Skip to main content Skip to footer

2021 Phoenix Multifamily Year End Report

Download Report
Multifamily_Hero_1536X1040_Q421

Phoenix Multifamily YE 2021 Report & Interactive Construction Pipeline Map/Report

After four years of interest rates being firmly fixed at zero percent, in 2012, the Fed introduced the “Dot Plot” system into their arsenal of policy tools. The dot plot system allows the Fed’s eighteen members to communicate to the market where, they believe, interest rates will be now to several years into the future. As of December 15, 2021, two of eighteen Fed members believed the Fed Funds rate would be above 1 percent by year-end 2022 with all eighteen assuming rates will be above 1 percent, but not higher than 2.5 percent, by year-end 2023. For the longer-term outlook, only two of eighteen believe interest rates will hit 3 percent by sometime, anytime, after 2024.

Summary

  • According to the BLS, Phoenix MSA was the 4th best performing Sun Belt metro in December, having not only gained back COVID job losses but reattaining peak employment. 
  • The Phoenix MSA continues to be a nation leader in year-over-year rent growth rising 24.3 percent to $1,601. This growth rate is nearly two times higher than the National average which increased 14.6 percent, but still $39 below the National average rent of $1,640.
  • Occupancy maintained record highs increasing 120 bps over-the-year to 97.4 percent and besting the previous all-time occupancy high of 96.8 percent set in the late 1970s. This occurred despite delivering over 8,072 new units through YE 2021 and marks the 40th consecutive quarter that occupancy has been above the 20-year average of 91.6 percent.
  • Given the current construction rate, 2022 should prove to be the highest delivery amount since 2009’s 9,315-units with 13,000 new unit deliveries. There are 34,542 units currently under construction throughout Greater Phoenix which marked the 31st consecutive quarter where the number of units under construction was above 10,000.
  • Investment sales volume increased 150.8 percent over-the-year to its highest ever reading $13.797B, with average PPU (Price Per Unit) increasing 33.3 percent to $256,484.
Outlook – Opaquely Crystal

Total US non-farm payrolls increased by 199,000 in December, compared with the Dow Jones estimate of 422,000. The unemployment rate dropped to 3.9%, better than the expected 4.1 percent.  Since May, U.S. non-farm employment has recouped 84 percent (18.790M) of the job losses stemming from Covid. The Greater Sun Belt area, including Phoenix, has generally recovered faster than the rest of the country with Phoenix, #4 in the Sun Belt, and along with DFW, Austin, Jacksonville, Tampa, Raleigh, and Savannah have reattained peak employment.
 
In August 2020, the Fed moved to essentially rewrite its mandate, i.e. letting inflation run higher than 2 percent which, at the time, untethered it from all historical regimes. Essentially, the Powell Fed bet they could ignite, and control, inflation in the meaningful, but manageable, 4 to 5 percent range. Less than two years later, Powell, coupled with the pandemic and all its deleterious effects, certainly managed to jumpstart inflation with the average, annualized, monthly reading of 6 percent throughout 2021. Inflation, now, is so high that we are running close to the hyper-inflation days of the late 1970s/early 1980s.

As John Mauldin, from Mauldin Economics, states, “one consequence of inflation is that it pushes “real” interest rates lower… If the Fed follows recent practice and raises rates a quarter point at each meeting starting in mid-2022, it might add up to a 1.25 percent hike by the end of next year….[and] will still leave negative real interest rates of -3 percent ... But would markets tolerate anything tougher? Probably not … Most obviously, higher rates would raise borrowing costs for the biggest borrower of all, the US Treasury. The debt has reached a size at which even tiny rate increases add big bucks to the government’s bill.”

Given that as a backdrop, it would seem continued Government and Federal Reserve interdictions in the market will not only continue, but accelerate, despite statements to the contrary. If that is the case, then would seem to me that we are much closer to negative interest rates, now, that at any point in our history. Since the 1950s, the Fed has had to adjust rates an average of 500bps lower during a recession and, according to the current ordering of dot plots, absolutely no one on the Fed sees short term rates rising above 3.00 percent.

Phoenix (and other MSA’s across the Sun Belt/Mountain West) Construction Pipeline Report YE 2021, click here to view the Interactive Map and download the report(s).

 

Multifamily_Search_1024x972_Q421

2021 Phoenix Multifamily Year End Report

Download Report
Related Experts

Thomas Brophy

Research Director

Phoenix

As national director of multifamily research & analytics for the Cooke Multifamily Team with Colliers, Thomas Brophy is responsible for the aggregation, management and analysis of all market, and related, data sets. He provides 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 the team’s clients operate, he maintains 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. Thomas also produces customized research reports on behalf of the team and clients, prepares market presentations and develops ad hoc research projects in support of business development.

Thomas’ ethos: question different; for it is in asking better, more salient, questions that true market knowledge, and understanding is found. 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 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. The team includes Cindy Cooke, Brad Cooke, Matt Roach, Chris Roach, Teresa Lowery, Ron Cameron, Eric Blair, Nicholas Solo, Alice Bean, Aimee DeYoung and Kellyanne Kennedy.

Prior to his current role, Thomas served as research director for Colliers in Arizona, managing the research department entrusted with all market data and analysis. His creative outlook significantly enhanced research services for clients and brokers.

Thomas has extensive experience in 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.

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

Thomas served as director of research and partner for Neighborhood Ventures, a multifamily investment firm. In his role, he collected, analyzed and wrote market data reports for use in investor presentations, offering materials and corporate communications.

As principal with EPU Investments, Thomas directed business and research operations for a multi-divisional investment company involved in single- and multifamily development and land services. As an affordable housing specialist at Hendricks & Partners (now Berkadia), he helped create the affordable housing division, and assisted brokers and clients in the acquisition and disposition of assets across the U.S.

View expert

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 DeYoung 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.

View expert

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 DeYoung 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.

View expert

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 DeYoung 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.

View expert

Matt Roach

Vice President

Phoenix

Matt 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, Chris Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Eric Blair, Nicholas Solo, Alice Bean, Aimee DeYoung 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,

View expert