Apr 25, 2022
Celebrating its 20th anniversary this year, Scottsdale-based MC Cos. has big plans on its drawing board.
In honor of its 20th anniversary, the company is launching Operation 25K, an initiative to grow the MC portfolio to 25,000 units by 2029 and nearly double the company’s staff to more than 400 employees over the next two years. The company currently employs 240 people and owns and operates about 7,000 units within 28 apartment communities in Arizona, Texas and Oklahoma.
Kicking off that goal is the construction of a $39.6 million apartment community north of Tucson.
Plans also call for breaking ground in June on an $80 million apartment community being planned on Lake Pleasant Parkway in Peoria. With 280 units, that project will be called The Place at Camino A Lago.
Looking for land in Flagstaff for another project, the company also is in escrow to acquire about 500 units in Arizona and Austin, Texas, said Ken McElroy, co-founder and principal of MC Cos.
The goal is to buy about 2,500 multifamily units each year in Arizona and Texas, said Ross McCallister, co-founder and principal of MC Cos.
Since 2001, MC Cos. has transacted on $3.8 billion in multifamily assets.
As more investors become interested in acquiring multifamily properties in Arizona, it has become more competitive to find good deals.
McElroy added, “Everything we own we are grateful for. We’re very active, but at the end of the day, it boils down to the math. Either the math works or it doesn’t. If it doesn’t work, we pass.”
Spending about $200 million on new construction and acquisitions last year, McElroy and McCallister expect to spend about the same this year.
“We have $48 million in renovations going on right now and we have 500 units in escrow that’s about $80 million we’ll close on in the next 90 days,” McElroy said.
The demand for apartments is strong, McCallister said.
“We don’t expect that to change,” he said. “The challenge is interest rates, inflation and rents.”
As the company continues to grow, there will be a need to hire more people to support all areas of the vertically integrated company, including investment, development, construction and management.
Last fall, they hired David Mannion as chief operating officer. Before joining MC Cos., he served as head of capital markets for a $15 billion, publicly traded real estate investment trust.
Phoenix Business Journal