INDIO, CA — Indio is one of the most populous cities in the Coachella Valley, and there is an increasing amount of activity in the area because of growing festival activity, the Mogharebi Group’s president Alex Mogharebi tells GlobeSt.com. The firm recently completed the sale of Mountain View Cottages, a 311unit apartment community located on Arabia St. here, on behalf of the buyer, a Simi Valleybased private investor.
The property sold with multiple offers for $15.5 million. We spoke with Mogharebi about the Indio multifamily market and what tenants and investors in this market seek.
GlobeSt.com: How would you characterize the Indio multifamily market?
Mogharebi: Indio is also the most populous city in Coachella Valley. It has a population of more than 85,000 people that is expected to rise to more than 140,000 by 2030, reflecting an annual growth rate of almost 6% per
year that is significantly above the national average at 1%. Multifamily properties represent a relatively small market share at approximately 25% of residential units. The Indio submarket comprises mostly workforce
housing, senior housing, affordable housing and shortterm rentals (for snowbirds). There is increasing amount of activity in the area because of growing festival activity. There is also a secular growth trend in the area fueled by the aging Baby-Boomer population that finds Indio attractive due to its relative affordability and its warm weather.
GlobeSt.com: Who are the typical multifamily tenants there, and what are they seeking in an apartment?
Mogharebi: Workforce tenants comprise the largest portion of the market. They are employed mostly in the retail, education, construction and leisure sectors. These tenants like a functional design and a large unit size that can accommodate a family at a reasonable price. Unit amenities such as washer/dryer and multiple bathrooms and common-area amenities such as a swimming pool and fitness gym are in demand as well.
Seniors are typically retired and have their primary residence here, while short-term rental tenants or live within three hours of the area and have second homes here. They like discretionary finishes such as granite countertops, while a large unit size is less important.
GlobeSt.com: What does the investment market there look like?
Mogharebi: Recently, Indio has been a strong investment market due to increased demand from the growing number of festivals here that include the Coachella Music Festival, Stagecoach and Desert Trip (the newest addition). These events attract more than 12 million visitors annually, who generate more than $4 billion per year and employ more than 19,000 people here. Due to the aging Baby-Boomer population, there is also the secular growth trend in senior housing. These new demand drivers represent a shift from the old normal, where Indio was a slow-growth market that attracted investors seeking higher yields. It now represents a solid growth opportunity in addition to providing value.
GlobeSt.com: What else should our readers know about the Indio multifamily market?
Mogharebi: Despite the increased investment demand, Indio still offers investors an opportunity to acquire properties at a lower price on a pound-for-pound basis and still receive higher yields than are available in the primary markets to the west. There are approximately 25 million people within a 2.5-hour drive of Indio, making it a convenient getaway and retirement area. Thus, Indio’s long-term growth rate is stronger than average due to the expected growth in retirees and vacationers.