Equity paid $24.25 million for this 154-unit apartment community in Mesa.
Rise48 Equity

Rise48 Equity has purchased more than 20 assets totaling more than 4,500 units in Texas and North Carolina the past three years as it shifted away from Phoenix, he said.

"Going forward, we are bullish on the Phoenix market due to supply of new housing projected to be significantly absorbed the next 24-36 months," Haptonstall said. "We are looking for more Phoenix opportunities."

Rise48 Equity currently owns 30 properties totaling nearly 6,000 units in the Phoenix market.

"The market is still slow with limited inventory and limited transactions, but we are hoping that changes as interest rates continue to reduce and supply gets absorbed," Haptonstall said.

Cap rates are expanding, also signaling a time to buy in the metro, Fishleder said.

Lower interest rates rekindle apartment deals

Peter O'Neil, national director of research for Northmarq, said a decline in financing rates are capturing investors' attention.

"One thing we're seeing has been a greater number of older properties selling, and those often — but don't always — trade with higher cap rates than the newer buildings that dominated the investment mix in 2024," O'Neil said. "We haven't seen these trades really push our averages significantly higher to this point."

Even if cap rates remain the same, lower lending rates could help make it easier for buyers to underwrite new acquisitions, O'Neil said.

Northmarq is showing about 27,700 multifamily units currently under construction, down about 35% from the peak total in 2023.

"Multifamily permitting volumes are also down, which means the development pipeline should thin further in the coming quarters as deliveries outnumber starts," O'Neil said. "Completions and absorptions to this point in the year are very closely aligned — each is over 13,500 units."

Rockwell's purchase of the 210-unit Cimarron Apartments is its first in Mesa.

Built in 1985, Cimarron is one of the few garden-style communities in that immediate area.

The purchase includes adjacent vacant land, which will be used to build 30 to 70 more rental units, said Jason Fishleder, a principal at Rockwell Property.

"The plan is to grow with the market," he said. "We're planning to just grow organically."

With six properties totaling more than 1,000 units in metro Phoenix, Fishleder said he plans to continue purchasing apartment assets in the metro.

"We're optimistic about the multifamily market in Phoenix in the near term as the market absorbs all the recent construction," Fishleder said.

Final Thoughts

Investor confidence is returning to metro Phoenix’s multifamily market as interest rates decline and new supply levels begin to stabilize. Chicago-based Rockwell Property Co. and Scottsdale’s Rise48 Equity are leading this renewed activity with major acquisitions in Mesa, signaling optimism for long-term growth. Analysts note that lower financing rates, expanding cap rates, and a thinning development pipeline are creating more favorable conditions for buyers and setting the stage for steady market absorption through 2026.