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Colliers Q4 2020 Phoenix MSA Multifamily Review

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Key takeaways
According to the BLS, of all the U.S. Metropolitan Statistical Areas (MSAs) with over one million in population as of the 2010 Census (51 MSAs), Phoenix MSA was the 5th best performing metro in December, having gained back 85% of March/April’s job losses.

Despite previously reported minimal contractions in quarter-over-quarter readings due to Covid, as of year end 2020, the Phoenix MSA continues to be a nation leader in year-over-year rent growth rising 4.7% to $1,284. This growth rate is four times higher than the national average which contracted (0.8%), but still $178 below the national average rent of $1,462.

Occupancy rates continued their upward trajectory and increased 20 and 50bps over-the-quarter and year respectively to 95.6%. This occurred despite delivering 2,189 new units, slightly above the 3-year delivery average of 2,000 units. This marks the 36th consecutive quarter that occupancy has been above the 20-year average of 91.6%.

Given the current construction rate, 2021 should prove to be the highest delivery amount since 2009’s 9,315-units. There are 25,252 units currently under construction throughout Greater Phoenix, which marked the 27th consecutive quarter where the number of units under construction was above 10,000.

Investment sales volume significantly decreased over-the-year by 24% to $5.5B, with an average PPU (price per unit) increasing 19% to $192,356.

Outlook
As the Covid-induced Idea Diaspora heats up, with both population and businesses—particularly financial services, tech and advanced manufacturing industries relocating away from the Gateway markets—Greater Phoenix is in a near perfect position to capture much of that movement.

While population counts for 2020 are yet-to-be released, current evidence suggests that over 2H 2020 Phoenix’s growth rate increased nearly 25% to +/-260 new residents per day. If this holds true, Phoenix will need an additional +/-3,000 units just to accommodate the extra population growth. Considering our current housing deficit of +/-32,000 units, market equilibrium is not foreseen in the near-to-medium terms.

Beginning at the end of 2017, after nine years of numerous interventions, the Federal Reserve attempted to return to more normal market operations by reducing its balance sheet in what become known as Quantitative Tightening (QT).

By the end of 2018, the S&P 500 was down 6.2%, IG (Investment Grade) bonds down 6.4% and the 3-and 5-year UST yield inverted for the first time in a decade. Lesson, it is much easier to run into something than extract yourself out.

Phoenix Multifamily Market Colliers International in Arizona

Colliers Q4 2020 Phoenix MSA Multifamily Review

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Related Experts

Thomas Brophy

Research Director

Phoenix

As national director of multifamily research & analytics for the Cooke Multifamily Team with Colliers International, I am responsible for the aggregation, management and analysis of all market, and related, data sets.

I am committed to providing market-leading research services through the systematic deployment of custom, purpose-built software and analytic platforms for the creation of qualitative, not just quantitative, analysis.

In addition to publishing quarterly statistical reports for each market in which our clients operate, I maintain a database of both publicly available, and in-house built, leading economic/real estate indicators to provide forecasts and analyze and interpret real estate trends as they happen.

I also produce customized research reports on behalf of the team and clients, prepare market presentations and develop ad hoc research projects in support of business development.

My ethos: question different; for it is in asking better, more salient, questions that true market knowledge, and understanding is found. I am reminded of the words of T.S. Eliot who stated, “Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

In our new era of big data, we have reached peak data overload. Knowledge is a derivative of information; wisdom, knowledge’s ultimate abstract, can only be gained when tethered to, and guided by, past experience.

Data without context is like a light without a bulb, a market without a narrative or an explanation without a common reference point. Data is but a guide to asking better questions; better questions lead to greater understanding, which, if deployed effectively and purposely, lead to better results.

The Cooke Multifamily Team focuses on institutional and private equity assets, ranging from core plus to workforce housing across the United States. Our team includes Cindy Cooke, Brad Cooke, Matt Roach, Chris Roach, Teresa Lowery, Ron Cameron, Nicholas Solo, Aimee Healy and Kellyanne Kennedy.

Previously, I served as research director for Colliers International in Arizona, managing the research department entrusted with all market data and analysis activities. My creative outlook significantly enhanced research services for clients and brokers. Collaborating with other service lines and professionals, our research team provided extensive data compilation, including ownership, zoning, land use, property sales and demographics, and developed reliable statistical information.

My extensive experience includes collecting, analyzing and preparing market and economic data and research, as well as expertise in corporate communications, investor relations, strategic planning, brand management and public speaking.

Prior to Colliers, I was director of research for ABI Multifamily, where I developed market reports and research data used in marketing materials for ABI offices in Phoenix, Tucson, Sacramento and San Diego. I oversaw all data collection and reporting, wrote monthly market insight articles, and developed market podcasts.

As director of research and partner for Neighborhood Ventures (a multifamily investment firm), I collected, analyzed and wrote market data reports for use in investor presentations, offering materials and corporate communications. As principal with EPU Investments, I directed business and research operations for a multi-divisional investment company involved in single- and multifamily development and land services, including farming and water rights assessments and acquisitions.

Serving as an affordable housing specialist at Hendricks & Partners (now Berkadia), I provided assistance, research and guidance in creating the affordable housing division, and assisted brokers and clients in the acquisition and disposition of assets across the U.S.

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Cindy Cooke

Senior Executive Vice President

Phoenix

As a senior executive vice president with Colliers, Cindy Cooke leads the Cooke Multifamily Team—one of the top full-service multifamily investment teams in the nation. Team members are Brad Cooke, Chris Roach, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Eric Blair, Nicholas Solo, Alice Bean, Aimee Healy and Kellyanne Kennedy.

Cindy and her team work with sellers and qualified buyers across multiple markets, with a platform that allows them to effortlessly navigate across state lines. Multifamily asset types served include luxury, core, value add, high-rise, new development, student and workforce housing, and land.

With over 38 years of experience, Cindy’s multifamily expertise includes large portfolio sales, conventional and affordable assets, new development, construction, property assemblage, and debt/equity placements.

Her ability to maximize value, minimize risk and accelerate velocity for clients is the driving force behind all of Cindy’s decisions. She leverages her in-depth experience and long-term industry relationships to benefit the team’s institutional and large private capital clients and provides the market insights clients need to make strategic investment decisions.

Cindy is involved in every aspect of the transaction from start to finish and understands the importance of each step, from asset evaluation to marketing to buyer qualification and negotiations, due diligence, financing and closing. She delivers unmatched service through a hands-on, personal approach, with a primary focus on building valued client relationships.

The Cooke Multifamily Team serves and supports its clients with integrity, respect and kindness and is the advisor of choice for many of the world’s most innovative and successful companies. Our team consistently meets and exceeds client expectations and ensures each transaction is completed as smoothly as possible, with no detail unnoticed.

Cindy's experience at Colliers has provided her with national and international exposure. In addition to her multifamily brokerage business, she served as Interim Manager and Designated Broker for Colliers in Arizona in 2005. From global conferences in Shanghai to daily interactions with more than 150 Arizona brokers and staff, Cindy helped lead the Arizona to become one of the top Colliers markets worldwide.

Cindy started her brokerage career in multifamily, emphasizing development, property assemblage, zoning and construction. Early on, to accommodate the needs of her clients, she formed her own commercial real estate brokerage and mortgage broker firm and was the sole proprietor for 10 years. Cindy was also the partner of Blue Ridge Park Business Park, assembling, zoning and planning the largest business park in Raleigh, North Carolina.

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Brad Cooke

Executive Vice President

Phoenix

As an executive vice president with Colliers, Brad Cooke is a senior member of the Cooke Multifamily Team, one of the top full-service multifamily investment teams in the nation, serving clients across multiple states and markets. Team members include Cindy Cooke, Chris Roach, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Eric Blair, Nicholas Solo, Alice Bean, Aimee Healy and Kellyanne Kennedy.

Multifamily asset types served by the team include luxury, core, value add, high-rise, new development, student and workforce housing, and land.

Working closely with clients, Brad helps determine and refine their objectives and guide them in successfully buying or selling a property or portfolio, while also growing their business. He provides critical market data and analysis to enable clients to quickly capitalize on emerging opportunities and realize optimal property value.

Brad has established lasting business relationships for the team with leading local, national and international companies through a dedicated and personal approach that ensures client expectations are not only met, but surpassed. He is involved at every stage of the transaction and oversees underwriting and due diligence to facilitate a smooth and timely closing process.

His ability to strategize, coupled with extensive industry knowledge, produces exceptional results for clients, as evidenced by the team’s 100% closing ratio and high degree of repeat business and referrals.

The Cooke Multifamily Team has established core values that set the team apart from the competition and are the foundation of every deal they do. The team provides exceptional value through product, process and, most importantly, relationships.

The team acts with integrity and is respectful, supportive and kind. They treat each deal as if it was their own investment and dive deep into the data to make sure clients make fully informed decisions. The team is constantly refining its craft to ensure they provide exceptional service at every turn of the deal. They work hard, are proactive, are intentional, and get the job done

In 2006, Brad joined Colliers as vice president with the Cooke Multifamily Team, finding his passion and focus in the multifamily sector. He has played a strategic part in making the team a national leader in multifamily investments.

Brad’s background includes serving as designated broker/owner of Interlock Realty, a residential real estate firm, and as the leasing agent for over 1 million square feet of industrial space. His real estate career began in 2002, as an office leasing agent, and has since been exposed to all areas and facets of the real estate industry.

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Chris Roach

Vice President

Phoenix

Chris Roach is a vice president with Colliers and member of the Cooke Multifamily Team—one of the top multifamily teams in the nation. The team includes Cindy Cooke, Brad Cooke, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Eric Blair, Nicholas Solo, Alice Bean, Aimee Healy and Kellyanne Kennedy.

The Cooke Multifamily Team focuses on institutional and private equity assets, ranging from core plus to workforce housing across the United States.

Chris has emerged as a proven leader within the multifamily market, with clients that include institutional, private equity and individual investors. His in-depth understanding of both investment sales and capital markets enables him to complete complex transactions, while ensuring a smooth process for all parties. His experience includes market rate and affordable housing, bulk condominium sales, mixed-use, new construction, land and complex value-add transactions.

Clients and colleagues find Chris to be diligent, persistent, knowledgeable, trustworthy and responsive. His proven track record of success within an ever-changing marketplace has allowed him to forge deep client relationships while continually achieving superior results.

Chris joined Colliers in 2018, with extensive experience in sales, marketing and entrepreneurship. His background in both business and sports gave him exceptional skills in sales, analysis and negotiations. Previously, Chris joined ORION Investment Real Estate in Phoenix in 2014, where he was a senior vice president of multifamily investment sales.

An early source for Chris's drive and determination was his successful college career playing Division 1 baseball.

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Matt Roach

Vice President

Phoenix

Matt Roach is a vice president with Coliers and member of the Cooke Multifamily Team—one of the top multifamily teams in the nation. The team includes Cindy Cooke, Brad Cooke, Chris Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Eric Blair, Nicholas Solo, Alice Bean, Aimee Healy and Kellyanne Kennedy.

The Cooke Multifamily Team focuses on institutional and private equity assets, ranging from core plus to workforce housing across the United States.

Matt's analytical nature and tenacity make him a valuable member of the team. He is well-versed in financial modeling, forecasting and strategic positioning of multifamily assets. He maintains a keen pulse on the market through macro and microeconomic drivers that can affect individual property activity.

Matt serves as a trusted advisor to clients through his methodical and detail-oriented approach, enabling him to understand and advance his clients’ interests. Described as dedicated, hard-working and trustworthy by clients and colleagues, he prides himself on being available, accessible and responsive.

Prior to joining Colliers, Matt was a vice president of multifamily investment sales with ORION Investment Real Estate in Phoenix. His background also includes equity research, previously working at D.A. Davidson and MKM Partners, both middle-market investment banks, where he focused on providing industry-leading research, data and financial modeling for institutional clients, including Fortress, Citadel, BlackRock, T. Rowe Price and Fidelity.

Matt and his wife Mariah currently reside in Phoenix. He is active with his church and supports various nonprofit organizations, including Arizona Foster Care and Colliers AZ Cares charitable foundation. In his free time, Matt enjoys traveling, hiking, photography and fishing,

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