PHOENIX/SAN DIEGO — April 23, 2025 — San Diego-based Tower 16 Capital Partners in partnership with Raith Capital Partners has successfully acquired Sanctuary at South Mountain, a 166-unit horizontal Build-to-Rent (BTR) property located near South Mountain in Phoenix. . The property was built in 2023 and was acquired for $48 million, which we believe is below today’s replacement cost and prior-peak pricing. Tower 16 and Raith will be rebranding the property to “Obsidian at South Mountain.”
“This marks our 10th acquisition in the Phoenix market and our 13th acquisition in Arizona,” said Tower 16 Co-Founder Mike Farley. “We have been studying the supply-demand fundamentals in the Phoenix market closely and have witnessed incredibly strong demand over the past year. Phoenix is a high conviction market for us and it continues to attract new job opportunities from corporate investment, expansion and relocation from more expensive markets. New construction starts are decelerating and we believe the market is poised for strong rent growth over the next five years. We are continuing to pursue opportunities in Western growth markets where we can acquire high-quality real estate at a steep discount to replacement cost and prior-peak pricing.”
“We are excited to partner with Tower 16 on another acquisition in the Phoenix market,” said Raith Capital Partners Principal Sahil Amin. “There is a strong history between the founding partners of our firms, and we are excited to continue growing the partnership. With this purchase, we are taking advantage of the opportunity to acquire a high-quality asset in a fast-growing market at an attractive basis.”
Since its founding in 2017, Tower 16 has made similar moves in markets throughout the West, having acquired over 7,500 units in Southern California, Las Vegas, Phoenix, Tucson, Reno, Albuquerque and Denver. The company seeks markets that exhibit strong rental housing fundamentals including employment growth, in-migration and limited new supply in relation to household formation. According to company executives, Tower 16 is continuing to aggressively pursue other new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
Sanctuary at South Mountain is located at the intersection of East Southern Avenue and South 40th Street with close proximity to South Mountain and the I-10 freeway, providing excellent access to Central Phoenix, Tempe and the East Valley. The property is a Class-A, Build-to-Rent, multifamily community with a mix of 1-, 2- and 3-bedroom apartments averaging 1,104 square feet. The property offers a variety of resort-style amenities including a sparkling swimming pool, a state-of-the-art fitness center, a pickleball court, walking trails and a large clubhouse. The low-density site plan features single-story and two-story cottage style units that each have their own private fenced in yards.
“The property has performed exceptionally well during lease-up. We credit the strong performance to the great unit mix featuring 80% two- and three-bedroom units and a relatively insulated pocket of Phoenix that has limited new supply. The property has a top-of-the-line amenity set with an excellent clubhouse and was extremely well designed by the developer. We are excited to acquire another BTR asset and believe the property is well positioned to serve the tenant demand in the area,” said Tower 16 Co-Founder Tyler Pruett.
Tower 16 will oversee asset management and construction management and bring in Cushman & Wakefield as a third-party property manager.
“We have been extremely focused on identifying unique lease-up and new-construction acquisition opportunities across the Southwest. We are excited to get another one done in Phoenix and continue growing our local portfolio,” said Tower 16 Director of Acquisitions Dave McClain. “We appreciate the Berkadia team and the seller team for providing us with this opportunity.”
Mark Forrester and Andrew Curtis of Berkadia represented the seller in this transaction. CBRE helped secure debt financing for the buyer, led by Maxi Leachman and Scott Peterson.
Commercial Real Estate Investment Firm Continues to Scale Portfolio of New-Construction Multifamily Properties Across the Southwest
PHOENIX/SAN DIEGO — January 8, 2025 —San Diego-based Tower 16 Capital Partners has successfully acquired Yardly McDowell, a 167-unit, Build-to-Rent (“BTR”) multifamily property located in the rapidly growing West Valley of Phoenix, AZ. The property was built in 2023 and was acquired for $46.5 million, well below today’s replacement cost and prior-peak pricing.
“This marks our ninth acquisition in the Phoenix market and our 12th acquisition in Arizona,” said Tower 16 Co-Founder Tyler Pruett. “We have witnessed record absorption over the last year and are seeing a rapid deceleration in new construction starts in the Phoenix market which will strengthen market fundamentals. Phoenix continues to attract new job opportunities from corporate investment, expansion and relocation from more expensive markets. We believe Phoenix is poised for strong rent growth over the next five years and therefore, continues to be a focus market for us. We are continuing to pursue new-construction and value-add opportunities in Western growth markets where we can acquire high-quality real estate at a steep discount to replacement cost and prior-peak pricing.”
Since its founding in 2017, Tower 16 has made similar moves in markets throughout the West, having acquired nearly 7,400 units in Southern California, Las Vegas, Phoenix, Tucson, Reno, Albuquerque and Denver. The company seeks markets that exhibit strong rental housing fundamentals including employment growth, in-migration and limited new supply in relation to household formation. According to company executives, Tower 16 is continuing to aggressively pursue other new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
Yardly McDowell is situated on a strong corner location at 91st Ave and McDowell Rd near the intersection of the I-10 Fwy and Loop 101, providing excellent access to major employment nodes throughout Phoenix. The property is a Class-A, Build-to-Rent, multifamily community with a mix of 1- and 2-bedroom apartments averaging 860 square feet. The property features a unique low-density site plan with single-story units and private fenced-in yards. The gated community has a variety of resort-style amenities including a sparkling swimming pool, a state-of-the-art fitness center, and several large community lawns.
“We’re very excited about acquiring our first BTR community. The BTR product appeals to a broad renter pool given the attractive physical attributes and tends to attract a sticky tenant base. We believe the property is extremely-well positioned to serve the growing renter demand in Phoenix and are excited to enhance the community with strategic investment in the common area amenities and landscaping at the property,” said Tower 16 Co-Founder Mike Farley.
Tower 16 will oversee asset management and construction management and will be bringing in Cushman & Wakefield as third-party property manager.
“We are thrilled to close on our third new-construction multifamily acquisition this year. We appreciate the Northmarq team and the seller for giving us the opportunity to perform,” said Tower 16 Director of Acquisitions Dave McClain. “We look forward to identifying more new construction and value-add opportunities across the Southwestern United States in 2025.”
Jesse Hudson and Trevor Koskovich of Northmarq represented the seller in this transaction. Northmarq helped secure debt financing for the buyer, led by Bryan Mummaw and Bryan Liu.
Commercial Real Estate Investment Firm Takes Proactive Approach During Challenging Capital Markets Environment
SAN DIEGO — July 15, 2024 —San Diego-based Tower 16 Capital Partners has successfully closed on a $128 million refinancing of a four-property multifamily portfolio comprising nearly 1,000 units across California and Arizona. The new fixed-rate agency loans feature five-year terms, are un-crossed and are full-term interest-only at a rate of 5.69%.
“We have been spending a lot of time figuring out ways to enhance value and drive performance across our portfolio despite the challenging market conditions. This refinancing will further de-risk our portfolio by extending our maturity schedule, reducing debt service payments, and fixing our interest rate for five years,” said Tower 16 Co-Founder Mike Farley. “Given the turbulent capital markets landscape, it was incredibly important for us to secure fixed rate financing with enough term to weather the volatility we are all experiencing today.”
The Fannie Mae agency loans were originated by Newmark’s Peter Griesinger and Chris Kramer. The portfolio included: Ardella on Chagall, a 384-unit property in Moreno Valley, California; Ardella on 67th, a 276-unit property in Glendale, Arizona; Ardella at Reche Canyon, a 104-unit property in Colton, California; and Ardella at Reche Ridge, a 110-unit property in Colton, California.
“We have been starting to see apartment demand fundamentals firm up across our entire portfolio,” said Tower 16 Co-Founder Tyler Pruett. “These are markets that we have a lot of conviction in. Absorption has been at or near record levels in the first half of 2024. We have been able to start pushing rents and manage occupancy at a healthy level, which is great to see. In this capital markets climate, we felt that it was prudent to hold and continue focusing on the operations that we can control to further drive NOI growth and value.”
Since its founding in 2017, Tower 16 has continued to grow its portfolio throughout the West, having acquired nearly 7,000 units in Southern California, Las Vegas, Phoenix, Tucson, Albuquerque and Denver. The company seeks markets that exhibit strong rental housing fundamentals including employment growth, in-migration and limited new supply in relation to household formation. According to company executives, Tower 16 is continuing to pursue new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
San Diego-based Tower 16 Capital Partners has successfully acquired The Deco at Victorian Square, a 209-unit multifamily property located in the rapidly growing Reno, Nevada, market. The project was built in 2021 and acquired for $43 million, well below today’s replacement cost.
“This marks our first acquisition in the Reno market and brings us back into Nevada where we previously owned a portfolio of 2,000 units,” said Tower 16 Co-Founder Tyler Pruett. “We are pursuing opportunities in Western growth markets to acquire high-quality real estate at a steep discount to replacement cost and prior-peak pricing. We have been trying to enter the Reno market for years and remain firm in our conviction in-migration from more expensive markets will continue, driven by increasing job opportunities in the area, low cost of living and attractive lifestyle amenities.”
Since its founding in 2017, Tower 16 has made similar moves in markets throughout the West, acquiring nearly 7,000 units representing assets of over $1 billion in Southern California, Las Vegas, Phoenix, Tucson, Albuquerque and Denver. The company seeks markets that exhibit strong rental housing fundamentals including employment growth, in-migration and a limited new supply of housing. Tower 16 is aggressively targeting other new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
The Deco is located at 955 Avenue of the Oaks in the desirable Victorian Square neighborhood of Sparks, a city just east of Reno. The property is a newly built, 10-story, podium-style multifamily community with a mix of studio, 1- and 2- bedroom apartments averaging 731 square feet. The property is in Downtown Sparks just off the I-80 freeway close to the Tahoe Reno Industrial Center, Downtown Reno, several large hospital systems, as well as outdoor lifestyle amenities.
“We are eager to build from the momentum here and continue targeting other recently developed multifamily communities,” said Tower 16 Co-Founder Mike Farley. “The Deco has performed very well and FPI Management has done a phenomenal job managing the final stages of lease-up, getting the property up to 97% occupancy during escrow. The property is extremely well built, and we plan to take it to the next level by improving critical tour path amenities and enhancing the overall tenant experience.”
Tower 16 will oversee nearly $1 million in upgrades including modernized common areas, fitness center upgrades and landscaping enhancements. The company also will add outdoor amenities including barbeques, seating and game areas.
“We have been patiently waiting for the right re-entry point in the market and are extremely grateful to Eastdil for the opportunity to acquire the property and appreciate their assistance securing debt financing during a turbulent capital markets environment,” said Tower 16 Director of Acquisitions Dave McClain. “The Tower 16 team is eager to execute the business plan with our excellent investment partner and lender.”
Jonathan Merhaut of Eastdil Secured represented the seller in this transaction. Eastdil Secured helped secure debt financing for the buyer, led by Lee Redmond and Greg Stampley.
San Diego-based Tower 16 Capital Partners, has sold a pair of multifamily assets in Tucson, Arizona, for $65,150,000 to an undisclosed buyer. The 459-unit two-pack was assembled by Tower 16 over the last 24 months with the company instituting a heavy repositioning effort to all the assets. The properties consist of Sierra Vista and La Mirada Apartments.
“We are excited to announce the successful sale of these assets to a strong and reputable buyer, who knows the Tucson market well,” said Tower 16 co-founder Mike Farley. “Upon our acquisition, both assets needed significant physical and management improvement, which we quickly implemented at the two properties. The result was an execution that we are proud of, leaving both properties well positioned to take advantage of the strong economic dynamics of the Tucson market.”
Both assets received significant renovations including the leasing offices, outdoor amenity areas and interior unit renovations on 40 percent of units. Tower 16 purchased the properties for $36 million and spent $4.9 million on improvements during the approximate two years they owned the properties. The new buyer plans to continue the renovation efforts to further improve the appeal and performance of the assets.
Sierra Vista consists of 258 apartment units located at 3535 N. 1st Avenue. The property has two pools, a new clubhouse, leasing office and gym. La Mirada consists of 201 apartment units and is located at 4415 E. Grant Rd. La Mirada has two pools, a new clubhouse with a fitness center, and a new outdoor amenity area.
“These properties were exceptional projects for not only Tower 16 but for our investors and, most importantly, the residents of our communities. Tucson has proven to be a unique market with strong fundamentals for multifamily, especially in the workforce housing space,” said Tower 16 co-founder Tyler Pruett. “The marketplace remains at the top of our list for investment as we are confident in the future of Tucson and its continued growth, in spite of the uncertain national economic outlook.”
The properties were marketed earlier this year by Institutional Property Advisor’s Tucson team who represented Tower 16 in the sale. The IPA team was led by Art Wadlund, Clint Wadlund, and Hamid Panahi
Tower 16 Capital Partners, LLC is a commercial real estate investment and management company focused on acquiring and managing value-add investments throughout the Western United States. Headquartered in Encinitas, Calif., Tower 16 was founded in 2017 by principals Mike Farley and Tyler Pruett who have over 45 years of combined institutional real estate experience with an emphasis on value-add investing. Since 2017, the Company has acquired close to 6,800 units representing $1 billion of assets under management.
Tower 16 Capital Partners has sold Obsidian on Ocotillo Apartments, a 232-unit multifamily project in Glendale, AZ, for $56.4 million. The property was purchased by Tower 16 in April 2021 for $40 million in an off-market transaction. The new buyer is SB Real Estate Partners, who is planning to further improve the property during its ownership.
“We made significant improvements to Obsidian on Ocotillo during our ownership including an entire rebrand of the community,” said Tower 16 Co-Founder Tyler Pruett. “We have now executed three roundtrip investments in the Phoenix market representing nearly $120 million of sale value.”
Obsidian on Ocotillo Apartments, formerly known as Summerhill Place, is a 232-unit apartment community located at 6801 W. Ocotillo Road in Phoenix. The property is in the Glendale submarket of Maricopa County, less than eight miles from downtown Phoenix. The property is conveniently located near the I-60 freeway and Arizona State Route 101, allowing quick access to downtown Phoenix and other parts of Maricopa County.
Obsidian on Ocotillo was built in 1986 and consists of 14 buildings situated on 8.55 acres. Common area amenities include gated access, two pools, laundry facilities, barbeques, a playground and dog park. The project is comprised of one-bedroom and two-bedroom units including fully equipped kitchens with stove/ovens, refrigerators, ceiling fans, washers and dryers. Tower 16 spent over $2.7 million in renovations and upgrades to the property during its ownership.
“Obsidian on Ocotillo proved to be a great project for not only Tower 16 but for our investors and, most importantly, our residents of the community,” said Tower 16 Co-Founder Mike Farley. “We are very happy about the outcome and are continuing to look for multifamily investment opportunities in the Phoenix market.”
Real estate broker Jesse Hudson, Trevor Koskovich, and Bill Hahn of Northmarq Phoenix advised Tower 16 on the sale.
Tower 16 Capital Partners, LLC is a commercial real estate investment and management company focused on acquiring and managing value-add investments throughout the Western United States. Headquartered in Encinitas, Calif., Tower 16 was founded in 2017 by principals Mike Farley and Tyler Pruett who have over 45 years of combined institutional real estate experience with an emphasis on value-add investing. Since 2017, the Company has acquired close to 6,800 units representing $1.2 billion of assets under management.
