Blackstone’s stake in Arizona real estate reaches $898 million

New York-based Blackstone Group, one of the world’s largest real estate investors, recently purchased six apartment complexes in Arizona, securing a deep stake in the state’s real estate market. With the addition of six apartment complexes worth $311 million, Blackstone retains a total of $898 million in Arizona real estate.

Their recent purchase is part of a ten year investment in Arizona’s real estate market that began during the housing crisis. During the crash, Blackstone acquired millions of dollars in foreclosure homes. In April of this year, Blackstone purchased the famous Arizona Biltmore Resort, and in the following two months, they spent $120 million on nine mobile-home parks in Mesa and Apache Junction. Blackstone wasted no time after the mobile-home purchase, buying a Glendale apartment complex for $64.5 million in the same month.

The six apartment complexes spanning from Chandler to Surprise include: Luminere in Chandler, Sierra Canyon in Glendale, Waterford in Peoria, Finisterra in Tempe, Sierra Foothills in Phoenix, and Stadium Village in Surprise.

Blackstone’s interest in Arizona’s real estate market is likely based on population projections. A 10-year forecast released by the Office of Economic Opportunity predicts an additional one million residents will move to the state by 2026.

Arizona’s population growth rate is surpassing state and national averages, according to Jim Chang of the Office of Economic Opportunity. “The national average is about 0.7 percent and we’re at about 1.5 percent,” he said. “The Arizona population in most years has outpaced the national population growth.”

The value of real estate in Arizona is increasing, and population projections suggest that this trend will continue. Blackstone has targeted areas with favorable population projections, specifically Phoenix, Peoria, and Surprise.

Based on the Maricopa Association of Governments’ 35-year plan, Phoenix’s population is expected to increase by more than 43 percent, reaching a population of 2.19 million by 2050. Peoria’s population is expected to swell by 83 percent, and Surprise is presumed to hold nearly triple the number of residents.

Arizona homebuilders have been working to meet the housing demands of the growing population. This year, Phoenix homebuilding hit a record high, with the value of homes increasing by 50 percent since 2010. Like Arizona’s homebuilders, Blackstone is bracing for new residents and an increase in the value of their real estate.