There is a pocket of the Phoenix metro where 1980s and 1990s vintage multifamily is trading at or below land basis. Not distressed product with deferred maintenance and code violations — functional, occupied, cash-flowing apartments in submarkets with population growth that rivals anywhere in the Sun Belt.
The submarkets are Surprise, El Mirage, and pockets of west Glendale. And the pricing disconnect is real.
What's happening
Sellers in these corridors are motivated by a combination of rate-lock expirations, deferred capex decisions, and the simple math of operating 30- to 40-year-old product at today's insurance and property tax levels. Many of these owners bought in the 2018–2021 window with floating-rate debt, rode the rent spike, and are now facing refinance quotes that don't pencil at current NOI.
The result: trade volume is picking up at basis numbers that would have been unthinkable two years ago. We're seeing $55,000–$75,000 per unit for product that would cost $180,000+ per unit to build today.
Where the rent comps work
The West Valley is not a monolith. Within a 15-minute drive radius, achievable rents can swing by $200/month depending on school district, proximity to Loop 303 employment corridors, and vintage/condition of the competitive set.
- Surprise (north of Bell Road): Class B rents are holding at $1,350–$1,500 for 2BR product. Occupancy above 93%. New supply is limited — entitlement timelines and utility hookup delays have pushed deliveries out to 2028.
- West Glendale (south of Peoria Ave): More competitive. Rents are softer at $1,150–$1,300, and there's Class A lease-up product within a mile pulling concessions. The basis play works here only if you're buying at $55K/door or below.
- El Mirage: Thinly traded but improving. Infrastructure investment along Dysart Road is creating a commuter corridor that didn't exist five years ago. Early movers are getting $60K/door for product that rents at $1,200.
Where they don't
Anything south of Camelback on the west side is a different story. Older Maryvale-adjacent product trades cheaply for a reason — the rent ceiling is real, tenant quality is inconsistent, and institutional exit liquidity is limited. Buyers chasing sub-$50K/door pricing here are buying a management problem, not a basis trade.
The capital stack
Lenders are cautious but active. Agency won't touch most of this product due to vintage and condition, but regional banks and credit unions are quoting 65–70% LTV at SOFR + 225–275. Bridge lenders want the value-add story but are pricing rate caps into their sizing, which compresses proceeds.
The sweet spot: a 5-year bank loan with 12 months of interest-only on a clean property at $65K/door that cash-flows from day one. No heavy lift, no bridge, no rate cap headache.
Our take
The West Valley basis trade is not a secret for much longer. Institutional capital is starting to map these submarkets, and the bid-ask spread is narrowing. If you're an operator who can underwrite at $65–75K/door, manage the property in-house, and hold for five to seven years, the risk-adjusted returns are among the best in the Phoenix metro right now.
We're actively advising buyers in this corridor. If you want our underwriting on a specific submarket, reach out.
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