We were fascinated by the year-end 2013 metro-Phoenix apartment sales numbers.  Maybe fascinated isn’t really the right word; but the numbers are interesting and very encouraging considering the last four years.  During 2013, there were 285 sales of apartments with 10 or more units.  182 of these sales had between 10 and 99 units and 103 sales had 100 or more units.  Here’s where it gets interesting:  The 182 sales of 10 – 99 units amounted to $243,391,008 and 5,955 units.  That in itself is pretty impressive, but wait, there’s more.  The 103 sales of properties with 100 or more units totaled $2,336,626,810 and 27,428 units!  The charts below show the details of the 2013 Multi-Family sales with the additional breakdown of when the property was built.

 2013 Metro Phoenix Apartment Sales (10-99 units)

          Built

Sales

Volume

Price/u

Price/sf

1940 – 1979

113

$139,493,022

$40,388

$53.03

1980 – 1989

63

$91,022,986

$39,234

$52.37

1990 – 1999

1

$3,475,000

$36,198

$35.59

2000 – 2009

5

$12,875,000

$71,133

$79.28

Totals

182

$243,391,008

2013 Metro Phoenix Apartment Sales (100+ units)

Built

Sales

Volume

Price/u

Price/sf

1940 – 1979

23

$339,214,500

$50,576

$68.71

1980 – 1989

46

$821,440,137

$73,406

$86.45

1990 – 1999

12

$379,720,093

$103,836

$109.26

2000 – 2009

22

$796,253,080

$138,462

$144.43

Totals

103

$2,336,626,810

A few details to note include that 56 of the 182 sales of 10 to 99 units were “flips” – resales of properties purchased in the past few years.  Also, in the 100+ segment, 21 of the 103 sales were sold by Equity Residential, after they made the decision to relocate their MF portfolio to coastal cities.  2013 was clearly a very good year for Multi-Family sales but we did notice a slowdown in the 4th quarter and we are monitoring that closely.  There were several obvious reasons for this slowdown: 1. Investors perceive our area as having reached a level with near-term future growth being greatly reduced; 2. The low-priced, value-add opportunities are pretty much gone; and 3. There is an increased concern of the effect of new apartment construction.

We remain, however, very optimistic.  Every day brings positive news regarding both business and people moving to the Valley.  JOBS are being created and we expect Arizona to regain its position as the State with the fastest growing population in the US.  Our weather is certainly more attractive than shoveling snow and the fundamentals for the MF market are strong:  occupancy is high and rents are increasing.  We expect the strongest markets to be in the B and C Class properties as tenants look for well kept, secure, well-located properties.  – per Linda Fritz-Salazar, Assoc. Broker – Kasten Long Commercial Group