By Brian Tranetzki, Principal, Taylor Street Advisors Multifamily is staying strong despite COVID-19. That’s because this product type was coming off an extremely hot market at the end of 2019 and early 2020 before the pandemic hit. The Phoenix metro area remains one of the few markets nationally with positive rent growth due to the steady population increase. Now, just months away from 2021, the market is faced with many unknown factors, such as unemployment, election outcomes, continued COVID uncertainty and the risk of eliminating 1031 exchanges. In turn, buyer sentiment also remains intense with a flurry of activity on those very exchanges. Development is still robust in the valley, with significant increases in downtown Phoenix, downtown Tempe and Chandler/Gilbert. There are currently more than 15,000 units under construction in the region. The building sizes are getting larger, while individual units are getting smaller. Developers are focused on building Class A properties with an emphasis on higher-end amenities, pool areas and concierge services. The class type determines whether it’s a landlord or tenant market. Tenants have several options in the Class A rental space, particularly as new units are delivered, which makes this a tenant-friendly environment. Class A vacancy is …
