Underwriting Summary
Cap Rate Stress Test
Valuation impact of cap rate movement on a NOI-constant basis.
| Scenario | Cap Rate | Implied Value | Equity Impact |
|---|---|---|---|
| −50bps | 5.70% | $13.5M | +8.8% |
| Base Base | 6.20% | $12.4M | 0.0% |
| +50bps | 6.70% | $11.5M | -7.5% |
| +100bps | 7.20% | $10.7M | -13.9% |
DSCR Rate Sensitivity
Coverage ratio under interest rate shock scenarios.
| Rate Scenario | DSCR | Status |
|---|---|---|
| Current Rate Current | 1.28x | Pass |
| +100bps | 1.14x | Marginal |
| +200bps | 1.03x | Marginal |
Threshold: 1.25x (agency standard) · 1.0x (minimum acceptable)
Rent Comps
Comparable properties within the submarket. Market rent per unit/month.
| Address | Market Rent | Year Built | Distance |
|---|---|---|---|
| 1600 W Indian School Rd | $1,320/mo | 2011 | 0.6 mi |
| 2750 N 44th St | $1,280/mo | 2007 | 1.3 mi |
| 3100 E Camelback Rd | $1,395/mo | 2016 | 1.8 mi |
Sample comps generated for illustration. Live deals show actual market data from CoStar/Rentometer.
Risk Flags
- Phoenix multifamily absorption slowing after 2021–2023 run-up
- LTV at 72.5% leaves thinner equity cushion on a value decline
- Camelback corridor foot traffic dependent on office occupancy recovery
- Loan maturity in 24 months — refinance risk if rates stay elevated
Investment Rationale
The Phoenix deal at 82 reflects a sound income profile against a backdrop of macro caution. A 6.2% going-in cap rate on 148 units is a reasonable entry in the Camelback corridor, which has historically commanded a 25–50bps premium to West Valley product due to proximity to Class-A employment nodes. NOI is well-supported at 92% occupancy, and the DSCR of 1.28x provides adequate coverage at current rates.
The score is penalized 6 points for a combination of factors: LTV at 72.5% is above the preferred 70% ceiling, and the Phoenix MSA is digesting roughly 14,000 new apartment units in 2024–2025. The Camelback submarket in particular is seeing some softness in Class-B product as newly delivered Class-A buildings compete with aggressive concessions. Underwriting a flat-to-slight NOI decline in year one is prudent.
For a 5–7 year hold, the Phoenix thesis remains intact: population inflows, water availability relative to alternatives, and a diversified employment base all support long-term rent growth. The deal is appropriate for a buyer with an institutional basis and the operating platform to push occupancy back to 95%+, which would lift NOI ~$45,000 and revalue the asset at approximately $13.1M on current cap rates.
This is a sample analysis. Live deal rationale is generated by the Clearfield agent at deal ingestion using real financial data.
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