“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 “ AND “The major fortunes in America have been made in land.”- John D. Rockefeller. 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
MULTIFAMILY | 19 Sep | JESSE A. MILLARD
The future of Phoenix is looking packed, as it is expected to need 150,302 new apartment units by 2030 to keep up with demand, according to a study released in late June.
Phoenix will need to add 10,736 apartment units per year on average in the coming years to meet this projected demand, according to a study released by the Arizona Multihousing Association (AMA) and National Apartment Association (NAA).
The Phoenix area’s accelerating population growth, a rising number of Baby Boomers opting for the lock-and-leave lifestyle that apartments offer and Millennials staying in apartments longer are fueling this expected demand, says Courtney Gilstrap LeVinus, interim president and CEO of AMA.
“I think people are generally surprised there is such a need (for apartments),” Gilstrap LeVinus says. “When you go in and look at the numbers, and really recognize the demographic shift that we’re seeing, it starts to make sense.”
Arizona is also growing, especially Maricopa County. In March, the U.S. Census Bureau announced that Maricopa County was the fastest growing county in the country last year, adding 222 people per day.
To meet this projected demand, it looks like Phoenix-area developers will have their work cut out for them.
Currently, Colliers International is forecasting that about 10,500 apartments will come online this year in Metro Phoenix. That number is up from the average of about 6,300 apartment units per year from 2014 to 2006, says Pete O’Neil, research director at Colliers International’s Phoenix office. But 2017’s projections will likely hit a 30-year high for the market, he adds.
For this year, it looks like Phoenix is on track to meet the report’s projected demand, but that might not be the case going forward.
“I would be very surprised if this level of new construction is able to be sustained in the next few years,” O’Neil says.
Although it’s too early to come up with a 2018 forecast, Colliers has its eye on about 5,000 apartment units that are under construction right now that will be move-in ready next year, O’Neil says.
The AMA report also notes that apartments of all types will need to be built to meet this projected demand.
There could be a problem with meeting the full needs of the projected demand. The current trend when it comes to new apartment developments is luxury, amenity-rich assets in urban communities.
“Many of the new developments are mid-rise, in popular submarkets with amenities in the complex with nearby dining and entertainment options,” O’Neil says. “The average rent in new construction is 40 to 50 percent higher than the current average market rent. Affordable and mid-range are not a large segment of new construction.”
The demographic shifts that the AMA is seeing might not make this so much of a problem, though. Retiring Baby Boomers who may be selling their homes for an apartment will have cash to spare for these amenity-rich communities.
Meanwhile, Millennials are getting married much later in life, and aren’t moving into single-family homes as young as previous generations, Gilstrap LeVinus says. And everyone knows how much Millennials love easy, amenity-rich types of apartments that are within urban cores, which is where many of these luxury apartment developers are cropping up.
Gilstrap LeVinus says the AMA is certainly seeing the national trend of urbanization where many generations are leaving the suburbs for downtown regions.
“People don’t want to be in their car at the beginning of the day, or the end of the day for a couple of hours,” she says. “They want to be close to amenities, being in the same area as the neighborhood.”
What could stop us?
The Multihousing Association’s national report calls for more incentives to be created and for restrictions to be loosened in order to help developers meet this demand.
Arizona has a healthy climate for apartment developers, Gilstrap LeVinus says. “We’re still able to build very affordable units, because our land costs are not what we see in other urban cities,” she notes.
There is still a desire to move projects along faster, she mentions, “Anything that we can do to work with municipalities to get projects to the finish line, without shortcuts is critical.”
VELAIRE AT ASPERA: Developed by P.B. Bell, the 286-unit complex marks the first new multifamily community to be built in the West Valley in roughly 14 years, which was the result of a pent-up demand for a new, high quality apartment community in the area.
Developers looking to fill this expected demand will need to find a balance of creating projects quickly while bringing lasting assets to the Phoenix area.
There are tools that exist to strike that balance of fast pace projects with no shortcuts. The City of Phoenix has a program that allows developers to use city-approved third-party certification.
“Architects and engineers can certify the plan, so (developers) don’t have to go through every single step with the City of Phoenix,” Gilstrap LeVinus says. She mentions several local Multihousing Association members have taken advantage of Phoenix’s program to get projects moving at a faster rate.
“Again, it’s striking that balance to make sure that all of the i’s are dotted, t’s are crossed, neighborhoods are happy with the development that’s going in, and the project goes through the process as it should,” she says.
Is meeting this demand possible?
Meeting this apartment demand is going to be a challenge, Gilstrap LeVinus says. A lot of the developments that will meet this demand are being built in the Valley’s urban cores, like Downtown Phoenix, Gilstrap LeVinus explains, but we could start seeing apartments spread out to other regions, like the West Valley and rural Arizona.
Job growth in the state and in the Valley is very important to whether or not this demand will even exist. The AMA is tied with the Arizona Commerce Authority and other organizations when it comes to working to bring more jobs to the state, Gilstrap LeVinus says. More jobs, means more apartments, she adds.
And it’s very important to businesses that may move operations here that there is adequate housing at all economic levels for employees, Gilstrap LeVinus says.
TOMSCOT: Located near Scottsdale’s upscale shopping and entertainment district, the 278-unit luxury multifamily community boasts unique amenities such as a golf simulator, dog park and rock climbing wall just to name a few.
Annual job growth is the most correlated metric to annual apartment demand, says John Carlson, president at Mark-Taylor Residential, which operates more tha $2.5 billion in multifamily real estate investments.
According to Mark-Taylor Residential’s analysis, the Valley is approaching the middle point of the current multifamily expansion, he says.
The apartment market has remained in balance this cycle, when job growth from 2011 to the present and historical absorption are taken into account, Carlson says.
Looking ahead, it remains to be seen if adding 150,302 new apartment units by 2030 to meet expected demand will be a reality.
“We all know that job growth and therefore apartment construction are not linear, they are cyclical and based largely on unpredictable factors like monetary policy and the availability of debt,” Carlson says. “With that said, looking ahead and in consideration of that cyclicality, our best estimate would be that approximately 55,000 to 70,000 new apartment units are built from 2018-2030.”
SEE IT ALL: https://azbigmedia.com/phoenix-needs-150000-apartment-units-can-build-time/
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
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 November 3, 2017 / Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH October 27, 2017 / Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH October 20, 2017 / Phoenix Arizona Metro.
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
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2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
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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.
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Walter Unger CCIM
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