PHOENIX—Tyler Anderson, vice chairman, institutional properties, multifamily for CBRE, has lots of good news to share at the 2014 RealShare Phoenix Metro this December 15. With the Phoenix sector booming, he's eager to spread the news, where he'll be sitting in on a RealShare Multifamily and Market Momentum panel. GlobeSt.com caught up with Anderson to get his thoughts on the multifamily sector.
“Investor capital is strong,” says Anderson. “And absorption for new product is strong. We'll deliver 4,600 units this year and 6,500 next year. Historically we deliver about 6,500, so we'll be back up to par.”
Anderson says occupancy remains in the mid-90s and is strong throughout whole value.
“When the market was soft, you didn't get paid for value-add—that's not so today. It's a good time for apartment owners, a good time for rental traffic. Home ownership went down from the high 60s to 60%,” says Anderson. “More and more millennials choose to rent and the 65-plus crowd is looking to downsize. They all want that mobility.”
Anderson relates it's been a solid year in terms of operational performance and that rents are up 4.5%. He sees rents pushing another 4%-5% in 2015.
“Investor interest is strong in Phoenix because there are higher returns than in coastal market—100-150 basis points higher,” says Anderson. “And Phoenix is a large enough city, it's not like you're going to a small market.”
Anderson states the surprise in 2015 will likely be the strength of absorption of high-end product. “It's still not easy to borrow and qualify for a home,” he says. “That hasn't changed. And that's creating a demand. A 5%-6% swing in home ownership makes a big impact on rentals. It's all positive.”
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