Colliers International Q1 2020 Phoenix MSA Multifamily Review

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Pre-Covid wrap-up

  • The Phoenix MSA continued to lead the nation in rent growth rising 8.1 percent y/y to $1,235, nearly three times higher growth rate than the national average of 2.9 percent but still well below national average rent of $1,475.
  • Occupancy rates continue to remain elevated at 95.1 percent, despite decreasing 40bps over-the-year, and marks the 33rd consecutive quarter occupancy has been above the 20-year average of 91.6 percent.
  • Approximately 1,400 units came online over Q1 2020, which is below the 2,000 unit moving 3-year delivery average.
  • Given the current construction rate, 2020 should prove to be the highest delivery amount since 2009’s 9,315-units.
  • There are approximately 18,772 units currently under construction throughout Greater Phoenix, the highest amount since Q1 2018’s 17,895, and marked the 24th consecutive quarter where the number of units under construction was above 10,000.
  • Investment sales volume decreased 37 percent over-the-year to $1.18B across 28 transactions, with average price per unit increasing nearly 28 percent to $189,185.

Outlook: At this point, Covid-19’s potential impact on both the real estate industry, and market overall, remains to be seen. While we may not have firm data as to the full extent of this disruption, make no mistake that its impact will be significant, as witnessed in the nearly 26M+ national unemployment claims, although not expected to be long term.

The biggest impacts observed thus far, aside from unemployment claims, have been relegated to capital markets and retail. With regards to capital markets, lenders have been widening spreads which has, in turn, impacted interest rates. The near-term interest rate spread increase can, and should, be attributed to the volatility of the virus’ spread and government steps to contain it. Nonetheless, the Federal Reserve has continued to provide the market necessary liquidity which bodes well for real estate.
 
While the near-term employment picture is, in a word, terrible; it is helpful to note that the economic drivers that have kept Phoenix at the top of job and population growth are still in place. Not only did the Phoenix MSA lead the country in job growth going into the crisis, rising 3 percent+ in January/February, but has continued to diversify since 2010.


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Colliers International Q1 2020 Phoenix MSA Multifamily Review

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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 International, I lead the Cooke Multifamily Team—one of the top multifamily teams in the nation. Our team members are Brad Cooke, Chris Roach, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Nicholas Solo, Aimee Healy and Kellyanne Kennedy.

With more than 38 years of experience specializing in multifamily, I provide the market insight clients use in their investment decisions. My primary focus is my relationship with clients. I understand the importance of every step from evaluation to marketing, qualifying the buyer, negotiations, due diligence, financing and closing; and am involved in every aspect of the transaction from start to finish. Through a hands-on personal approach, I provide unmatched service to my clients.

The ability to maximize value, minimize risk and accelerate velocity for clients is the driving force behind all my decisions. I leverage my knowledge and relationships for the benefit of my team’s institutional and large private capital clients.

In addition to my multifamily brokerage business, I served as Interim Manager and Designated Broker for Colliers in Greater Phoenix in 2005. From global conferences in Shanghai to daily interactions with more than 150 brokers and staff, I helped lead Greater Phoenix to become one of the top Colliers’ offices worldwide.

My brokerage career started in multifamily with an emphasis on development, property assemblage, zoning and construction. Early in my career, to accommodate the needs of clients, I started my own commercial real estate brokerage and mortgage broker firm and was the sole proprietor of these companies for 10 years. I was also the partner of Blue Ridge Park Business Park, where I assembled, zoned and planned 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 International, I am a member of the Cooke Multifamily Team—one of the top multifamily teams in the nation. Our team includes Cindy Cooke, Chris Roach, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Nicholas Solo, Aimee Healy and Kellyanne Kennedy. My primary role is client relationships, ensuring clients’ needs are fully met and that they are aware of the current market conditions and opportunities..

My dedication to our team’s clients and hands-on personal approach has helped create long-lasting business relationships with top national and international companies. I am responsible for client communication, property tours, coordination of the due diligence process, assisting with underwriting, and market and economic analysis. My in-depth market knowledge has proven to be a valuable asset to our clients and team.

Prior to joining Colliers in 2006, I served as a designated broker/owner of Interlock Realty, a residential real estate firm, and was also the leasing agent for over one million square feet of industrial space. My career began in 2002, as an office leasing agent, and I have since been exposed to all areas of real estate. I found my passion and focus in the multifamily investment sector of commercial real estate.

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Chris Roach

Associate Vice President

Phoenix

As an associate vice president with Colliers International, I am a member of the Cooke Multifamily Team—one of the top multifamily teams in the nation. Our team includes Cindy Cooke, Brad Cooke, Matt Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Nicholas Solo, 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.

I have emerged as a proven leader within the multifamily market, with clients that include institutional, private equity and individual investors. My in-depth understanding of both investment sales and capital markets enables me to complete complex transactions, while ensuring a smooth process for all parties.

My experience includes market rate and affordable housing, bulk condominium sales, mixed-use, new construction, land and complex value-add transactions.

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

I joined Colliers in 2018, with extensive experience in sales, marketing and entrepreneurship. My background in both business and sports has given me exceptional skills in sales, analysis and negotiations.

Previously, I joined ORION Investment Real Estate in Phoenix in 2014, where I was a senior vice president of multifamily investment sales.

An early source for my drive and determination was my successful college career playing Division 1 baseball.

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Matt Roach

Associate Vice President

Phoenix

As an associate vice president with Colliers International, I am part of the Cooke Multifamily Team—one of the top multifamily teams in the nation. Our team includes Cindy Cooke, Brad Cooke, Chris Roach, Teresa Lowery, Ron Cameron, Thomas Brophy, Nicholas Solo, 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.

My analytical nature and tenacity have made me a valuable member of our team. I am well-versed in financial modeling, forecasting and strategic positioning of multifamily assets. I maintain a keen pulse on the market through macro and microeconomic drivers that can affect individual property activity.

I serve as a trusted advisor to clients through my methodical and detail-oriented approach, enabling me to understand and advance my clients’ interests. Described as dedicated, hard-working and trustworthy by clients and colleagues, I pride myself on being available, accessible and responsive.

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

My wife Mariah and I currently reside in Phoenix. I am actively with my church and support various nonprofit organizations, including Arizona Foster Care and Colliers AZ Cares charitable foundation. In my free time, I enjoy traveling, hiking, photography and fishing,

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