“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net. VIEW ALL OF WALTERS LISTINGS.
5110 N 40th Street, Ste. 110
Phoenix, Arizona 85018
Tel: 602 445 4141
Apartment Owner’s Newsletter / Q4 2017 / Kasten Long Commercial Group
Q4 2017 / Kasten Long Commercial Group.
The KASTEN LONG COMMERCIAL GROUP (KLCG) has focused on apartment brokerage and research in metro Phoenix since 1998. Our agents have brokered more than 1,000 communities with gross sales more than 1 billion dollars. The market research includes: weekly updates on apartment sales, in-depth quarterly apartment newsletters, tracking vacancy/rental rates/concessions by each submarket, and compiling updated data on all current, planned and prospective new apartment construction. Our knowledge, negotiating/escrow expertise and “client first” dedication equates to the best service possible for all apartment owners and buyers.
KLCG Partnership with the AMA.
As part of our partnership with the Arizona Multihousing Association (AMA), KLCG-AMA and the East Valley Partnership (EVP) will have our first 2018 event on January 31, at the Mesa Arts Center in downtown Mesa. The event “Where to Invest and When to Sell” will highlight the possibility of the PHX East Valley becoming the fastest growing area in the US, the five areas to have the strongest employment growth (JOBS), and where the current and planned Light Rail offers significant investment opportunities across the Valley. Our events are open to everyone. For more information please contact Jim Kasten, CCIM (jim@KLCommercialGroup.com, 602 677 0655). See also: www.KLCG-AMA.com.
41,316 Units in New Apt. Const. Pipeline
There were 6,543 units completed in 2017 in 29 projects. This was 760 units and 4 projects less than projected, due mostly to labor shortages. The forecast for 2018 is 9,221 units in 42 projects. Currently there are 17,089 units under construction in 65 projects, 11,525 units planned and 12,702 units prospective. Specific details are available upon request. Site availability, tougher financing requirements plus increasing land and labor costs are keeping new construction at a sustainable level.
Occupancy/Rents Strong But Leveling
At mid-year, occupancy started dropping slightly for all class properties from a high of over 95% earlier in the year. The drop leveled off over the past few months with a net decline of about a half percent. Over the past three years, rental rates for “A”, “B” and “C” class properties have increased 19%, 22%, and 24% respectively. This increase has been steady except, over the past three months, rental rates have leveled off or slightly decreased. With the continued new apartment construction, we expect added concessions and a down-tick in occupancy and possibly rental rates in areas with a concentration of new construction.
5110 N 40th Street, Ste. 110
Phoenix, Arizona 85018
Tel: 602 445 4141
The Metro Phoenix Apartment Market (2017 Year-end & Q4)
There were 83 regular apartment sales (10+ units) in Q4 and a total of 314 for the entire year. While this activity is strong, it was less than in 2015 (350) and in 2016 (390). The decrease was not due to a lack of buyer demand, but simply from a reduced amount of available properties for sale that make sense for acquisition. Roughly 23% of the total 2017 sales had at least one leg using a 1031 exchange. So, it’s significant that the 1031 tax deferred exchange ability remained intact with the new tax laws.
How long can this RE cycle continue before we have a correction?
The short answer is that we expect the metro Phoenix apartment market to continue to be strong for at least several more years. There are many reasons for this, but owners should be cautious going forward. We’re sure that everyone appreciates that Real Estate is cyclical and since 2010, we have been in a strong apartment market with rents and values now at unprecedented levels. In the past, our market has been driven by the US. But in recent years, globalization now plays a much stronger part, especially from foreign investors, currency turmoil and unstable governments. If you have built up equity that you need for the future, just be careful.
Here are some of the reasons to justify the continued strong market. New apartment construction is back to pre-recession levels with occupancy remaining strong in all class properties. Occupancy is driven by population and population is driven by JOBS. Out of 182 cities in the US, WalletHub.com ranks Chandler, Scottsdale, Peoria, and Gilbert in the top five cities as “Best Places to Find a JOB.” Peoria, Chandler and Gilbert are in the top three for “Highest Employment Growth.”
RE cycles just don’t occur, they are driven by something. Overbuilding is an obvious reason. But in the case of the downturn in 1986, the cause was the new tax laws that essentially eliminated the huge write-offs from property depreciation. The recently passed 2018 tax law, however, should be a plus for apartment owners. A few of the highlights include: mortgage interest still deductible, capital gains reduced (35% to 21%) and changed from 1 to 3 years holding period, 1031 tax deferred untouched and more favorable tax treatment to REIT holders.
At some point, we expect millennials to see the merit of creating wealth via home ownership. However, the fact that the standard deduction for a married couple has been increased to $24,000 will keep some folks renting a bit longer. The Tax Credits for Affordable Housing Projects now have less value due to the reduction in the capital gains tax. The single-family housing market may come into play, especially if more houses are converted to rentals. From the front page of this newsletter, note that rental rates and occupancy have started slipping. Since rents determine value and if rents have peaked, values may also be at the top of the market.
Something to watch in 2018 is the availability of apartments “for sale.” With the high occupancy valley-wide, many owners are enjoying strong rental income and the ability to be more selective with their tenants. As such, the thought of selling is not on the top of their list. Even with 1031 laws still in place, finding a suitable replacement property will be difficult. With a decreased supply of product, if the demand continues prices may continue to escalate. While this sounds good, it may create a negative result. Any hiccup in rents may cause loan defaults, banks increasing the lending criteria and overall values declining.
Just to be clear, there are many positives to support the continued strong market. But real estate has always been cyclical and there are several issues that may cause some correction in the near term.
Kasten Long Commercial Group: Scott Trevey, CCIM (480 205 0862), Linda Fritz-Salazar, Assoc. Broker (602 989 9487), Jim Kasten, CCIM (602 677 0655), Jan Long, CCIM (602 434 9882), Arvle Knight, CCIM (602 885 8000), Walter Unger, CCIM (520 975 5207), John Locke (480 432 7179), Jon Coffen (602 653 3600), Chris Norton (480 559 9775) and David Flower (303 520 8545).
SEE IT ALL in pdf, CLICK BELOW:
Apartment Owner’s Newsletter Q4 2017 Kasten Long Commercial Group
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
Timeline of Arizona from 900 BC – 2017
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
PLEASE CALL ME 520-975-5207 OR E-MAIL ME walterunger@ccim.net
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
WEEKLY APARTMENT CLOSING UPDATE THROUGH January 19, 2018/ Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH January 12, 2018/ Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH January 5, 2018 / Phoenix Arizona Metro.
8 Reasons You Should Invest in Land
Timeline of Arizona from 900 BC – 2017
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
ARIZONA FACTS – YEAR 1848 TO 2013
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
Click here to View My Listings and Profile
Click here to find out what is a CCIM:
Click here to view my website:
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Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
1-520-975-5207
Check out my professional profile and connect with me on LinkedIn.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
Fax: 602-865-7461
Reasons to Consider me for Commercial Referrals
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The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.