I’m excited to share the newest addition to our multifamily portfolio at Blue Field Capital: VALO at Desert Haven.
We recently acquired this property in Utah, and we are conservatively projecting an average of 8.05%+ cash on cash return to investors, with a 14.3% IRR over the life of the investment.
As the development is well underway and with units set to become available this Spring 2024, we have full confidence that this will prove a strategic and high-performing asset.
Utah’s burgeoning potential
VALO at Desert Haven is situated in St. George, the county seat and biggest city in Washington County, Utah. Home to over a hundred thousand residents, St. George has been consistently named among the fastest-growing US cities in the last 20 years. The steady influx of new residents is not at all surprising because there is much to love about the area. For one, there’s the pleasant warm, dry climate year-round. When paired with cheaper tax rates and lower cost of living, the combination easily attracts residents from similar albeit more expensive neighboring states like Nevada, Arizona, and California.
The job market is also influencing inbound migration. The city’s 2.5% unemployment rate sits well below the 3.4% national average, and job opportunities are still on the rise. From 2017 to 2022, job growth grew by 23.8% — nearly tenfold the national average of 2.4%.
As a data-driven firm, our experience with comparable long-term statistics has been very favorable for past multifamily ventures. With all the upward arrows St. George has been flashing, there was no question for us that it was an area worth our investment.
Tapping into future demand
Our market study revealed even more reasons to bank on St. George. Its potential is only expected to grow from here! Based on our findings, Washington County will continue to grow exponentially, with 80K+ new residents forecasted within this decade alone. Naturally, this means more demand for new housing. We anticipate the population upswing in the next four years to spur demand for over 4K new rental units.
In fact, demand is already outpacing supply in Utah. For the first time in 40 years, the number of new households is growing faster than the number of newly constructed homes within the state.
Current and projected market conditions indicate that a shortage will persist through 2027. These stats are a precursor to continued resilience and high tenant demand in the build-to-rent (BTR) community and single-family home (SFO) space in the St. George market.
What’s more: VALO at Desert Haven sits in Washington Fields, one of the most sought-after submarkets in the county. Our strategy is to leverage wider market trends with specific submarket conditions to swing occupancy rates. Knowing that the Washington Fields submarket is a hotspot because of its picturesque homes, good schools, and high-income residents, we designed VALO at Desert Haven to appeal to clients looking to buy into the comfortable lifestyle typified by the area. VALO at Desert Haven homes have spacious floorplans that feature a large master bedroom and master bathroom, as well as a fully fenced private backyard. The construction is also top-of-the-line, boasting the best “for-rent” finish quality in St. George. With these features, we expect the community to prove attractive to renters.
All these combined give us the confidence that VALO at Desert Haven will become a first-rate BTR housing option in a uniquely promising area.
Our partnership with the growing VALO brand
VALO at Desert Haven is our latest partnership project with the outstanding team at AIM Development, second to our successful VALO on Vine venture. AIM Development is a trusted partner for Blue Field Capital, especially given their development and construction expertise.
The Desert Haven site in St. George will be the fourth addition to the VALO brand, a series of townhome rental communities in the Mountain West. The VALO series effectively captures the growing market segment of BTR communities across Utah and Idaho. We couldn’t be more thrilled to be part of the continued expansion of the VALO brand.
Initial units of VALO at Desert Haven will become available this Q2 of 2024, with all construction slated to finish by Q3 of 2024. I’m proud of the amazing work Blue Field Capital and AIM Development have delivered on this project so far, and I can’t wait to see VALO at Desert Haven grow into a thriving community of happy residents in St. George.