Phoenix-based Suncrest, which has developed 24 master-planned communities on 4,100 acres since 2016, has entered the wildly popular build-to-rent sector.
A newly created Zora Living brand is being unveiled at its first build-to-rent community in Phoenix. Called Zora Encanto, the $33 million development will include 109 single-family rental homes on 10 acres at the southeast corner of 83rd Avenue and Encanto Boulevard in west Phoenix. “We’re just getting started,” said Mike Koch, managing partner who co-founded Suncrest with Sean Cooney. “We’re looking forward to growing that component of the business.”
While Suncrest has sold engineered lots to builders for two other rental communities in Buckeye and Maricopa, it has been focusing build-to-rent development in the Carolinas and Texas, Koch said. While the company is getting into the BTR sector, 85% of its business is still in the development of master-planned communities that feature for-sale homes. “We are in the land business,” Koch said. “Build-for-rent is another application for land. With the housing shortage across the country, there’s a need for both for-sale and for-rent. We’re trying to fill the void for both.”
Koch said he’s looking at building rental divisions with Suncrest’s existing master-planned communities in Nashville and Charlotte. He’s also planning one in Tennessee. “We’re looking for land opportunities for master-plan opportunities in Phoenix for sure,” Koch said.
He said he’s negotiating contracts for two parcels in Phoenix that are within Loop 101. If all goes as planned, he would have two more rental communities built by the end of 2025. Meanwhile, the Zora Encanto community is in pre-leasing, with monthly rents averaging $1,950 for one- and two-bedroom homes.
Amenities include what Koch calls a “resort-inspired pool,” a small cabana, a fitness center that includes a sliding garage door to a yoga lawn and open space for gathering areas. Each of the homes will include 10-foot ceilings, smart home technology, stainless steel appliances, higher-end finishes, open concept kitchens with pantries and doggie doors leading to large, private turf backyards.
On average, the back yards at Zora Encanto are roughly 600 square feet, which Koch said is twice the size of other rental communities. “Some of our biggest backyards are 1,200 to 1,500 square feet,” Koch said. The private backyards include turf, plantings, pavers and are surrounded by white vinyl privacy fencing.
“Phoenix is ground zero for standalone rental communities,” Koch said. “We learned from the best — Christopher Todd Communities and NextMetro. There are a lot of good groups doing a lot of good things. We focused on land closer in town within a mile of major transportation routes and major employment. We wanted to focus on the outdoor experience. The big backyards were something we wanted to market as a little bit different than most.”
Mike Mancini, president of Sodella Construction, is building Zora Encanto using HercuTech’s HercuWall technology. Using HercuWall to build these homes can help residents lower their energy bills by up to 40%, Koch said. “Our plan for all the communities we build in Phoenix is to use HercuWall,” he said.