Greater Phoenix Multifamily Occupancy Improves Amid Record Deliveries
Multifamily core fundamentals are showing resilience in Greater Phoenix, despite supply flooding the market, according to a Colliers market report.
Occupancy saw a 30 basis points year-over-year increase in the third quarter to 93.5 percent. The biggest improvement was seen in North Phoenix, which enjoyed a 1.1 percent boost to 93.6 percent. Just three subarkets (Camelback, Chandler and Oldtown Scottsdale) experienced occupancy drops. However, since 2021, Greater Phoenix's occupancy has remained down 283 basis points.
Demand was also strong, with 5,564 units absorbed, up from the 4,841 posted in the previous 12 months.
Another key growth area was investment activity, with sales year-to-date surging by about $250 million year-over-year to $3.2 billion.
"This growth underscores renewed investor engagement as pricing expectations stabilize and long-term fundamentals—population growth, job creation, and sustained housing demand—continue to attract capital into the Phoenix multifamily sector," Colliers explained.
The largest acquisition in terms of volume involved 383-unit The Laurel Apartments in Chandler, which went for $120.20 million. The next two largest involved 276-unit The Nines at Kierland and 366-unit Vistara at SanTan Village, which sold for $115.75 million and $115.25 million, respectively.
That all came even as deliveries hit 6,018 units — which is the largest on Colliers' quarterly total on record.
The one weak link in the third quarter was rental rates, which dropped by $24 to $1,604. But the hope is that this trend will be short-lived, as rents remain up by an impressive 31.7 percent since the second quarter of 2020.
Source: GlobeSt/ALM