2nd Quarter 2013 Apartment Market Update

By | 2017-10-04T14:31:06+00:00 September 19th, 2013|

KASTEN LONG COMMERCIAL GROUP:  Our Apartment Team gave a great presentation to the Scottsdale Area Assoc. of Realtors at their August commercial meeting. A video of this presentation is available upon request. KLCG had 27 transactions in Q2 including 4 apartment sales, 19 commercial sales and leases and 4 residential home sales.

Metro Phoenix Apartment Inventory
Size (units)           Properties           Total Units
20 – 49                   690                       21,452 (per CoStar)
50 – 99                   295                       21,152 (per RealData)
100+                      970                       240,293 (per RealData)

Vacancy Rates – Remains at 7.7%
Vacancy rates for the 2nd quarter for stabilized 50+ multifamily properties remained at 7.7% . Greater than 10% vacancy rates were reported in South Gilbert / Queen Creek, N. Central Phoenix and an area roughly west of I-17 from Baseline to Peoria Avenues. Vacancy rates of less than 7% were reported in Scottsdale, Tempe, Gilbert and Chandler. A detailed list showing all vacancy rates by sub-district is posted on our website www.KLCommercialGroup.com.

New Construction and Permitting
There were seven new apartment projects started in Q2 with a total of 23 under construction representing 4,329 units. Of the 23 projects, 9 are in Phoenix, 4 in Tempe, 3 in Mesa, 2 in Chandler and one each in Gilbert and Youngtown. Five projects were completed in Q2 totaling 1,072 units. These included 382u in Gilbert, 213u in Scottsdale, 153u in Mesa and two projects in Phoenix (270u and 54u). In addition, there are 82 projects in various stages from initial rezoning to final permitting – representing 21,352 units. Details of each project and a map showing the location of the current construction activity is posted on our web site under “Apartments’ – “Market Data”.

Rental Rates (Individually Metered)
For 50 – 99 unit size apt’s., rental rates have been steadily increasing while the 100+ unit’s rates have remained fairly flat. The highest rents are in Central City / Sky Harbor and Scottsdale / Fountain Hills. The lowest along the I-17 corridor. These are the reported average rents by RealData.
Size                        Studio                    One Bedroom                    Two Bedroom
50 – 99                 $487 (1.14/sf)        $585 (0.93/sf)                  $610 (0.75/sf)
100+                    $557 (1.22/sf)        $685 (1.01/sf)                    $700 (0.86/sf)