Search
 

High Occupancy Rates Remain Despite Strong Construction Activity

PHOENIX—There are multiple forces at play, fueling the multifamily construction cycle, according to ABI Multifamily's Phoenix MSA second quarter 2016 multifamily construction pipeline report.

By Lisa Brown | lisabrown | | Updated on August 02, 2016
Phoenix population The Phoenix Metro has grown nearly 7%, gaining approximately 282,000 residents.
PHOENIX—With an overall occupancy above historical averages and explosive renter household formations, the Phoenix multifamily market is one to watch. There are multiple forces at play, fueling the multifamily construction cycle, according to ABI Multifamily ‘s Phoenix MSA second quarter 2016 multifamily construction pipeline report. Thomas M. Brophy , director of research at ABI tells GlobeSt.com: “Despite elevated levels of construction, the Metro’s overall occupancy rate has continued its upward trend nearing 96% which is some 6% above historical norms.” Population Growth : Although lower by historical standards which trend 10%-plus, the Phoenix Metro has grown nearly 7% to more than 4.47 million, gaining approximately 282,000 residents. Renter Households : Even more fundamental than population growth has been the absolute explosion of the renter household since 2005. From 2005 to 2013, renter household formation skyrocketed 34%, which if current population estimates hold true, the Metro is now closer to 45%. This impacts more than 175,000 households representing a combined population of approximately 450,000 individuals. Job Growth : This is evident especially in downtown CBDs, such is in downtown Phoenix, Old Town Scottsdale, North Tempe and Mesa’s Fiesta District. These areas have recorded 11,000-plus job announcements (many of which pay $45,000-plus per year), corporate relocations and aggressive courting by economic development officials. “The Phoenix Metro multifamily market delivered approximately 2,645 project based units by the end of 2Q 2016 which represents a 29% increase over 2Q 2015,” says Brophy.  “Additionally, total planned units as of 2Q were 21,081 or 36% increase over 2Q 2015. Scottsdale led the Metro in total project unit deliveries with 910 units delivered. Phoenix, although second in project units delivered, retained the top spot for both total units under construction and planned at 4,041 and 6,399 units respectively. Tempe was third with 2,806 units under construction and 3,959 units planned.” ABI Multifamily is a dedicated multifamily brokerage and advisory services firm.  

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.