Jessica Morin Jessica Morin

Multifamily is leading Phoenix investment activity—and for good reason. In the last few years, Phoenix has benefited from economic growth and diversity, population growth and strong job growth. This has created a real need for housing and has contributed to strong and sustained rent growth. These fundamentals fit the investment profile of most investors. But, in addition, Phoenix is also serving investors better yields than they would get in other major West Coast markets. In fact, the cap rate spread between Phoenix and California is 75 to 100 basis points.

“Over the last year, an influx of out-of-state and international buyers looked for higher returns in Phoenix,” Jessica Morin, senior research analyst at CBRE, tells GlobeSt.com. “While cap rates vary widely depending on multiple factors, in general, the cap rate spread between Phoenix and California can range between 75-100 bps for comparable multifamily properties. Furthermore, rising interest rates, hedging costs, and comparatively low cap rates in primary markets will shift institutional and international investors' focus to dynamic secondary markets, including Phoenix, in search of returns.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.