Property Spotlight: Inside the Value-Add at Venture on Lockett

Venture on Lockett is an 18-unit community at 3325 and 3351 East Lockett Road in Flagstaff, Arizona. We acquired it in October 2025 from an owner who had held the property for more than 20 years without meaningful updates. Less than a year later, 17 of the 18 units have been fully renovated and leased, rents on the renovated units are up 57%, and the property is nearly stabilized. It's a good look at our value-add strategy at work in one of Arizona's most supply-constrained markets.

A Supply-Constrained Mountain Market

Flagstaff is a different kind of market from Phoenix, and that's exactly why we like it. The city sits at 7,000 feet, ringed by the Coconino National Forest, which means there's very little developable land and new construction is hard to bring online. Demand, meanwhile, is steady and diverse, anchored by Northern Arizona University, a year-round tourism economy, and a regional healthcare hub. The result is a tight rental market where vacancy has held below 7% and rents have kept climbing. With the median home now running around $600,000, owning costs far more per month than renting, which keeps a large share of the population in the rental pool. For a small, well-located apartment property, those are strong fundamentals to renovate into.

The Value-Add Plan

Venture on Lockett is two adjacent buildings with a mix of one, two, and three-bedroom units, most with attached garages. The prior owner had run it well but left it dated after two decades of ownership, which is the kind of situation we look for. Our plan was a full interior renovation: new kitchens, new flooring, and updated bathrooms in every unit. Because it's a smaller property that was already in decent physical shape, the work has moved quickly, and we've been able to renovate and re-lease units almost as fast as they turn.

The Renovations Are Driving Rents

The rent story here is even stronger than the size of the property suggests. Renovated units are leasing for about 57% more than their original rents. The average rent has climbed from $1,525 before renovation to roughly $2,399 today, essentially reaching the property's full-market target. On an annual basis, that takes in-place rent from about $329,000 toward a full-market run rate of roughly $511,000, an increase of about $182,000 a year once the final unit is done.

Occupancy Is Following the Work

The demand has shown up right alongside the renovations. Occupancy is up 33.3% since March, as renovated units filled quickly in a market where quality housing is genuinely hard to find. With 17 of 18 units now renovated and leased, the property is operating close to full, and the lease-up has moved faster than we underwrote it to.

What's Next

Only one unit remains. We expect to finish renovating it by fall 2026 and complete lease-up by the end of September, which would bring Venture on Lockett to full stabilization, roughly a year after we bought it. At that point the property will have gone from a dated, under-rented building to a fully modernized, fully leased one, with a rent roll to match.

Venture on Lockett is one of our smaller properties, but it's a clear example of how we work and where we look. We didn't chase yield in a crowded market. We bought a well-located building in a supply-constrained city, from a long-time owner who hadn't updated it, and we modernized it unit by unit. Flagstaff won't ever build its way out of its housing shortage the way a flat desert metro can, and that scarcity is precisely what makes a renovated, well-run apartment community there so durable. That's the kind of market, and the kind of property, we want more of.