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Our Phoenix office offers investment sales expertise for multifamily and manufactured housing properties and a complete range of financing options for all types of commercial real estate. We serve the entire Southwestern region and can arrange commercial real estate loans for any property type through our unmatched network of lending partners. Call our local Phoenix office to learn more about our commercial real estate financing, loan servicing and multifamily investment sales capabilities. (License: AZ CBK 0919710 and CBKBR 0117381)

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Tucson 3Q23 Multifamily Market Insights Report: Strong seasonal trends steady the local market

Highlights:

  • Following a sluggish first half, the Tucson multifamily market posted an improving performance during the third quarter. The vacancy rate decreased, and rents maintained an upward trajectory. Vacancy tightened even as more units were delivered to the market.
  • Area vacancy dipped 20 basis points during the third quarter to 7.9%, marking the first vacancy improvement since the third quarter of 2021. Year over year, the rate is up 160 basis points.
  • Asking rents continued to trend higher, rising 1.2% during the third quarter to $1,196 per month. Area rents increased by 2.7% in the past year.
  • Sales velocity accelerated in recent months, however, transaction volume year to date is still down 80% from levels posted in the same period last year. The median sales price thus far in 2023 is $116,000 per unit.

Read the report, or contact our Phoenix office to learn more.

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Phoenix 3Q23 Multifamily Market Insights Report: Investment activity accelerates, still lags earlier levels

Highlights:

  • Construction has been elevated throughout 2023 in the Phoenix multifamily market, a trend that continued in the third quarter. Renter demand has gained momentum year to date, offsetting some of the supply-side pressures in the region.
  • Vacancy rose 30 basis points in the third quarter, duplicating the increase that occurred during the second quarter. The rate has increased 120 basis points in the past 12 months, ending the third quarter at 7%.
  • Rents dipped in recent months, dropping to $1,607 per month. Average rents in the Greater Phoenix market are down 2.7% year over year.
  • Investment activity to this point in 2023 has been limited, but transactions picked up in recent months, particularly among newer assets. Year to date, the median price reached $264,700 per unit.

Read the report, or contact our Phoenix office to learn more.

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October Economic Commentary: Continued stability in the labor market may elongate timeline for interest rate cuts

John Beuerlein
Chief Economist
Pohlad Companies

MINNEAPOLIS (Oct. 17, 2023) — Declining inflation pressures this year have allowed the Federal Reserve to respond with a more gradual pace of interest rate increases since May as it assesses the impact of its most aggressive monetary tightening of the last 40 years. The effects of monetary changes exhibit themselves with variable lags over a long period. The Fed’s job to discern the appropriate amount of tightening to achieve its goal of 2% inflation is complicated by the variable lags and current events — such as the potential government shutdown in November. The resulting economic uncertainty is impacting business decisions, effectively slowing economic activity.

Headline inflation increased 0.6% during August – the most in more than a year according to the latest CPI report. The year-over-year reading rebounded to 3.7%, up from 3.2%, primarily due to the 10.6% month-over-month surge in gasoline prices. There was some evidence that higher energy prices have fed through to the core index (excludes food and energy), which rose by 0.3% month-over-month — although base effects helped push year-over-year core inflation down to 4.3% from 4.7%. However, the downward pressure on core inflation elsewhere still looks intact, as core goods prices fell again, by 0.1% month-over-month. Nevertheless, inflation is still running above the Fed’s 2% target.

GDP and consumer spending
The final reading of second quarter 2023 real gross domestic product (GDP) was reported at a 2.1% annualized rate. Consumer spending in the second quarter was revised down to a +0.8% annual rate from +3.8% in first quarter, reflecting a pushback from consumers on higher prices. Real (inflation-adjusted) retail sales are down 1.2% year-over-year through August and have been flat or negative in nine out of the last 10 months on a year-over-year basis, indicating that transaction volumes are declining as prices increase.

Real disposable incomes – the fuel for consumer spending – have been down for three consecutive months at a -1.7% annual rate, and consumers continue to tap their savings or credit cards for their spending. The personal savings rate is now at a year-to-date low of 3.9%. Credit card debt has grown at a 13.9% annual rate since mid-2021, compared to the 6% annual rate in the four years before the pandemic. At the same time, delinquency rates on credit card loans are at 11-year highs — with the cost of credit card loans at 22%.

Tax receipts, manufacturing, and leading economic indicators
Federal tax receipts are declining, which is an indication of the slowing economy. Treasury receipts are down $437 billion this fiscal year through August compared to the same period in 2022, while outlays are up $142 billion – including $130 billion due to higher interest payments. The decline in tax receipts is mainly due to lower receipts from individual income taxes.

The Institute for Supply Management (ISM) manufacturing index for September came in at 49, the 11th consecutive month below 50 — indicating contraction in the manufacturing sector. Only five of 18 industries reported expansion. The New Orders Index has been in contractionary mode for 13 consecutive months indicating weak demand. The Leading Economic Indicators Index continues to trend lower – now for the 17th consecutive month through August. Since the inception of this index in 1958, such a string of declining readings has only happened when the economy is in or nearing a recession.

The labor market
Employment gains in September were surprisingly strong with an increase of 336,000 in non-farm payrolls – nearly double market expectations – and the prior two months were revised upward by 119,000. Employment gains were broad-based. The unemployment rate remained at a 19-month high of 3.8%. Wages grew only 0.2% during September, bringing the year-over-year growth rate to a two-year low of 4.2%. The labor market remains the strongest pillar of the economy providing more income to more people. Although wage growth has been cooling, the resiliency of the labor market is one of the Fed’s concerns as it tries to cool down the overall economy. Until the labor market shows weakness, it is unlikely that the Fed will consider lowering interest rates.

Interest rates and the Fed
As expected, the Fed held the federal funds target range unchanged (5.25% to 5.50%) at its Sept. 20 meeting, while leaving open the possibility of another rate increase before year-end. The most surprising and hawkish element of the meeting was the median expectation for year-end 2024 moving from 100 basis points of rate cuts to only 50 basis points in the federal funds rate. Markets are pricing in a lengthy pause in interest rate actions and have pushed back the timing of the first rate cut from the spring of 2024 to late summer.

The real (inflation adjusted) federal funds rate is now at the highest and most restrictive level since 2009. Based on Fed projections given after the September meeting, the real federal funds rate is forecast to increase by another 100 basis points over the next year, bringing it to levels last seen in late 2007. Even if the Fed does not increase headline rates any further, declining inflation pressures will effectively cause the real federal funds rate to increase and further tighten monetary conditions. In addition to its interest-rate policy, the Fed continues to reduce its balance sheet by about $95 billion per month – another policy tool that tightens liquidity.

With the Fed intent on keeping rates higher for longer and commercial bank lending standards remaining tight, the increased cost of credit and its reduced availability are significant headwinds for refinancing existing debt as well as for ongoing economic growth — especially for smaller companies.

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Northmarq recognized as GlobeSt. 2023 Multifamily Influencer

MINNEAPOLIS (Oct. 10, 2023) — Northmarq is honored to be named by industry news leader GlobeSt.com as a 2023 Multifamily Influencer.

Below is content originally published by GlobeSt.

2023 Multifamily Influencers
These are interesting times for multifamily. Once the golden child of the commercial real estate family, it still is considered to be a long-term favorite. But the short-term is fraught with problems. A supply pipeline that is reaching a 50-year high. An interest rate regime that has made refinancing harder and cut margins. A rental growth rate that is slowing, in some cities dramatically. Navigating this environment for the past year has not been easy and the men and women who have made this particular sector their careers have had to muster all of their skills and knowledge to do so. In the following pages you will read about the people, teams and companies that have made their mark on multifamily in the past 12 months by not only fielding these issues but also figuring out how to thrive in what has become a difficult environment.

Northmarq
Last year, more than 70% of investment volume was in the multifamily sector for Northmarq, one of the nation’s leading commercial real estate brokerage and advisory firms. Northmarq multifamily is led by President of Investment Sales Trevor Koskovich and Senior Vice President and Director of Operations Arsen Aminov. The firm prides itself on offering its commercial real estate investors a personalized approach to buying and selling multifamily properties, land and manufactured housing communities. Northmarq’s Multifamily Investment Sales team assists in the acquisition and disposition of many product types, including market rate, luxury, affordable housing, student housing, senior housing and single-family rentals. It has been ranked as a top-15 multifamily brokerage firm with among the highest multifamily sales volumes in 2022 at $11.5 billion.

In the past three years, the company has closed more than $25 billion in multifamily transactions, including a 205-unit property in Clarksville, Tenn., for $40 million financed by Northmarq’s Minneapolis Debt + Equity office; a $33.5 million best-in-class community in Colorado; a St. Peters, Mo., luxury building for $70 million with financing arranged by Northmarq; and a three-property portfolio totaling 246 units in the Los Angeles metropolitan statistical area. The firm supports numerous community organizations including the Eastern Oklahoma Food Bank, Atlanta Community Food Bank and Habitat for Humanity, and through the Northmarq Neighbors program, it supports organizations throughout the nation that provide affordable housing and work to reduce homelessness, such as a Safe Haven Foundation in Chicago, Friends of Boston’s Homeless, New Hope Housing in Houston, New Life Mission in Tampa, Community Housing Works in San Diego and more.

View the 2023 GlobeSt. Multifamily Influencers.


Reprinted and excerpted with permission. © 2023 ALM Global Properties, LLC. All rights reserved.


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Manufactured Housing 2Q23 Market Insights Report: Occupancies inch lower, but rent growth accelerates

Highlights:

  • The manufactured housing market showed some signs of slowing during the first half of 2023, but fundamentals remain strong. Rents have been on the rise, but the pace of gains will likely level off during the second half.
  • Occupancy rates at the national level recorded a quarterly decline for the first time in three years during the second quarter. The rate was 94.4% in the second quarter, 30 basis points lower than levels at the beginning of this year. Despite the recent decline, occupancy rates have improved 10 basis points year over year.
  • The pace of rent growth accelerated during the second quarter. Rents rose 2.5% in the past three months, reaching $653 per month. Rents have pushed up 7% in the past year, the strongest annual pace of growth since 2016.
  • Sales velocity picked up during the second quarter, but transaction counts are still down nearly 45% from levels recorded during the first half of 2022. The median price in the first half was $45,800 per space, while cap rates averaged 6.6%.

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Brandon Harrington shares insights on the Fed’s interest-rate pause with Multi-Housing News

PHOENIX (Sept. 21, 2023) — On Sept. 20, the Federal Reserve and Federal Open Markets Committee took a pause on increasing interest rates further — bringing relief to some of the multifamily industry.

Brandon Harrington, senior vice president and managing director of Debt + Equity in Northmarq’s Phoenix office, spoke with Multi-Housing News (MHN) on that topic for the article, “Multifamily weighs in on another rate pause.”

Harrington said previous rate hikes have increased interest rates on new acquisitions and refinancings, causing buyers to be conservative on their debt assumptions.

“Additionally, the rising cost of capital is making it tougher for new development projects to pencil,” he said. “Lenders are more cautious about new construction loans, the costs are often prohibitive, and this is restricting new development.”

Harrington noted this could be a positive for existing operators due to competition from future construction potentially slowing in the latter half of 2024 and into 2025.

“If maturities on expiring low interest debts are coming due in the near term,” Harrington said, “it will require owners to either put additional equity into deals if the owners want to maintain them or if they don’t have the equity or are unwilling to invest the equity, it’s going to create motivated sellers from either owners offloading or lenders looking for a new general partner with fresh equity,” he said.

Topics covered in the article include:

  • Impact on financing.
  • Demand remains strong.
  • End-of-year predictions.

Read the full article.

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Northmarq’s Trevor Koskovich speaks with Connect CRE for its Leading in Tough Times series

PHOENIX (Sept. 1, 2023) — Northmarq President of Investment Sales Trevor Koskovich recently spoke with Connect CRE for its Leading in Tough Times series, which features leaders across commercial real estate sharing their wisdom and discussing lessons learned.

Originally published in Connect CRE.

Q: What leadership advice would you like to give your younger self?
A: Don’t be afraid to make mistakes — and when you do, learn from them. Throughout your career, respect your team’s expertise, use data, and trust your judgment to make the most informed decisions possible. If you don’t get the desired result, then reflect on where potential mistakes were made and improve for next time.

Q: What’s the most valuable leadership advice you’ve ever been given?
A: Be open to innovative ideas and change. Just because you and your team have done something one way, doesn’t mean that’s always the best strategy moving forward. Looking for ways to continuously improve – and encouraging your teams to embrace a similar mindset – can take your team’s performance to the next level.

Q: What’s the most important lesson you’ve learned about leading in a challenging environment?
A: When times are tough, it’s more important than ever to be there for others. Make sure your team knows your door is always open – whether to brainstorm ideas to get a deal across the finish line, discuss challenges of the day, or to celebrate wins. The key is not only to say you’re in the trenches with them to support their success — but to show them.

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Phoenix 2Q23 Multifamily Market Insights Report: Rents stabilize at midyear, setting the stage for a rebound

Highlights:

  • Market conditions in Phoenix outperformed expectations during the second quarter. Net absorption has been particularly strong, with demand in the first half of 2023 already outpacing the total for all of 2022. Renter demand is offsetting much of the impact of a very active development pipeline.
  • Vacancy rose 30 basis points in the second quarter, a period where the local rate nearly always trends higher. At 6.7%, area vacancy is up 130 basis points year over year.
  • Rents inched higher in recent months, offsetting a modest dip from the start of the year. Rents are $1,616 per month at midyear. Current rents are down 2.7% from peak levels recorded one year ago.
  • While property operations have steadied, investment activity has remained limited to date. Sales velocity slowed in the second quarter but did gain some momentum in June. Cap rates averaged about 5.3%.

Read the report

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Tucson 2Q23 Multifamily Market Insights Report: Vacancy elevated, but rents still push higher

Highlights:

  • The Tucson multifamily market posted a mixed performance during the second quarter, as rents advanced while the vacancy rate pushed to a new high. Development activity remains strong as projects totaling 584 units have been delivered to this point in 2023.
  • The local vacancy rate rose 60 basis points during the second quarter, reaching 8.1%. Year over year, vacancy increased by 230 basis points.
  • Rent growth accelerated in recent months after holding fairly steady in the previous three quarters. Rents rose 1.6% during the second quarter to $1,182 per month. Local rents increased 2% during the past 12 months.
  • Multifamily sales activity has been light to this point in the year, as only a few transactions closed during the past six months. Most properties are selling with cap rates between 5.75% and 6.25%.

Read the report

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Phoenix 1Q23 Multifamily Market Insights: Vacancy flat in response to heightened absorption

Highlights:

  • Operational performance in the Greater Phoenix multifamily market was fairly steady to start 2023. Vacancy was flat and rents inched lower by a few dollars per month. The pace of new development is forecast to accelerate in the coming quarters, which should lead to increases in the local vacancy rate.
  • After rising throughout 2022, vacancy stabilized in the first quarter of this year. The rate held steady at 6.4%, matching the figure at the end of last year. During the past 12 months, vacancy has pushed up 160 basis points.
  • Rents ticked lower in the first quarter, dipping to $1,614 per month. This followed a sharper decline at the end of 2022. Year over year, average rents have dipped 0.6%, although many suburban submarkets have recorded more significant declines.
  • Investment activity remained light at the start of this year, although there was an uptick in activity in March, particularly in sales over $90 million. Cap rates trended higher, reaching an average of 5.3%. The median price has retreated, totaling $233,700 per unit year to date.

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Don Vedeen featured in MHN: Despite a slow start, manufactured housing continues to grow

MINNEAPOLIS, MINN. (April 19, 2022)—According to Northmarq’s recently released MH report featured in MHN, 2022 ended well for supply and demand in the manufactured housing sector. Regardless of delivery and investment activity slowing in Q422, the national manufactured housing market had a strong year, with a national occupancy rate recorded at a 40 bps increase at the end of Q422.

“Although there is still an incredible appetite for MHC acquisitions in the market, we are still seeing a delta between what sellers are willing to accept versus what buyers can offer,” said Don Vedeen, vice president for national manufactured housing investment sales with Northmarq. “The return metrics have been severely affected by the increase in interest rates.”

We can expect total shipment volumes for 2023 to draw near the average levels between 2018 and 2020, according to Vedeen. “The drop will be more associated with a slowing pace of economic growth and new household formation in 2023,” he said. “But the factors that support demand for manufactured housing—specifically the elevated costs of rental and for-sale housing—are expected to remain in place throughout the remainder of this year.”

Some topics featured in the report include:

  • Employment trends
  • Supply growth
  • National and regional occupancies
  • Rents by region
  • Sale prices by state

Read the full story.

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Wall Street Journal speaks with Trevor Koskovich as current economic climate impacts multifamily demand

MINNEAPOLIS, MINN. (April 4, 2023) – Apartment-building sales have declined since a stretch of record-setting transactions peaked in late 2021, reported the Wall Street Journal (WSJ) in its April 4 article, “Apartment Building Sales Drop 74%, the Most in 14 Years.” Higher cost to finance and interest rates, regional banking turmoil, flat or declining rents, and falling rent growth are combining to slow demand for the industry’s pillar property type. With apartment values shrinking, many landlords won’t sell at the current lower prices.

“Now that landlords can’t raise rents as before, they are trying to maintain the value of their properties in other ways,” Trevor Koskvoich, president – investment sales, told WSJ. When rents were on a steep upward trajectory, “it was OK to be less discerning in your operations,” he said. Today, cutting costs, making repairs, and extra effort to keep current tenants are methods being employed to maintain property values.

In Northmarq’s 2023 Multifamily Outlook, a similar shift was recorded from the beginning of 2022, leading in to 2023. Initially, the first round or two of rate hikes had minimal impacts on cap rates, but yields began to trend higher during the second half of 2022. The consistent upward trajectory of interest rates, coupled with a less robust leasing environment has widened the expectations gap between buyers and sellers.

This year, 475,000 units are forecasted to be completed (up 20 percent from 2022 levels). While the pace of supply growth in 2023 is largely predetermined by projects that are currently underway, absorption levels are expected to bring uncertainty to the multifamily market. But, according to WSJ, amid the slowdown, opportunities will still be present. Forced sales, for example, are expected to increase. Investors who purchased properties recently with short-term, floating-rate debt are now seeing those loans cost more to pay down than they did when they first borrowed. In summary, borrowers might have to sell their properties if they aren’t bringing in enough cash to pay off their monthly debts. “We’re in the very early stages,” noted Koskovich.

Read the full story.

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Manufactured Housing Q4 Market Insights: Occupancies elevated, rents on the rise

Highlights:

  • Both supply and demand growth for manufactured housing slowed somewhat during the fourth quarter, offsetting an otherwise strong year of performance in the sector. Despite some slowing late in the year, most property performance metrics ended 2022 in healthier positions than they were at the beginning of the year.
  • Occupancy in the fourth quarter ticked up 10 basis points to 94.4 percent. The rate rose 40 basis points in 2022, ticking higher across all major regions in the country.
  • With conditions tight, rents surged 6.7 percent in 2022, reaching $633 per month. The pace of rent growth accelerated in the past year; rents advanced 4.4 percent in 2021.
  • After a decline in the third quarter, transaction activity slowed again to close out 2022. Rising financing costs are offsetting strong operational performance, although cap rates have begun to rise in response to the new capital markets environment. Prices still advanced in 2022, reaching $57,600 per space.

Read the report

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Northmarq’s multifamily investment sales teams named among Connect Media’s 2023 Top Brokers

MINNEAPOLIS, MINNESOTA (March 28, 2023) — Northmarq’s multifamily investment sales teams of the Carolinas, Dallas, Midwest, and Phoenix offices have been named among Connect Media’s 2023 Top Brokers for Atlanta and Southeast, Texas, Chicago and Midwest, and Phoenix and Southeast. The teams were chosen based on 2022 total dollar volume and total number of transactions.

Southeast: The Northmarq Carolinas investment sales team of Allan Lynch, Andrea Howard, Caylor Mark, Jeff Glenn, and John Currin closed 30 deals in 2022 across North and South Carolina, totaling more than $2.1 billion. Read the full story.

Texas: Northmarq’s Dallas multifamily investment sales team of Taylor Snoddy, Phillip Wiegand, Eric Stockley, and Charles Hubbard completed 103 transactions in 2022, totaling $2.6 billion. Read the full story.

Chicago and Midwest: Parker Stewart, Dominic Martinez, and Alex Malzone of Northmarq’s Midwest office closed 26 deals totaling $650 million during 2022, covering multifamily markets in seven states. Read the full story.

Phoenix and Southwest: Northmarq’s Trevor Koskovich, Jesse Hudson, Ryan Boyle, and Logan Baca of the Phoenix office sold and financed more than $3.6 billion in 2022, including more than 20,400 units and 150 transactions. Read the full story.

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Don Vedeen analyzes trends in the manufactured housing industry with Multi-Housing News

PHOENIX, ARIZONA (February 10, 2023) – Don Vedeen, vice president for national manufactured housing investment sales with Northmarq, was highlighted in a recent story published in Multi-Housing News (MHN) titled, “Are Manufactured Homes a Good Investment in 2023?” The story surveys a group of industry experts as they investigate the historically stable assets class, and offer their predictions.

Vedeen told MHN that in 2022, investors compressed cap rates to levels that would have been deemed “laughable” 12-to-18 months earlier. But rapidly increasing interest rates threw a wrench into investment volume in the second half of the year.

“Many investors put a full stop on acquisitions, which has slowed the market down. Buyers are looking at the higher interest rates as an opportunity to buy properties at a higher cap rate or lower valuation,” he said. “The problem is that owners have grown accustomed to having brokers ‘wow’ them with inflated values and that isn’t happening right now. Buyers are looking for a deal, while sellers are holding onto hope of a large sale price… I see this as a waiting game to see who gives in first—buyers or sellers.”

One the key points Vedeen made to MHN focused on how manufactured housing projects could be employed to mitigate the U.S.’s housing shortage as financing traditional housing development becomes increasingly difficult “There needs to be more regulation allowing manufactured housing to increase its supply,” he said.

Northmarq has been involved in several manufactured housing developments over the past few years, but compared to traditional apartment developments, new manufactured housing communities are almost nonexistent. In Texas alone, for example, the brokerage estimated that some 20,000 MHC units were at some stage of development at the beginning of this year, but the need for affordable housing in the state is incomparably higher.

“Just Googling affordable housing need in Texas shows a need for over 600,000 rentable units right now,” Vedeen said. “Manufactured housing could help that but the red tape to get the communities built is exhausting.”

When asked about what lies ahead, Vedeen stated that “Investors need to plan for the long term. I envision the market to continue to cool down in the first and the second quarter, but I think at some point a domino will fall and investors will begin buying again and compressing cap rates despite the interest rate.”

Read the full story.

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Phoenix Q4 Market Insights: Renter demand cools despite continued job gains

Highlights:

  • After recording some of the strongest operating conditions in the country in recent years, multifamily market fundamentals cooled across the Greater Phoenix region at the end of 2022. Vacancy rose as completions outpaced renter demand, and rents fell in response to the supply-demand imbalance.
  • Vacancy rose 60 basis points during the fourth quarter, reaching 6.4 percent. The rate spiked 210 basis points in 2022, the first year that local vacancy pushed up since 2016.
  • Following a minimal dip in the third quarter, rents contracted at a faster clip to close the year. Rents dropped 2.2 percent in the fourth quarter, reaching $1,616 per month. Despite the declines in the second half, rents inched up 2 percent in 2022.
  • Fewer multifamily properties traded in the fourth quarter, and prices dipped after steep increases in recent years. The average cap rate in the fourth quarter exceeded 5 percent. The median price for the full year was $286,900 per unit, but fell to $242,400 per unit in transactions that closed in the final three months of 2022.

Read the report

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Tucson Q4 Market Insights: Transaction activity slows, but large sales continue

Highlights:

  • Operating conditions in the Tucson multifamily market softened during the fourth quarter, as asking rents decreased for the first time in roughly seven years, and local vacancy spiked. Renter demand in 2022 was slightly negative, after absorption totaled approximately 1,150 units in 2021.
  • After tightening for the past few years, area vacancy was on an upward trajectory in 2022. The rate trended higher for the fifth consecutive quarter in the final three months of the year. Vacancy rose 110 basis points in the fourth quarter, reaching 7.4 percent. Year over year, the rate spiked 300 basis points.
  • As vacancies continued to push higher, operators brought rents lower. During the fourth quarter, asking rents decreased by less than 1 percent to $1,157 per month. Despite the recent dip, rents still advanced 5.2 percent in 2022.
  • Transaction volume in the last three months trailed levels recorded during the previous quarter. Prices continued to push higher as the median sales price for 2022 reached $149,700 per unit, up 32 percent from the median price last year.

Read the report

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Trevor Koskovich selected by AZ Big Media leader to watch in CRE for 2023

PHOENIX, ARIZONA (January 23, 2023) – Trevor Koskovich, president – investment sales, joined the company of Arizona’s top male CRE leaders who received AZ Big Media’s recent “25 Male Leaders to Watch in CRE for 2023” recognition.

The award comes in the context of an atmosphere where It’s hard to know what to expect from Arizona’s economy in 2023. The labor market remains tight, with low unemployment, high levels of labor market churn, and a tremendous number of open jobs. But any income gains we are making are more than offset by inflation. Rising mortgage interest rates and low affordability have combined to generate a decline in home sales. The publication notes that as the industry ventures deeper into 2023, one thing is certain: Arizona is filled with brilliant minds and innovative companies that are certain to guide us through any economic storms that come our way.

The editorial board for Az Business and AZRE magazines met with Arizona industry leaders during the previous year to identify the AZ Big 100 for 2023: The 100 people and companies who will shape Arizona’s business community in 2023.

Read the full story.

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Northmarq selected by AZ Big Media as commercial real estate company to watch in 2023

PHOENIX, ARIZONA (January 18, 2023) – The editorial board for Az Business and AZRE magazines met with Arizona industry leaders to identify the AZ Big 100 for 2023. The list was celebrates the brilliant minds and innovative companies that are equipped to guide the industry through economic storms, such as rising mortgage interest rates and low affordability combining to generate a decline in home sales.

In October, Northmarq, a leader in commercial real estate capital markets, announced the completion of its acquisition of Stan Johnson Company (SJC), a real estate brokerage and advisory firm that focuses on investment sales across multiple asset classes. The acquisition also includes the purchase of Four Pillars Capital Markets (FPCM), a debt/equity intermediary for commercial real estate assets.

The acquisition of these two firms means Northmarq now has nearly 1,000 professionals across its investment sales, debt/equity financing, loan servicing and fund management operations. The expanded company transacts $23 billion in debt/equity volume and $15 billion in investment sales volume annually, and services a commercial loan portfolio in excess of $76 billion.

With the addition of SJC and FPCM to its existing multifamily sales platform, Northmarq will now offer services across all major property types, including office, healthcare, industrial, retail, self-storage, multifamily and more.

Also in October, Northmarq’s Debt and Equity team of Brandon Harrington and Tyler Woodard secured a $33,327,212 construction loan for the development of The Aster at Mountain Vista in Mesa. The ground-up development is a joint venture between Scottsdale-based Ascent Companies and Stave Properties, with Crown Builders as the general contractor.

“The capital markets for construction financing are challenging but we cast a wide marketing effort and were able to secure a fixed rate construction loan for this project,” Harrington says. “Lenders are still active for best-in-class developers and projects given the continued lack of supply in certain areas of Phoenix.”

Northmarq’s Phoenix office offers investment sales expertise for multifamily and manufactured housing properties and a complete range of financing options for all types of commercial real estate. Northmarq’s Phoenix office serves the entire Southwestern region.and can arrange commercial real estate loans for any property type through its unmatched network of lending partners. Northmarq is an industry-leading capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales, and loan servicing. Northmarq combines industry-leading capabilities with an open, flexible structure, enabling its team of seasoned professionals to create innovative solutions for clients.

See the full story.

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Ryan Boyle of Northmarq’s Phoenix office promoted to vice president

PHOENIX, ARIZONA (January 17, 2023) — Northmarq’s Phoenix investment sales office announced that Ryan Boyle has been promoted to vice president. He will continue to work under the mentorship of Jesse Hudson, managing director, and Trevor Koskovich, president – investment sales. As vice president, Boyle will continue to specialize in private capital multifamily sales throughout the Southwestern United States. Additionally, he will coordinate with the ten debt and equity experts four other brokers also in the Phoenix office.

“Ryan has been an integral part of the team since joining in his role as associate,” said Hudson. “We are excited to see Ryan deliver the same superior level of service to clients seeking multifamily solutions in Phoenix and the Southwest, while also using his fresh perspective and local expertise to find new opportunities.”

Boyle attended Arizona State University where he earned his Bachelor of Arts in Communications and is a licensed agent with the Arizona Department of Real Estate.

“I am grateful for all the mentorship Jesse and Trevor have provided since my start at Northmarq. I look forward to continuing to utilize the Northmarq platform to provide clients with industry leading multifamily service and solutions,” said Boyle.

Recently, Boyle completed the following sales:

  • Luxury rental home community – $53 million; 144-unit build-to-rent community in Mesa, Arizona. Read the full story.
  • Enclave on Bethany – $25 million; 120-unit multifamily property in Glendale, Arizona. Read the full story.
  • Montecito – $22.3 million; 92-unit multifamily property in Glendale, Arizona. Read the full story.
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Build-to-Rent financing expert Shannon Hersker joins Northmarq’s Phoenix debt/equity team

PHOENIX, ARIZONA (January 12, 2023) — Northmarq’s status as a leading Build-to-Rent platform was further solidified with the addition of Shannon Hersker, senior vice president, to the company’s Phoenix debt/equity team. She is responsible for originating debt and equity solutions through bank, debt fund, life company and direct Fannie Mae and Freddie Mac financing. With a specialty in financing build-to-rent (BTR) projects, Hersker will assist clients with sourcing equity, construction lending, bridge debt and permanent financing. She will collaborate with the Northmarq investment sales team on BTR acquisitions and dispositions.

“We are thrilled to have Shannon join the Phoenix Northmarq debt and equity team. Her experience and knowledge in the build-to-rent sector will continue to distinguish our national build-to-rent platform as the preeminent one stop shop for build to rent investment sales along with permanent and construction debt and equity,” said Brandon Harrington, managing director. “Shannon’s competitiveness and drive to deliver exceptional results for her clients is a great cultural fit at Northmarq.”

Hersker entered the BTR space in its infancy, allowing clients to access her unique perspective and knowledge of the product type for their financing inquiries. Prior to joining Northmarq, she was Director of Capital Markets at Walker & Dunlop for five years where she was responsible for nationwide loan originations for multifamily, BTR and commercial assets. She worked with developers, investors, and owners to provide debt solutions through various lending sources. In her role, Hersker created a national dedicated Build for Rent platform and became a leader in the BTR financing space.

“I couldn’t be more excited to join what I would consider the nation’s top build-to-rent platform. Working in conjunction with our financing experts, as well as our national investment sales team will allow me to problem solve and take a full-service approach to find solutions for clients,” said Hersker.

Hersker is involved in several industry organizations, including NAIOP, Valley Partnership and Urban Land Institute (ULI). She has taken on many leadership roles within ULI, including serving as a Partnership Forum Group Leader for seven years. Currently she is a Co-Vice Chair of the Membership Committee, sits on the Trends Day Committee, and is a ULI NEXT Group Facilitator for the third consecutive year. Additionally, she volunteers as a classroom facilitator through the Urban Plan program and has participated in Philanthropy events for under privileged children in the Phoenix area.

Hersker graduated from the W.P. Carey School of Business at Arizona State University. She earned a Bachelor of Science degree with a major in marketing and a minor in communications. In addition to receiving her ALTA Certifications, Title 101 and Title 102, Hersker is currently earning her Commercial Investment Member (CCIM) designation.

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Manufactured Housing Q3 Market Report: Fewer properties trade, despite rapid rent gains

Highlights:

  • Shipment volume of manufactured housing units is ahead of the pace recorded in recent years. Approximately 90,000 units have shipped throughout the country, including 28,200 units in the third quarter.
  • Occupancy levels stabilized in the third quarter, following eight consecutive quarters of increases. The occupancy rate ended the third quarter at 94.3 percent, 40 basis points higher than one year ago.
  • Year over year, average rents have surged 6.7 percent, reaching $625 per month. Rents advanced 2.5 percent in the third quarter alone, topping the 2.2 percent rise recorded in the preceding period.
  • Sales velocity slowed from the second quarter to the third quarter as borrowing costs hampered deal flow. Cap rates have begun to push higher, and buyers and sellers are adjusting expectations to reflect the new market conditions. Prices have remained elevated; the median price to this point in 2022 is approximately $58,500 per space.

Read the report

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Tucson Multifamily Market Insights: Rents post modest quarterly increase, even as vacancy ticks higher

Highlights:

Tucson Multifamily market report snapshot for Q3 2022
  • The Tucson multifamily market recorded mixed performance in the third quarter. Vacancy rose, but rents also trended higher. Absorption cooled despite continued growth in the local labor market. Fewer properties sold, but transactions closed at higher prices.
  • Apartment vacancies increased for the fourth consecutive quarter. The rate rose 60 basis points during the third quarter, closing at 6.3 percent.
  • Even as vacancies rose, rents still pushed higher. Rents reached $1,165 per month, 10.6 percent higher than one year ago. The pace of gains moderated in recent months.
  • Transaction activity slowed somewhat in the third quarter, but sales volume to this point in 2022 has closely tracked levels from one year earlier. The bulk of the activity has occurred in larger transactions in recent months. The median sales price year to date has climbed to $142,500 per unit, up 26 percent from the 2021 median price.

Read the report.

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Phoenix Q3 Market Insights: Softer multifamily conditions despite continued job gains

Highlights:

Phoenix Multifamily market report snapshot for Q3 2022
  • While the local economy is still growing at a steady pace, operating conditions in the Phoenix multifamily market cooled in recent months. Future growth drivers remain healthy, and current property fundamentals are stronger than the market’s long-term averages.
  • Vacancy rose 40 basis points in the third quarter, reaching 5.8 percent. The rate is up 180 basis points after reaching an all-time low one year ago.
  • For the first time in more than a decade, rents inched lower in the third quarter, dipping 0.5 percent to $1,652 per month. Despite the minimal quarterly decline, current rents are up 7.1 percent year over year.
  • The investment market softened during the third quarter as interest rates pushed higher. Cap rates rose, averaging 4.25 percent, while the number of property sales slowed.

Read the report

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Christopher Gitibin joins Northmarq’s Phoenix office as senior vice president of debt/equity

PHOENIX, ARIZONA (October 6, 2022) — Northmarq’s Phoenix office has announced the addition of Christopher Gitibin as senior vice president – debt/equity. Gitibin will advise clients on multifamily debt/equity, including Fannie Mae, Freddie Mac, HUD, debt funds, local banks, and Northmarq’s premier life company network.

Prior to Northmarq, Gitibin served for more than seven years as director of capital markets in the Phoenix Walker & Dunlop office, focusing on a unique array of multifamily debt/equity solutions for private and institutional investors. He has served as an integral part for many clients in raising equity and providing competitive capital.

In his role as senior vice president, Gitibin works alongside the production team in Phoenix to assist clients with financing in the commercial real estate market. Additionally, Gitibin will coordinate with the eight investment sales experts also in the Phoenix office.

“We couldn’t be happier to have Christopher join the debt and equity team in Phoenix where he is a perfect cultural fit,” said Harrington. “Chris has an unrelenting drive for achieving exceptional results for his clients and will be invaluable to our growing team at Northmarq. His background complements the unparalleled expertise of our capital markets financing business in the southwest.”

Gitibin is a graduate of the W.P. Carey School of Business at Arizona State University. He received his master’s degree from The Thunderbird School of Business Management with a focus on International Business Administration. In addition, he received his Arizona insurance license, and holds an active Arizona real estate license. Gitibin has been an active member of the Phoenix ULI association, NAIOP, AMA, and has participated in several philanthropy events for under privileged children in the Phoenix area.

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Brandon Harrington shares insights with AZ Big Media: Here’s how the build-to-rent boom is re-shaping Phoenix

PHOENIX, ARIZONA (September 27, 2022) – Brandon Harrington, senior vice president/managing director of Northmarq’s Phoenix debt/equity office, recently provided expert analysis the build-to-rent industry in an AZ Big Media story titled “Here’s how the build-to-rent boom is re-shaping Phoenix.”

Phoenix and the greater Maricopa County are ground zero for BTR growth. Northmarq’s team recently sold the land and arranged financing for the development of Honeycutt Run build-to-rent community.

Topics covered include Phoenix market fundamentals, drivers of demand and consumer preference. Harrington noted that elevated home prices and the current interest rate environment make it difficult to qualify and afford a home mortgage, which is driving demand for multifamily options like BTR communities.

“I’m super bullish on multifamily, BTR and all forms of housing, because we do have a lack of supply,” Harrington explained. “We have major population growth, and we have huge job growth. A lot of those jobs aren’t even here yet, so I think we’re going to continue to see huge demand for housing going forward.”

Read the full story

The story was published on the AZ Big Media website on September 27, 2022.

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Jesse Hudson promoted to managing director – investment sales in Northmarq’s Phoenix office

Phoenix, Arizona (September 6, 2022) — Jesse Hudson has been promoted to managing director – investment sales in Northmarq ’s Phoenix office. Hudson joined Northmarq in 2018 as vice president – investment sales and has been a driving force in the growth of the Northmarq investment sales business. Since joining the company, Hudson has overseen more than $5 billion in transaction value thanks to developing winning strategies and brokering solutions for multifamily investment sales acquisitions and dispositions.

In his new role, Hudson will co-lead the Phoenix investment sales team, along with Trevor Koskovich, president. He will also continue coordination with the nine debt/equity experts also in the Phoenix office.

”Jesse has been an integral part of our team since day one of Northmarq’s successful break into the investment sales arena,” said Koskovich. “Having worked side-by-side with Jesse for many years, I am excited to see the value his oversight and co-management of the office provides our clients.”

Prior to joining Northmarq, Hudson served for five years as an associate vice president for HSK Multifamily at Colliers International. He is a graduate of Arizona State University.

Recently, Hudson collaborated with his Phoenix-based team to secure the following:

  • The Residences of Central Phoenix– $63.07 million; 265-unit garden style community in Phoenix, Arizona. Read the full story.
  • Two BTR Communities – $185.89 million; TerraLane at Canyon Trails (Goodyear, Arizona) contains 263 luxury-built homes; TerraLane at South Mountain (Phoenix, Arizona) contains 148 luxury-built homes. Read the full story
  • The Waterfront Apartments – $75.3 million; 288-unit garden-style community in North Phoenix, Arizona. Read the full story.
  • The Nolan – $92 million, 288-unit garden-style community in Mesa, Arizona. Read the full story.
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Brandon Harrington, Bryan Mummaw and James DuMars recognized by ConnectCRE with Top Mortgage Brokers & Lenders award

PHOENIX, ARIZONA (July 27, 2022) – Brandon Harrington, managing director, Bryan Mummaw, managing director, and James DuMars, managing director of Northmarq’s Phoenix debt/equity team were selected by ConnectCRE as recipients of their Top Mortgage Brokers & Lenders award. The recognition honored top industry leaders and professionals who experienced an especially impactful year in 2021.

The Phoenix team finished within the top 10 offices in 2020 and 2021 for the company nationwide, completing 127 transactions totaling more than $2.39 billion the previous year.

The team highlighted their wide range of executions, ranging from $3.7 million to $191 million, as well as a recent four-property, $315-million portfolio with a debt fund execution.

See the full recognition.

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Tucson Q2 Multifamily Market Insights: Rent growth accelerates, even as vacancy pushes higher

Highlights:

Tucson multifamily market report snapshot for Q2 2022
  • The Tucson multifamily market showed signs of returning closer to stable performance in the second quarter, following a volatile past few years. Vacancy followed its historical trend of pushing higher during the summer months. Rents showed continued strength, rising nearly 3 percent in the past three months.
  • Apartment vacancies in Tucson trended higher for the third consecutive quarter, rising 90 basis points to 5.7 percent. In the past 12 months, vacancy has increased by 130 basis points.
  • The pace of rent growth accelerated in the second quarter. Rents advanced 2.9 percent to $1,159 per month in the second quarter, building on a 2.3 percent gain at the start of 2022. Year over year, the average rent in Tucson climbed 16.8 percent.
  • During the second quarter, the median sales price was $125,000 per unit, nearly identical to pricing in the first quarter. Transaction activity increased from the start of the year, and the average cap rate remained steady at about 4 percent.

Read the report

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Phoenix Q2 Multifamily Market Insights: Investment activity gains momentum, prices push higher

Highlights:

Phoenix Multifamily market report snapshot for Q2 2022
  • Construction of new units is accelerating in the Phoenix multifamily market, and the quickening pace of development is bringing supply and demand closer to equilibrium. Apartment construction levels should remain elevated for the next several quarters.
  • Vacancy has trended higher in each of the first two quarters of 2022. The rate rose 60 basis points in the second quarter, reaching 5.4 percent. Year over year, vacancy has spiked 130 basis points, following a period of rapid declines since mid-2020.
  • Even as absorption slowed, rents continued to push higher. Average rents are up 18.6 percent year over year, reaching $1,661 per month at the end of the second quarter.
  • Following a record-setting year in 2021, the investment market is off to a stronger start to this year. The pace of transactions accelerated in the second quarter, and prices surged. The median price reached $300,000 per unit in the first half of the year, 35 percent higher than in 2021. Cap rates have averaged 3.5 percent.

Read the report

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After ‘tsunami’ of 1031 deals in 2021, what’s next?

MINNEAPOLIS, MINNESOTA (June 16, 2022) – Trevor Koskovich, president of Northmarq’s Investment Sales platform, was called upon by Southeast Multifamily & Affordable Housing Business to share his insights into the 1031 business, specifically on deal velocity and current market conditions amid a choppy economy, the rise of DST’s and legislative threats to like-kind exchanges.

Brokers and qualified intermediaries expect rising interest rates to impact transaction volume of like-kind exchanges, but they emphasize that investors are still motivated to defer paying capital gains taxes.

Southeast Multifamily & Affordable Housing Business: Has your company carved out a niche within the 1031 exchange arena? Do you work with certain types of property investors exclusively? Do you concentrate on specific markets or regions in the country?

Koskovich: Our 1031 niche is really geared toward the private investor. We serve primarily family offices, syndicators and high net-worth investors. Northmarq Investment Sales has a national footprint and we are actively transacting 1031s across our national platform.

Read the full story.

The article appeared in the May/June 2022 edition of Southeast Multifamily & Affordable Business.

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Phoenix Q1 Multifamily Market Insights: Investment Activity in 1Q Ahead of 2021 Pace

Highlights:

Phoenix Multifamily market report snapshot for Q1 2022
  • Apartment properties posted mixed performance in the first quarter with rents rising, investment activity elevated, but a rise in vacancy. The mixed conditions followed a year of unprecedented growth in 2021, and the market is forecast to remain healthy throughout the remainder of this year.
  • After vacancy trended lower throughout nearly all of 2020 and 2021, the rate has risen in each of the past two quarters. During the first quarter of this year, vacancy rose 50 basis points to 4.8 percent. Year over year, vacancy is up 30 basis points.
  • Rents in Greater Phoenix continue to trend higher, increasing 2.5 percent in the first quarter to $1,624 per month. In the past 12 months, rents have spiked 27 percent, one of the most rapid increases of any market in the country.
  • The investment market remained active during the first quarter. More properties sold in the first three months of this year than during the same period in 2021. Prices continue to push higher at a rapid clip, with the median price reaching $270,800 per unit. Cap rates have begun to level off, averaging 3.25 percent in the first quarter.

Read the report

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Tucson Q1 Multifamily Market Insights: Rent Growth Persists, but at a More Gradual Pace

Highlights:

Tucson multifamily market report snapshot for Q1 2022
  • Demand for multifamily units in Tucson leveled off during the first quarter, following a year of rapid growth. Vacancy rose, generally in older units, while rents continued to push higher. A healthy labor market is forecast to support operating conditions through the remainder of this year.
  • Apartment vacancy rose 40 basis points in the first quarter to 4.8 percent. This marked the second consecutive quarter where the rate ticked higher, following several years of gradual declines. During the past 12 months, the rate has risen 50 basis points.
  • Asking rents finished the first quarter at $1,126 per month, 23.2 percent higher than one year ago. Rents increased 2.3 percent during the first quarter.
  • Fewer apartment properties sold at the start of this year, following a rapid pace of deal flow at the end of 2021. In deals that closed in the first quarter, the median price was approximately $125,000 per unit, while cap rates averaged around 4.2 percent.

Read the report

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Tuscon Q4 Multifamily Market Report: Additional Rent Growth Likely as Labor Market Rebounds

Highlights:

  • The Tucson multifamily market closed a very strong 2021 with rents continuing to advance at a rapid clip. Developers were active throughout the year, and 2022 is expected to be another year of healthy construction levels.
  • Vacancy in Tucson recorded a minimal increase in 2021. The rate rose 10 basis points for the year to 4.4 percent. This marked the first annual vacancy increase in Tucson since 2012.
  • Apartment rents in Tucson continued to increase during the fourth quarter, rising 4.5 percent. For all of 2021, rents spiked 23.7 percent, reaching $1,100 per month.
  • The sales of apartment properties accelerated in the final months of the year, nearly doubling total transactions from the previous quarter. The median sales price rose to $113,200 per unit while recent cap rates averaged 3.4 percent.

Read the report

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Phoenix Q4 Multifamily Market Report: After a Year of Rapid Growth, Further Gains Likely in 2022

Highlights:

  • The Phoenix multifamily market recorded its strongest year on record in 2021. Continued demand fueled rent growth that was as rapid as any major market in the country. Developers are moving projects through the construction pipeline to keep pace with demand growth, while investors are aggressively pursuing potential acquisitions.
  • After reaching an all-time low during the third quarter, the vacancy rate crept up 30 basis points in the fourth quarter, reaching 4.3 percent. For the full year, vacancy retreated 30 basis points; this marked the fifth consecutive year vacancy has tightened.
  • Rents in Greater Phoenix spiked 27.9 percent in 2021, one of the strongest increases in the country. Rents reached $1,584 per month at the end of the fourth quarter, nearly $350 per month higher than at the end of 2020.
  • The local investment market reached new highs in 2021. Transaction activity spiked throughout the year, particularly in sales of large complexes. Per-unit prices pushed higher, surging 30 percent from 2020 to 2021. Cap rates compressed throughout the year with many properties changing hands with cap rates between 3 percent and 3.25 percent in the fourth quarter.

Read the report

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The New Hotbed for Build-To-Rent Communities? Phoenix

Other Western cities are also seeing a surge in development and investment activity

PHOENIX, ARIZONA (December 22, 2021) – Trevor Koskovich, president – investment sales, shared his insight in Western Real Estate Business on one of the hottest asset classes in the U.S. rental housing market: build-to-rent communities. Topics include: Who is Renting, Phoenix Inventory Doubling, and Capital Pouring In.

Demand for these properties, defined as “purpose-built, single-family rentals,” has been particularly insatiable in Phoenix and across the Western United States, and there are no signs of a slowdown as demand continues to outpace supply. Thousands of new units are being built.

Renters are attracted to the BTR lifestyle as it offers the advantages of a single-family home without the responsibilities of owning a house. It also provides the convenience of low-maintenance apartment living, but with more space and privacy.

These detached units also come with backyards as well as communal amenities like pools, dog parks, party spaces and fitness centers. Single-family renters are generally “stickier” than typical apartment renters because they view the home as a longer-term commitment, resulting in higher renewal rates than apartments.

Read the full story.

 

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Tucson Q3 Multifamily Market Insights: With Vacancies Low and Demand Elevated, Rents Spike

Highlights:

Tucson multifamily market report snapshot for Q3 2021
  • The Tucson multifamily market posted continued improvement during the third quarter. The vacancy rate fell even as developers continued to bring new units to the market. Fueled by tightening vacancy rates and continued renter demand, rents remained on a steep upward trajectory.
  • Vacancy dropped 30 basis points during the third quarter with the rate falling to 4.1 percent. Year over year, area vacancy is down 40 basis points, with a minor decline likely in the fourth quarter.
  • Apartment rents in Tucson continued to surge during the third quarter, advancing 6.1 percent after an 8.5 percent spike in the second quarter. Rents have increased 21.5 percent year over year, ending the third quarter at $1,053 per month.
  • The pace of multifamily property sales accelerated during the third quarter, spiking 20 percent from levels recorded in the second quarter. Prices are on the rise, with the median price reaching $97,300 per unit year to date, while cap rates have averaged approximately 5 percent.

Read the report

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Phoenix Q3 Multifamily Market Insights: Rapid Rent Growth Fueling Investment Market

Highlights:

  • The Phoenix multifamily market continued to post some of the strongest operating conditions in the country during the third quarter. Rents spiked again, building on gains from the preceding three months, while vacancy rates ticked lower for the fifth consecutive quarter.
  • After reaching its lowest point on record during the second quarter, the local vacancy rate tightened again in the third quarter. Local vacancy fell 10 basis points to 4 percent in the third quarter; year over year, the rate has declined 80 basis points.
  • Rents continued to spike in the third quarter, reaching $1,543 per month. Area rents have increased 27.3 percent in the past year, with the greatest increases occurring in the second and third quarters.
  • Sales of multifamily properties remained quite active during the third quarter, closely tracking levels recorded in the second quarter. Transaction activity has surged among newer properties. Prices are rising, with the median price year to date up more than 20 percent from 2020 levels. Cap rates have continued to compress as investor demand has intensified.

Read the report

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Northmarq’s National Build-to-Rent team issues special research report for booming market segment

Report identifies new markets, market drivers, and investment opportunities

MINNEAPOLIS (Oct. 15, 2021) – Northmarq, which is an industry leader in the growing build-to-rent market, has issued its Oct. 2021 special report, authored by the company’s national Build-to-Rent team and Research Director Pete O’Neil. Led by Jeff Erxleben, executive vice president/executive managing director, and Trevor Koskovich, president-Investment Sales, the group of 12 experts in debt, equity, and investment sales, has completed more than $1.5 billion in single-family built-to-rent sales transactions in the U.S. and has over 15 active listings and assignments.

“While this property type first appeared in Phoenix, we are now seeing activity across the country and built a team focused on the asset from start to finish. By combining financing and sales experts on the same team, we can provide the best insights to clients across the country,” said Koskovich.

As part of the specialty practice group’s responsibilities, they work with Northmarq’s Director of Research Pete O’Neil to compile a research report twice a year. The second half report, issued today, identifies three key trends:

  1. Financing continues to be more plentiful for investors in this market. Early in the development cycle, institutional and GSE lenders stayed away from this product, primarily because it was viewed as disjointed single-family homes rented without strong oversight. With the explosion of interest in the product, BTR communities consistently have a master-planned development of single-family homes for rent, often with significant amenities comparable to traditional multifamily.
  2. New markets appear in the development pipeline monthly, with recent growth in the Carolinas and Dallas-Fort Worth. In DFW, 25 projects are underway, slated to deliver more than 3,000 homes in the next 18 months. In Charlotte, nearly two dozen projects totaling more than 2,800 units are either under construction or in the planning phases in the Charlotte metro area.
  3. Renter demand drives this product, as occupancy nears 100 percent in almost every community. This demand is coming from older renters looking for flexibility to younger families looking for more space than a traditional apartment. For both types of tenants, the increasing costs related to owning are making leasing increasingly attractive.
    “More and more traditional multifamily lenders, including the GSEs, life insurance companies, traditional banks and private debt funds, are financing these properties. We’ve seen debt providers offering more attractive terms as this market expands and the competition from lenders trying to gain traction,” said Erxleben.

Billions of dollars of debt and equity capital are moving into this investment class with new entrants on the scene seemingly monthly. Lenders recognize build-to-rent’s impressive fundamentals and are offering developers and investors new options for structuring their financing. What was a niche product in only a handful of markets a couple of years ago is spreading across some of the fastest-growing areas of the U.S., particularly the Southwest, Texas, and the Southeast.

See Northmarq’s report here.

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Tucson Q2 Multifamily Market Report: Low Vacancy, Elevated Absorption Fuel Rising Rents

Highlights:

Tucson multifamily market report snapshot for Q2 2021
  • The Tucson multifamily market recorded healthy performance during the second quarter with a rapid pace of absorption putting
    significant upward pressure on rents. Demand is forecast to remain elevated in the coming quarters, while new units will be
    delivered to boost the inventory of available units.
  • Vacancy inched up 10 basis points during the second quarter, but at 4.4 percent, the rate is only slightly higher than the market’s all-time low. Year over year, area vacancy has declined 90 basis points.
  • Rent growth spiked during the second quarter, as owners responded to tight conditions and a surge in renter demand to implement healthy rent gains. Average rents ended the second quarter at $992 per month, up more than $100 per month since the end of last year.
  • The number of property sales slowed during the second quarter, following more than a year of steady activity. Despite the recent dip in transactions, prices are on the rise, and cap rates have compressed to just 5.1 percent.

Read the report

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Phoenix Q2 Multifamily Market Report: Rents Spike in Response to Accelerating Demand Growth

Highlights:

Phoenix Multifamily market report snapshot for Q2 2021
  • A surge in demand and a lack of available supply resulted in a record-setting period of rent growth in the Phoenix multifamily
    market in the second quarter. Demand was fueled by a surging local labor market and in-migration from neighboring areas. Apartment construction is picking up, which should help bring supply and demand more closely in balance.
  • Vacancy reached an all-time low during the second quarter, falling 40 basis points to 4.1 percent. Year over year, vacancy has tightened by 160 basis points.
  • Rents spiked in the second quarter, reaching $1,401 per month. Rents were pushed higher by an accelerating pace of renter demand and extremely low vacancies.’
  • Net absorption during the second quarter totaled almost 5,000 units, nearly doubling the figure from the first quarter. Through the first half of 2021, net absorption has exceeded 7,600 units.
  • After rising to start the year, sales of local apartment properties surged in the second quarter, spiking by approximately 50 percent. The median price year to date has risen to $197,500 per unit, while cap rates have compressed to 4.3 percent.

Read the report

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NorthMarq’s Phoenix office closes Q2 brokering the sale of more than 2,300 units totaling nearly half a billion in sales volume

PHOENIX, ARIZONA (July 14, 2021) – NorthMarq’s Phoenix investment sales team of Trevor Koskovich, Bill Hahn, Jesse Hudson, and Ryan Boyle ended the second quarter of 2021 closing 15 unique multifamily transactions with a combined sales volume of $419,715,000. Additionally, NorthMarq’s debt and equity team financed nine of the fifteen transactions with combined loan amounts of $280,453,537.

“We are continuing to grow the NorthMarq brand, we have opened several new offices and we hope to continue the momentum throughout the year with an even more successful third and fourth quarters,” said Trevor Koskovich, President of Investment Sales with NorthMarq.

“Out of state investors, particularly investors from the West Coast, continue to see the potential of the multifamily family market in Phoenix. Between job growth, new developments and the cost of the living, Phoenix is the ideal location for buyers to receive tremendous returns on their investments.”

Notable transactions included:

  • Glen Arbor, an 87-unit apartment property located in Phoenix, which was acquired for $11.25 million with a bridge loan of $10.152 million.
  • Vibe on Thomas, a 100-unit multifamily property located in Phoenix, AZ. NorthMarq originated the $11.91 million bridge loan.
  • Revival on 7th, a 67-unit garden-style apartment property located in Phoenix, AZ sold for $9.725 million.
  • Danbury Residences, A 17-unit Single Family Detached Home Community located in Phoenix, AZ transacted at $7.3 million.
  • Summerhill Place, a 232-unit property located in Glendale and Villas at Montebello, a 100-unit apartment located in Peoria sold to the same buyer and was financed with a bridge loan for a combined loan of $47.15 million.
  • Christopher Todd Communities at Mountain View, a 217-unit a premier single-family rental located in Surprise, AZ transacted north of $295,000/unit.
  • Terrace Park, a 213 unit in Phoenix, AZ traded at $37.6 million at 80% loan to cost.
  • Revival on Indian School, 96-units in Phoenix, AZ was acquired for $18.4 with a $14.885 million debt fund loan
  • Desert Gardens, A 307-unit in Glendale sold for $47.5 million with 80% loan to cost
  • Solano Pines, a 108-unit in Phoenix was sold for $22 million ($203,740 per unit) and financed with bridge debt
  • Station 19, a 61-unit garden-style community sold for $213,000 per unit.
  • IVilla, a 214-unit apartment located in Phoenix was acquired for $30 million.
  • Arcadia Walk, a 148-unit complex located in Phoenix was financed with a floating rate through Freddie Mac at $32.7 million.
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Investor appetite for manufactured housing fuels cap rate compression

Manufactured housing is no longer the overlooked property type that it once was. It was one of the best performing sectors in 2020, and that performance is attracting new capital to the space and heating up competition for investment sales.

Manufactured housing has gone from a niche asset class to a sector that is in the spotlight thanks to its proven ability to deliver stable cash-flows with rent collections that remained consistent even during the pandemic. According to NorthMarq’s latest research report, occupancies at manufactured housing communities held fairly steady at 93.7% during first quarter with annual rent growth at a healthy 4%.

Buyer demand is evident in strong market pricing and cap rate compression. Cap rates averaged approximately 6.5 percent during Q1 – 50 basis points lower than the average cap rate for 2020. If interest rates stay the same, those cap rates could move lower this year.

Following robust sales activity in the fourth quarter, transaction volume did drop sharply in first quarter by about 40%. However, that slowdown is not surprising considering the flurry of activity that occurred late last year due to pent-up demand from the pandemic and uncertainty ahead of the November presidential election. People moved up their investment timelines due to questions about what a new administration would mean for changes in tax law.

Sales activity is regaining momentum in second quarter and transaction volume could very well jump in the second half of the year as debate heats up on President Biden’s proposed tax changes. There has been an uptick in for-sale inventory hitting the market in second quarter as some owners look to get ahead of potential increases in the capital gains tax rate or changes that would limit the use of 1031 Exchanges.

While there is no shortage of for-sale inventory, the opportunities that are available are becoming more expensive. People need to be thoughtful in their proformas and where they can take a manufactured housing community, because most of the deals on the market today are going to require some work to create stable, cash-slowing assets.

As buyer competition continues to heat up, some of the larger buyers – the REITs and private equity groups – also are expanding their investment criteria to win deals. Previously, the larger buyers were focused on acquiring 200-site communities and five-star communities in good markets. Now those same buyers are willing to consider smaller manufactured housing communities or slightly lower quality that come with the potential to do clean-up, make improvements and improve leasing. Those value-add buying opportunities are proving to be worth the time and effort as they result in attractive returns for investors.

Looking ahead, new manufactured housing communities in the development pipeline have the potential to elevate the asset class by providing quality, safe, clean affordable housing options for people. NorthMarq is helping to source the debt and equity for some of these projects, including a $150+ million construction loan for a project in Texas that is expected to develop nearly 4,000 new manufactured housing sites. The new communities are helping to further distance the sector from the outdated stigma of a “trailer park” traditionally associated with the sector. As other states see successful communities emerging as affordable housing solutions, it could prompt those states to approve legislation that would make it easier to develop new manufactured housing communities. Such activity would be a big positive for the industry as it would create new investment opportunities and expand the inventory of institutional-quality assets.

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Don Vedeen selected as winner of Connect 2021 Next Generation Awards

Don Vedeen, vice president in NorthMarq’s Phoenix office, was among the winners announced for the Connect Commercial Real Estate 2021 Next Generation Awards. In one of the most challenging years on record for the industry, the recipients overcame the hurdles and excelled in business and leadership in the community.

Vedeen leads NorthMarq’s Manufactured Housing Communities practice group, which has grown to seven professionals and more than $300 million in sales transactions and loan referrals for 5,000 total sites since 2019.

Highlights from Vedeen’s nomination include:

  • Vedeen has been able to transition his team into not just brokerage but being on the forefront of new manufactured housing development projects, including an ongoing opportunity of more than 3,000 sites.
  • By mid-2021, Vedeen and his team completed $300 million in sales representing 5,000 properties.

From a competitive field of nominations, Connect selected 100-plus winners representing each of the following regions: National, California, Seattle & Pacific Northwest, Phoenix & Southwest, Texas, Chicago & Midwest, Boston & New England, New York & Tri-State, Washington, D.C., Atlanta & Southeast, and Florida & Gulf Coast.

The award was originally posted on the Connect CRE website.

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NorthMarq arranges $55 million sale and financing of two-property multifamily portfolio in Arizona

PHOENIX, ARIZONA (May 12, 2021) — San Diego-based Tower 16 Capital Partners has acquired a two-property multifamily portfolio consisting of 332 units in the greater Phoenix area for $55 million. Summerhill Place Apartments is in Glendale, Ariz., and consists of 232 units built in 1986. The Villas at Montebella Apartments, located in Peoria, Ariz., includes 100 units built in 1974. The properties were acquired from a private seller in an off-market transaction.

Tower 16 was represented by Jesse Hudson, Bill Hahn, Trevor Koskovich, and Ryan Boyle with NorthMarq’s Phoenix multifamily team. NorthMarq also secured debt financing for the buyer, led by Brian Mummaw, Brandon Harrington, and Tyler Woodward.

“This acquisition marks our third and fourth properties acquired in the Phoenix market,” said Tower 16 Co-Founder Mike Farley. “We believe the demand drivers for multifamily housing in Phoenix will continue to grow in the coming years, and we are excited to be providing a naturally affordable product to meet that demand.”

Since its founding in 2017, Tower 16 has made similar moves into markets throughout the West, having acquired approximately 4,000 units in California, Las Vegas, Phoenix, Tucson, and Denver. The company seeks markets with increasing demand for workforce housing driven by job growth and in-migration but with relatively low levels of new supply. According to company executives, Tower 16 intends to build a portfolio of more than 2,000 units in the Phoenix market over the next several years.

Summerhill Place Apartments

Summerhill Place is located at 6801 W. Ocotillo Road in Glendale, Ariz. The property is just minutes away from Highway 60 and only a few miles from major employment centers on the west side of Phoenix. Villas at Montebella is located at 10860 N. 85th Ave. in Peoria, Ariz., and is conveniently located between Highway 60 and 101 loop. Tower 16 will be overseeing close to $6 million in upgrades and renovations at both properties including modernized unit upgrades, a new clubhouse, gym, and updated pool areas. The company will also be adding outdoor amenities including barbeques, seating, and outdoor gaming areas.

Villas at Montebella

“We plan on making numerous upgrades to modernize the properties and provide a better tenant experience,” said Tower 16 Co-Founder Tyler Pruett. “We’re excited to watch the transformation of these properties over the next six to 12 months, and we think our tenants will be very happy.”

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Phoenix Q1 Multifamily Market Report: Prices Rise, Cap Rates Compress to Start 2021

Highlights:

Phoenix Multifamily market report snapshot for Q1 2021
  • Healthy operations in the first quarter set the stage for another strong year in the Phoenix multifamily market. Vacancies continued to tighten, and rents posted one of the strongest quarterly gains on record.
  • Vacancy dipped 10 basis points to 4.5 percent in the first quarter. Year over year, the rate has fallen 90 basis points.
  • Asking rents spiked 3.3 percent in the first quarter, reaching $1,279 per month. Rent growth in the past 12 months has totaled 6.8 percent.
  • This year will be an active one for new construction, as developers move projects through the pipeline to meet renter demand. Projects totaling nearly 23,000 units are currently under construction, up from 13,000 units one year ago. Deliveries are forecast to total approximately 11,000 units in 2021.
  • Sales of multifamily properties surged in the first quarter, with sales velocity outpacing year-earlier levels by 16 percent. Prices rose, with the median price reaching $197,500 per unit to start the year, and cap rates compressed.

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Tucson Q1 Multifamily Market Report: With Vacancies Tight, Rents Posting Sharp Increases

Highlights:

Tucson multifamily market report snapshot for Q1 2021
  • Vacancies in the Tucson multifamily market remained at historically low levels in the first quarter, supporting rapid rent growth and prompting new development. Investors are responding to the strengthening market conditions by pushing per-unit sales prices higher.
  • After vacancy dipped to a 25-year low at the end of last year, the rate held steady at 4.3 percent in the first quarter. Year over year, vacancy in Tucson is down 90 basis points.
  • Asking rents continued their upward surge to start 2021, finishing the first quarter at $914 per month. Local rents have spiked 8.9 percent in the past year.
  • After a very steady level of activity in 2020, sales velocity dipped approximately 12 percent to start this year. Despite a modest dip in activity, the median price advanced from levels recorded in 2020, and cap rates held steady.

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FHA/HUD Expert Brad Burns joins NorthMarq

MINNEAPOLIS, MINNESOTA (February 5, 2021) – Brad Burns, a 15-year FHA/HUD origination expert, joins NorthMarq as a senior vice president based in the Phoenix office. During the last few years, he originated more than $1 billion in financing through HUD, Freddie Mac, Fannie Mae, banks, and debt funds, focusing on multifamily, affordable, and seniors/healthcare properties.

His extensive experience with HUD-insured loan products offers clients specific expertise navigating the HUD loan process from origination all the way to closing.

Prior to joining NorthMarq, Burns spent four years as senior director in Walker & Dunlop’s FHA group and six years in Berkadia’s FHA group. While at Berkadia, he also served as an FHA MAP-approved underwriter.

Burns joins NorthMarq’s Phoenix office, one of the fastest growing in the company, where he will partner with Managing Director Brandon Harrington, and collaborate with the seven other debt and equity experts and team of 15 investment sales professionals.

“We’re extremely excited that Brad has joined our Phoenix team,” said Harrington, managing director – debt and equity, Phoenix. “His expertise in FHA/HUD is second to none and will bring great value to our multifamily clients when evaluating their best options for financing.”

In business since 1960, NorthMarq has grown to more than 600 employees through more than 20 acquisitions, a $64 billion loan servicing portfolio and access to hundreds of capital sources.

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Phoenix Q4 Multifamily Market Report: Property Sales Accelerate and Prices Spike to Close 2020

Highlights:

Phoenix Multifamily market report snapshot for Q4 2020
  • The Phoenix multifamily market posted strong performance in 2020, particularly in the second half of the year when absorption spiked, vacancy tightened, and rents rose. Healthy levels of absorption are forecast to persist into 2021, and developers will continue to bring thousands of new units to the market to meet this demand.
  • Vacancy reached an all-time low during the fourth quarter, tightening to 4.6 percent. The rate fell 100 basis points in 2020, with all of the improvement recorded during the second half of the year.
  • With vacancy improving, asking rents rose 2.1 percent in the fourth quarter, reaching $1,238 per month. For the full year, rents rose 5.4 percent.
  • Developers continue to move new projects into the construction pipeline. Nearly 11,000 rental units were delivered in 2020, and more than 20,000 units are currently under construction.
  • Sales of multifamily properties gained momentum during the fourth quarter. With activity picking up, prices rose. The median price spiked 24 percent in 2020, reaching $170,900 per unit. Cap rates were steady for most of the year, averaging 4.9 percent.

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Tucson Q4 Multifamily Market Report: Low Vacancy Sparks Rapid Rent Growth

Highlights:

Tucson multifamily market report snapshot for Q4 2020
  • The Tucson multifamily market closed 2020 on an upswing, sustaining the momentum that was achieved during the third quarter. The local vacancy rate dipped to its lowest level in more than two decades, and rents continued to post healthy gains.
  • Vacancy fell 120 basis points in 2020, the eighth consecutive year where the rate trended lower. The local vacancy rate dipped 20 basis points during the fourth quarter, falling to 4.3 percent.
  • Local asking rents advanced 2.5 percent in the fourth quarter, ending the year at $889 per month. Multifamily rents in Tucson spiked 7 percent in 2020, one of the country’s most significant increases.
  • Sales of apartment properties surged during the fourth quarter, capping off a strong year of investment activity. Sales velocity rose approximately 35 percent from 2019 to 2020, with the fourth quarter representing the period of the most transactions. For the full year, prices and cap rates closely tracked levels from 2019.

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NorthMarq promotes two Investment Sales experts

MINNEAPOLIS, MINNESOTA (January 19, 2021) — NorthMarq announced two promotions in the company’s fast-growing investment sale business, which now offers multifamily investment sales in 16 offices across the U.S.

Jesse Hudson, based in the Phoenix office, was promoted to senior vice president due to his rapidly growing business pipeline and a strong network of recurring clients. Gabe Tovar, based in Kansas City, was promoted to vice president following his leadership on a new Kansas City construction report and the creation of a technology platform to support business growth that led to a dramatic increase in production volume.

Trevor Koskovich, president – Investment Sales, said that while the overall team had strong production in 2020, Hudson and Tovar also led larger initiatives and developed new business strategies.

“Jesse has been part of my team for nearly 10 years, growing from a junior broker to an important leader and expert for our clients,” said Koskovich. “Gabe, while still early in his career, brings innovative ideas to both clients and our company.”

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Real Estate Forum selects Trevor Koskovich as one of 2020’s Influencers in Multifamily

Real Estate Forum, the commercial real estate industry’s key monthly publication, selected Trevor Koskovich, president – Investment Sales, as one of 15 Influencers in Multifamily for 2020. Koskovich is leading the growth of NorthMarq’s Investment Sales platform, which has grown into 15 of the company’s 38 offices since April 2018.

In just over two years, the team has grown to over 60 professionals in 15 offices, from fewer than 20 transactions in the first year to more than 120 in 2019 and 2020. The business has already completed more than $3 billion in multifamily sales volume, with $1.5 billion completed in referral business to debt and equity, with hundreds of active listings scheduled to close by the end of 2020.

“Trevor’s enthusiasm and tenacity have helped us build a very successful investment sales platform in a very short amount of time. Not only is he bringing great new talent to NorthMarq, he’s also driving a new level of collaboration between investment sales and debt and equity producers in our local offices, leading to great results for our clients, and feeding new business activity,” said Jeffrey Weidell, NorthMarq’s chief executive officer.

Koskovich is a thought-leader in the industry, appearing frequently in industry publications and events. This month, he is a featured speaker in a Multifamily podcast hosted by John Salustri from Globest.com. Listen to the lively discussion here: Multifamily Investors Ride COVID’s Storm on Strong Fundamentals.”

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Tucson Q3 Multifamily Market Report: Vacancy Tightens, Rents Spike in the Third Quarter

Highlights:

Tucson Multifamily market report snapshot for Q3 2020
  • The Tucson multifamily market posted one of the most statistically sound quarters on record as rents spiked and vacancy fell significantly in the third quarter. These trends were likely more a result of pent-up demand than a market shift.
  • Vacancy fell 80 basis points in the third quarter, reaching 4.5 percent; the rate is down 110 basis points year over year.
  • After holding steady in the second quarter, rents surged in the third quarter, rising 3.3 percent to $867 per month. Year over year, asking rents are up 5.7 percent.
  • The Tucson multifamily market has recorded very steady investment performance through the first three quarters of 2020. Transaction activity has occurred at a consistent pace, the median price year to date is $65,500 per unit, and cap rates have averaged approximately 5.8 percent.

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Phoenix Q3 Market Report: Apartment Market Roars Back in Third Quarter

Highlights:

Phoenix Multifamily market report snapshot for Q3 2020
  • The Phoenix multifamily market had a record period of absorption during the third quarter and the local vacancy rate is at its lowest point in more than 20 years. There is some ongoing economic uncertainty, and apartment construction remains active, so vacancy will likely creep higher by the end of the year.
  • Absorption totaled more than 4,500 units in the third quarter, pushing the vacancy rate down to 4.8 percent. Year over year, vacancy has declined 70 basis points.
  • After a decline in the second quarter, rents rebounded in the third quarter. Current asking rents are $1,212 per month, 4.2 percent higher than one year ago.
  • The construction pipeline continues to fill with new projects. More than 16,700 rental units are under construction, up 50 percent from the figure one year ago.
  • Property sales accelerated in the third quarter, while prices remained elevated. The median price thus far in 2020 is $161,500 per unit, up 16 percent from last year. Cap rates have held steady, averaging 4.9 percent.

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James DuMars featured in Commercial Executive Magazine: The Art of the Pivot

James DuMars, senior vice president/managing director of NorthMarq’s Phoenix office shed some light on the current pandemic in a Commercial Executive Magazine feature titled “The Art of the Pivot.” Discussing his experience getting through previous market upheavals, such as the Savings & Loan Crisis and the Great Recession, DuMars looks into what might be instore for a post-pandemic world.

“I was a college intern at an investment sales firm during the S&L crisis. As the market downturn persisted, I saw establishment professionals at the firm losing cars and luxury homes back to the bank, and in some cases even their life savings they had invested in overleveraged real estate,” said DuMars. “Seeing this had a profound effect on me. Several years later when I was 31, I had my first big year as a top producer for NorthMarq, and instead of spending on a new home and car, I took my first large bonus and paid off all my debts. This gave me clarity and allowed me to focus on my customers’ needs instead of worrying about my financial needs.”

Read the full story and check out our recently completed transactions.

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Phoenix Q2 Multifamily Report: New Supply Coming Online, Even as Demand Growth Cools

Highlights:

Phoenix Multifamily market report snapshot for Q2 2020
  • All markets are being impacted by the COVID-19 outbreak, but to this point, the Phoenix multifamily market has performed quite well. Vacancy is only slightly higher than one year ago, and that is due largely to seasonal factors and an increase in new supply.
  • Vacancy rose 30 basis points during the second quarter, reaching 5.7 percent. Increases in the summer months are common; the rate has risen during the second quarter in each of the past 10 years.
  • Rents dipped slightly in the second quarter as the market softened and uncertainty surrounding the economy rose. Asking rents ended the second quarter at $1,184 per month, up 4 percent year over year.
  • Multifamily development is active in 2020. Developers completed more than 7,200 apartment units during the first half of the year, with another 15,100 units currently under construction.
  • Investment activity slowed but has not stopped completely, and prices and cap rates are demonstrating continued strength. The median price is up 20 percent year to date, reaching $166,000 per unit, while cap rates are averaging 5 percent.

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Multifamily Debt Expert Brandon Harrington joins NorthMarq

Brandon Harrington, a well-respected multifamily debt expert, joins NorthMarq to collaborate with the company’s eight-person multifamily investment sales team led by Trevor Koskovich, president-Investment Sales. Harrington, managing director-multifamily debt and equity, is a significant originator of multifamily debt across all capital sources, closing nearly $1 billion in multifamily financing transaction volume in the last two years.

“We’re extremely excited to bring Brandon’s best-in-class execution to our team, but beyond that, he will be a meaningtful part of our growth strategy,” said Jeff Erxleben, executive vice president/regional managing director. “By combining forces with our investment sales experts in the southwest, we expect Brandon to help us create the dominant multifamily platform in the region.”

For the last two years, Harrington worked for JLL as managing director within its Capital Markets group. Previously, he was managing director at Walker & Dunlop, and has worked for Cohen Financial.

“I’m very happy to join NorthMarq to bring additional energy and leadership to the company’s growth in Phoenix and across the Southwest,” said Harrington. “NorthMarq has a great debt platform in place, and I’m excited to bring our deep knowledge of the multifamily capital markets to help grow their market share.”

Harrington joins NorthMarq’s Phoenix office and its four additional debt and equity professionals, along with the investment sales team.

In business since 1960, NorthMarq has grown to more than 600 employees through more than 20 acquisitions, a $61 billion loan servicing portfolio and access to hundreds of capital sources.

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Phoenix Q4 Market Report: Investment Volume Surges to Close 2019

Highlights:

Phoenix 4Q 2019 market snapshot
  • The Phoenix multifamily market recorded a very strong 2019, with rents posting sizable gains and vacancy creeping lower. Conditions cooled slightly during the fourth quarter, which may be an early indication of a more modest pace of growth in 2020.
  • Vacancy ended 2019 at 5.6 percent, 10 basis points lower than at the end of the preceding year. The rate ticked up 10 basis points from the third quarter to the fourth quarter.
  • Asking rents spiked 9.4 percent in 2019, one of the most significant rises in the country. Rents ended the fourth quarter at $1,175 per month.
  • Projects totaling more than 8,200 apartment units were delivered in 2019, and the development pipeline includes nearly 13,200 additional units currently under construction. In recent years, demand has been sufficient to absorb the new development while keeping vacancy in a tight range.
  • Multifamily investment activity surged in 2019, with momentum growing throughout the year. The median price spiked, reaching $138,600 per unit for the full year and approaching $150,000 per unit in the second half. Cap rates averaged 5 percent in 2019, with lower rates recorded in the closing months of the year.

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Tucson Q4 Market Report: Strengthening Jobs Outlook Supporting Apartment Fundamentals

Highlights:

Tucson Q4 2019 market snapshot
  • The Tucson multifamily market closed 2019 on an upswing, with local employers adding workers, rents rising, and the vacancy rate tightening.
  • Vacancy dipped 10 basis points in the fourth quarter, ending the year at 5.5 percent. The rate fell 60 basis points from the end of 2018 to the close of 2019.
  • Asking rents trended higher throughout 2019, ending the fourth quarter at $831 per month. Average rents rose 5.7 percent during the year.
  • Investment activity slowed in the fourth quarter, and sales velocity in 2019 was down approximately 35 percent from 2018 levels. While fewer properties sold, prices pushed higher; the median price reached $74,800 per unit, while cap rates compressed to an average of 5.5 percent for the year.

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Griffin Martin promoted to managing director of NorthMarq’s Phoenix office

PHOENIX, ARIZONA (January 29, 2020) – The Phoenix office of NorthMarq announces the promotion of Griffin Martin to managing director. In his new role, Martin will lead the office and manage the daily debt/equity operations of the Phoenix office along with managing director James DuMars to provide a complete range of financing to the entire Southwestern region and nation through its unmatched network of lending partners.

“James and I share similar core values including ‘taking care of the customer’ and ‘thinking long term.’ Consequently, I’m excited to partner with James as co-managing director of the Arizona office,” said Martin.

“Griffin has an unrelenting drive for achieving exceptional results and taking care of the customer. These exceptional traits coupled with his leadership skills make him an ideal fit to help me co-lead the Arizona office,” said DuMars.

Martin has been in the commercial real estate industry for more than 15 years. He joined NorthMarq in 2015 as a vice president and was promoted to the position of senior producer in 2018. Martin has cultivated a wealth of experience in NorthMarq’s direct agency lending platforms assisting clients with financing from both Freddie Mac and Fannie Mae. In addition to his multifamily finance experience, Griffin also helps clients access capital sources for manufactured housing, self-storage, office, retail and hospitality.

Martin also has extensive experience in arranging bridge financing and construction financing. He has worked closely with clients seeking to access permanent loans from NorthMarq’s wide array of life insurance companies.

Martin is a graduate from the WP Carey School of Business at Arizona State University (Summa Cum Laude) with a degree in Finance. He holds an active Real Estate license in the State of Arizona and is a current or past member of the Urban Land Institute (ULI), National Association of Industrial and Office Properties (NAIOP), International Council of Shopping Centers (ICSC), and Asian American Hotel Owners Association (AAHOA). In his spare time Martin volunteers as a youth basketball coach at the Scottsdale YMCA.

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NorthMarq’s Phoenix office brings aboard Bryan Mummaw as senior vice president

PHOENIX, ARIZONA (January 15, 2020) – Bryan Mummaw recently joined NorthMarq’s Phoenix-based regional office in the role of senior vice president. At NorthMarq, he will assist in the origination of debt and equity for owners of commercial and multifamily real estate. His experience in both financing and investment sales will benefit clients throughout the entire transaction process.

“I’m excited to join NorthMarq because of their entrepreneurial spirit, their wide array of capital products offered to clients, and synergies with the investment sales and servicing platforms,” said Mummaw.

“Bryan is a rising star in the industry and we are very excited to have him join our team,” said James DuMars, senior vice president/managing director of NorthMarq’s Phoenix office.

Mummaw previously served as a director for Berkadia’s mortgage banking group. In this role, he was primarily responsible for sourcing debt and equity for private capital clients. Between 2017 through 2019, Bryan was part of the Scottsdale Berkadia team that originated more than $1.9 billion in real estate transactions.

Before joining the mortgage origination team at Berkadia, Mummaw served as an associate director for Berkadia’s investment sales group and its predecessor company, Hendricks and Partners. In this role, Mummaw was directly involved with private capital markets and advising clients on multifamily assets. His strong track record and holistic approach allowed Mummaw to effectively sell more than $100 million in multifamily assets for private capital clients.

Prior to Berkadia, Mummaw was director of operations for Fenix Private Capital Group, a boutique real estate firm specializing in the acquisition, rehabilitation and stabilization of distressed multifamily assets and notes.

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Greater Tucson Q3 Multifamily Market Report: Accelerating Job Growth Fueling Vacancy Declines, Rent Gains

Highlights:

  • The Tucson multifamily market continued to gain momentum in the third quarter, with vacancies tightening and rents rising. The investment market strengthened in response to improving market conditions.
  • Vacancy dipped 30 basis points to 5.6 percent in the third quarter, and the rate is down 40 basis points year over year.
  • Asking rents rose 2 percent in the third quarter and are up 6.9 percent in the past 12 months. Current asking rents in Tucson are averaging $820 per month.
  • Investment activity accelerated in the third quarter, while pricing was consistent. The median price has been approximately 75,000 per unit this far in 2019, while cap rates have averaged 5.8 percent in transactions that have closed year to date.

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Phoenix Q3 Multifamily Market Report: Rents Spike Again in Response to Strong Absorption

Highlights:

Phoenix Q3 multifamily market snapshot
  • The Phoenix multifamily market continued to post robust performance during the third quarter. Even as more than 3,200 units came online, the vacancy rate dipped and rents continued their upward climb.
  • Asking rents reached $1,163 per month in the third quarter, 10.1 percent higher than one year ago. Rents rose 2.1 percent from the second quarter to the third quarter.
  • Vacancy dipped 10 basis points in the third quarter, retreating to 5.5 percent. The rate is down 20 basis points year over year.
  • Developers completed more than 3,200 units during the third quarter, and thus far in 2019, more than 7,300 units have come online. Projects totaling approximately 11,200 units are currently under construction.
  • Multifamily sales velocity slowed modestly from the second quarter to the third quarter, but activity to this point in the year is ahead of the 2018 pace. Year to date, the median price is approximately $132,800 per unit, up more than 10 percent compared to the 2018 median price. Cap rates have averaged 5 percent.

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Phoenix Office Multifamily Financing

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Phoenix apartment market remains red-hot; fueling influx of new capital, spike in transactions

It isn’t just temperatures in the Phoenix metro that are scorching; the multifamily rental market is hot as well. And vigorous demand is coming from both renters and investors.

Investors are snapping up apartment properties and paying hefty prices. In the first half of 2019, buyers spent $3.72 billion on 94 Phoenix-area apartments, a 41.8 percent jump from the first half of 2018. Sales in the $50 million and greater range accelerated the most.

What are the driving factors behind strong demand?
Phoenix is the fastest-growing city in the U.S., according to recently released data from the U.S. Census Bureau. Phoenix saw an increase of 25,288 new residents between 2017 and 2018, topping all other U.S. cities.  One reason for that growth: Phoenix remains more affordable than many other large U.S. metros. Many people are flocking to the Valley from high-cost, high-tech cities like Los Angeles and San Diego.  And Phoenix boasts a thriving job market including a fast-growing, high-paying tech sector.

Other booming industries include bioscience/healthcare and financial services. In fact, the Phoenix metro led the U.S. for new jobs created from May 2018 to May 2019 with 66,500 non-farm jobs, representing 3.2 percent job growth, according to a new U.S. Bureau of Labor Statistics report. Another 60,000 new jobs are forecast in 2019.

Robust net migration and job production are fueling the increased demand for new housing in Phoenix. This has led to a multifamily development boom. Developers delivered nearly 2,000 new units in the first quarter of 2019, well ahead of the 2018 pace, and another approximately 10,500 units are in the pipeline.

Despite new construction, Phoenix’s rents remain among the fastest-growing in the U.S. The metro ranked in the top two for the past several years for apartment rent growth. The average rent was $1,105 in the first quarter 2019, up 9.5 percent year over year. Phoenix is forecasted to be a top contender for U.S. rent growth again in 2019. The market also boasts a healthy 94.7 percent occupancy rate.

Meanwhile, Phoenix single-family home prices are expected to hit record highs in 2019 as home appreciation continues to climb.

New capital floods the apartment market
Historically, investors from California have pursued Phoenix apartment assets. But now there is a surge in new large investors from Colorado, Texas, Seattle and Portland. There is significantly more capital in the Phoenix-area market than multifamily properties to acquire, and most deals have upwards of 10-12 offers.

Another factorfueling strong transaction activity is the capital markets. The 10-year Treasury yield over the last 90 days has fallen dramatically, meaning financing for apartments is approximately 100 basis points lower than a year ago. Some of the largest players in the market are both buying and selling assets, even though pricing has increased significantly. This is because the debt they can obtain on new acquisitions is markedly cheaper.

The median price of Phoenix apartments pushed higher to start the year. In the first quarter, it was $136,700 per unit, a 15 percent jump from 2018. The average cap rate compressed by 5 percent and for some newer properties, it is as low as 4.5 percent.

New product emerging on the outskirts
Over the past five years, most new multifamily development has been infill projects in East Valley, Scottsdale, Chandler, Tempe and downtown and midtown Phoenix. However, a new emerging product type is low-density “Single-Family Rental Communities” with 4,400 units stabilized, in lease-up or under construction, and another 2,900 units in the pipeline.

These “lock-and-leave” units are being developed on the city’s peripheral in communities like Goodyear, Gilbert, Buckeye and Peoria, which historically, have seen little new construction. Land is less expensive on the outskirts than urban infill markets and single-level development costs are cheaper.

While urban infill continues, costs continue to rise. Single-Family Rental Communities represent an attractive property type that feels more like a community, with a backyard and no one living above or below. Accordingly, they are drawing strong rents. The two largest renter profiles for this new product are downsizing baby boomers and the more experience-driven millennials.

Baby boomers can live in a home similar to what they are accustomed to without the maintenance headaches and having to tap into their retirement savings for a big down payment. Meanwhile, millennials like the flexibility of a lease, yet want the comfort of a home rather than a high-rise.

What does the future look like?
The Phoenix multifamily market expects to continue to boast strong performance in 2019 and 2020.  Experts anticipate continued rapid rent growth, healthy absorption, strong development activity and an extended run of low vacancy rates. The apartment investment market got off to a quick start to 2019, which has paved the way for what will likely be another dynamic year.

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Tucson Q2 Multifamily Market Report: Vacancy Holds Steady, Rents Rise at Mid-Year

Highlights:

Tucson Q2 market snapshot
  • The Tucson multifamily market recorded its strongest second quarter in approximately 10 years. Vacancy is low and rents are rising, supporting new development and rising property sales prices. As construction accelerates in the second half, there could be some leveling off of market fundamentals.
  • Vacancy in Tucson was 5.9 percent in the second quarter, holding steady during a period where the rate typically pushes higher. The current vacancy figure is 40 basis points lower than the rate one year ago.
  • Asking rents reached $804 per month, a 7.1 percent year-over-year increase. The increase from the first quarter to the second quarter was 1.3 percent.
  • Prices pushed higher and more apartment properties sold during the second quarter, but activity levels continued to trail year-earlier volume. The median price thus far in 2019 is up to approximately $74,800 per unit, while the average cap rate is a tick under 6 percent.

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James DuMars celebrates 25 years with the company

James DuMars in our Phoenix office celebrates 25 years with the company this week! He enjoys traveling and spending time with his family, and he’s known for his ability to recall the details of a deal — even ones closed years ago. Thanks for being part of the team, James!

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Phoenix Q2 Multifamily Market Report: Rents Continue their Upward Climb

Highlights:

Q2 Phoenix multifamily market snapshot
  • The Greater Phoenix multifamily market posted healthy performance during the second quarter. Renter demand is being fueled by continued hiring and with absorption active, rents are pushing higher at an accelerating pace. Asking rents ended the second quarter at $1,139 per month, up 3.1 percent from the first quarter and 9.8 percent higher than one year earlier.
  • Vacancy ticked up 30 basis points in the second quarter, reaching 5.6 percent. The current rate is down 20 basis points year over year.
  • Developers delivered approximately 2,100 apartment units to the market during the second quarter, similar to the total that came online in the first quarter. The number of units currently under construction has increased.
  • Sales of apartment complexes accelerated during the second quarter, and cap rates remained flat at an average of approximately 5 percent.

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Tucson Q1 Market Report: With Rents on the Rise, Cap Rates Compress

Highlights:

Tucson market report indicators for 1Q 2019
  • Operating conditions in the Tucson multifamily market strengthened during the first quarter. Vacancies tightened and rents rose. Apartment completions have been limited to this point but are forecast to accelerate.
  • The vacancy rate dipped 20 basis points in the first quarter to 5.9 percent. This is just the second time in the past 10 years that the rate has fallen below 6 percent.
  • Asking rents continued on their upward trajectory, ending the first quarter at $794 per month. Rents have increased by 8 percent in the past 12 months.
  • The investment market was mixed to start the year. The number of sales retreated, but prices rose and cap rates compressed. The median price reached $62,300 per unit, while cap rates dipped into the mid-5-percent range in transactions that closed during the first quarter.

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CoStar presents NorthMarq with 2018 Power Broker Awards for Top Sales Broker and Top Sales Firm

CoStar recently announced its 2018 Power Broker Awards, celebrating the top CRE firms and brokers in the United States. NorthMarq’s Shane Shafer, managing director of NorthMarq’s Los Angeles office and Taylor Snoddy, managing director of NorthMarq’s Dallas office were recognized as Top Sales Broker in their markets. NorthMarq’s Phoenix and Dallas offices each earned a place in the ranks of Top Sales Firms in their markets.

Shafer and Snoddy were recognized for achieving high levels of sales transaction volume in their regions. The Top Sales Broker award distinguishes individuals based on the CoStar market in which the individual is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See Shafer’s listing here.

See Snoddy’s listing here.

The Phoenix and Dallas offices were listed due to their high levels of sales transaction volume in 2018. The Top Sales Firm award is bestowed upon recipients based on the CoStar market in which the company is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See the Phoenix listing here.

See the Dallas listing here.

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Phoenix Q1 Market Report: Sales Activity Spikes as Rents Continue to Rise

Highlights:

Q1 Market Indicators for Phoenix
  • The Greater Phoenix multifamily market started 2019 with a continuation of the prevailing trends from 2018. Renter demand for apartments was strong, construction continued at a fairly steady pace, and rents posted another quarter of sizeable increases.
  • Vacancy fell 40 basis points during the first quarter, reaching 5.3 percent. The rate is unchanged from one year ago.
  • Asking rents rose by nearly 3 percent in the first quarter, and at $1,105 per month, are up 9.5 percent year over year. The Phoenix metro area is forecast to lead the country in rent growth in 2019.
  • Developers delivered nearly 2,000 apartment units during the first quarter, and approximately 10,500 additional units are currently under construction.
  • Apartment property sales accelerated in the first quarter, and activity is well ahead of last year’s pace. The median price pushed higher to start the year, and the average cap rate has compressed to approximately 5 percent.

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Tucson Q4 Market Report: Sales Activity Accelerates in Larger Transactions

Highlights

Tucson Q4 market indicators
  • The Tucson multifamily market posted strong performance to close 2018. Rents rose during the fourth quarter, and more apartment properties sold at higher prices.
  • Vacancy inched up 10 basis points during the fourth quarter. Despite the rise in the final few months of the year, the vacancy rate ended 2018 at 6.1 percent, down 20 basis points for the full year.
  • Asking rents spiked 2.5 percent in the fourth quarter, reaching $786 per month. Rents posted an annual increase of 7.8 percent in 2018, building on a gain of 6 percent in 2017.
  • The investment market heated up as the year came to a close, with sales activity accelerating and prices pushing higher. Cap rates dipped by about 30 basis points in 2018, averaging approximately 6 percent for the year, while the median price surged to $57,500 per unit. Cap rates averaged approximately 5.5 percent during the fourth quarter.

Download the full report here

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Phoenix Q4 Market Report: Rent Growth, Employment Gains Fueling Phoenix Apartment Market

Highlights

Phoenix Q4 2018 market report indicators
  • The Greater Phoenix multifamily market closed 2018 on a high note, with vacancy remaining low and rents posting significant increases. Renter demand remains strong enough to keep vacancy tight even as new units are delivered.
  • Vacancy was 5.7 percent at the end of the fourth quarter, matching the rate from the third quarter. The rate declined by 10 basis points in 2018, following a 20-basis-point improvement in 2017.
  • Greater Phoenix continues to record some of the strongest rent increases in the country. In 2018, asking rents spiked 8.9 percent, reaching $1,074 per month. Rents rose 1.7 percent during the fourth quarter, a typically slow period for rent growth.
  • Apartment construction slowed during the fourth quarter, and deliveries in 2018 lagged levels from 2017. Projects totaling more than 11,000 units are currently under way, and deliveries will likely pick up in 2019.
  • Sales of apartment properties slowed a bit in the fourth quarter, but transaction velocity in 2018 was nearly identical to 2017 levels. Sale prices pushed higher, with the median price reaching $120,000 per unit. Cap rates compressed in 2018, averaging 5.2 percent for the year and 5 percent in the fourth quarter.

Download the full report here

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NorthMarq Multifamily expands manufactured housing team with addition of sales expert Chris Michl

NorthMarq Multifamily announced today that Chris Michl has joined its national manufactured housing team, which is based in Phoenix, Arizona.

In his new role at NorthMarq, Michl will use his business expertise to market manufactured housing communities and identify buyers and sellers of the asset class. He will also work to expand the team’s presence outside of its primary focus in the southwest.

Michl arrives at NorthMarq after five year in staffing/recruiting companies, where he facilitated staffing needs by identifying and recruiting talent. His experience includes developing strategic partnerships, assessing business requirements and analyzing client satisfaction.

“Chris is a great addition to our manufactured housing team,” said Trevor Koskovich, president – NorthMarq Multifamily. “With his diverse sales experience, he brings a great new perspective to our clients and our business.”

Michl graduated from the University of Iowa with a Bachelors in Business Management and is originally from the Chicago area.

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Phoenix Q3 Market Report: Apartment Rents Remain on an Upswing

Report highlights:

  • 3QResearchReport-PHX_Indicators_250pxConditions in the Phoenix multifamily market strengthened during the third quarter. Vacancy tightened and rents spiked. The investment market responded to the favorable fundamentals with an uptick in sales activity.
  • Vacancy in Phoenix fell 10 basis points during the third quarter, reaching 5.7 percent. The rate is unchanged from one year ago and has remained in a tight range since 2016.
  • Rents continue to rise at a rapid rate. Asking rents rose 1.8 percent from the second quarter to the third quarter, reaching $1,056 per month. Asking rents have surged 8 percent during the past 12 months.
  • Apartment deliveries have been on the rise, with more than 2,500 units coming online in the third quarter. Completions have topped 6,300 units year to date.
  • Investment conditions were mixed during the third quarter, with activity picking up as the median price crept lower. Cap rates have remained very consistent throughout the year, averaging 5.3 percent.

Download the full report here

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Tucson Q3 Market Report: Apartment Market Strengthens as Job Growth Gains Steam

Report highlights:

  • 3QResearchReport-Tucson_Indicators_250pxThe Tucson apartment market improved during the third quarter with vacancy dipping and rents posting strong gains. The market is being supported by an accelerating pace of employment growth.
  • Vacancy dipped by 30 basis points in the third quarter, ending the period at 6 percent. The current vacancy rate is 50 basis points lower than one year ago.
  • Asking rents posted another quarterly increase in excess of 2 percent. During the past 12 months, asking rents have spiked by 6.8 percent, reaching $767 per month.
  • Investment conditions cooled a bit during the third quarter with sales velocity slowing and the median price inching lower. Year to date, the median price is $50,000 per unit, while the average cap rate is just under 6 percent.

Download the full report here

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Commercial Executive Magazine features NorthMarq Multifamily $17 Million Sale as Deal of the Week

Commercial Executive Magazine interviewed Bill Hahn and Trevor Koskovich of NorthMarq Multifamily on the recent sale of Urban 188 Apartments. The 188-unit multifamily property, located at 1601 West Camelback Road in Phoenix, Arizona, sold this month for $17 million. The NorthMarq Multifamily team of Bill Hahn, Trevor Koskovich and Jesse Hudson represented both the seller and the buyer in this transaction.

Q: Location was a major component in this deal. What other factors played into the success of this transaction?

A: The fact that the property had just undergone a complete renovation, with all new HVAC units, kitchen appliances and flooring, among other systems. Also, easy light rail access encourages a young, upwardly-mobile tenant base.

Q: Urban 188 was a turn-key asset, does this type of property appeal to most of your investors?

A: Actually, no. Most buyers active today are looking for properties where they can add value by making physical improvements or management improvements, thereby increasing revenue. This particular buyer purchased Urban 188 because he believed in the organic rent growth that would come from the location and other factors mentioned in #1 above.

Hudson also noted that the property’s proximity to the light rail will likely improve property values as it encourages redevelopment and gentrification of the surrounding areas.

Urban 188 apartments, built in 1970, comprises 188-units situated on 22.30 acres. The community is a blend of 57 percent studios units, 42 percent one-bedroom, units and 1 percent two-bedroom units. The property, located on the south side Camelback Road east of 17th Avenue, is near manufacturing and warehousing employment along Interstate 17. Urban 188 is also located along the Metro light rail line with a station located just two blocks west at the intersection of 19th Avenue and Camelback Road, providing easy access to downtown Phoenix, Tempe and Mesa.  The immediate neighborhood surrounding Urban 188 comprises a mixture of single-family homes, multifamily projects, and commercial developments.

Urban 1601 Property LLC, of Phoenix, Arizona, was the buyer. 1601 W. Camelback Rd. LLC, of Las Vegas, Nevada, was the seller.

See the full story here.

The 188-unit Urban 188 apartments is located at 1601 West Camelback Road in Phoenix, Arizona

The 188-unit Urban 188 apartments is located at 1601 West Camelback Road in Phoenix, Arizona

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Koskovich joins panel at InterFace Phoenix Multifamily Conference

Trevor Koskovich, leader of our investment sales business, is among the experts that will share insights into the current state of the market and where it’s going in the next 12 months at the InterFace Phoenix Multifamily conference on September 11.

Expert Insights: Trevor Koskovich, InterFace Phoenix Multifamily Conference, September 11, 2018

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Hahn, Koskovich recognized as Broker Team of the Month in Commercial Executive Magazine

NorthMarq Multiifamily’s Bill Hahn and Trevor Koskovich were recently recognized as Broker Team of the Month in the July/August issue of Commercial Executive Magazine. The team’s submission was prepared and presented by Willmeng Construction. Partners since 2007, multifamily professionals Bill Hahn and Trevor Koskovich have been riding the highs and lows of the Valley’s commercial real estate market for more than a decade. “I remember meeting Trevor for the first time over a lunch in Old Town Scottsdale,” Hahn recalls. “We hit it off and we had a plan.”

Starting Points

Early in 2018, Hahn and Koskovich moved their entire 10-team member operation from Colliers to NorthMarq Capital. The firm is an industry leader in commercial real estate finance with annual production volume of $13 billion and a loan-servicing portfolio of $52 billion on behalf of more than 50 institutional investors and the government-sponsored entities (GSE’s). “We realized this would be a good alliance,” says Koskovich, President of newly created NorthMarq Multifamily Investment Sales group. “We each had what the other wanted.”

Background

Hahn, Executive Vice President of NorthMarq Multifamily Investment Sales, and Koskovich, came to the commercial real estate industry on vastly different paths. “I entered the business with Marcus & Millichap in the early 1980s,” says Hahn. Koskovich, on the other hand, entered the arena with an entrepreneurial energy, having sold two companies he started. “I believed commercial real estate would be a great industry for me,” he says. “I interviewed every firm in town to fi nd out which would be the best fit.” Sperry Van Ness proved the right launching pad for Koskovich. “I knew that working with Bill was ultimately going to offer me the most opportunity and room to grow,” he says. At 27, Koskovich had little idea of the obstacles looming on the horizon. “The market was ready to fall off a cliff. I recall the best advice I gave him,” says Hahn. “He told me, stop talking to owners of commercial real estate and start talking with the lenders,” says Koskovich.

Read what led the Multifamily team to NorthMarq and how they  plan on paving the road going forward!

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Phoenix Rising: James DuMars and Jesse Hudson featured in Western Real Estate Business

These days, it is more than just the temps that are white hot in Phoenix. Competition among both buyers and lenders is heating up in the Phoenix apartment market.

Transaction volume is down from levels set in 2016, but demand is stronger than ever with a record high level of buyers and capital in the market. The common complaint is that there are more buyers than there are for-sale properties.

It is not unusual to have eight to 12 qualified bidders on a deal – twice the number that existed a few years ago. NorthMarq recently brokered a 200-unit, Class C, value-add sale in Phoenix that drew 12 offers with five going into a best and final. At the end, there were four very credit-worthy bidders who all had offers in within $100,000. The financing available for the acquisition was a 10-year fixed rate of 4.40 percent, 75 percent LTV and an initial five-year, interest only.

The main driver behind this appetite for apartments is that buyers see a good growth story. Phoenix has come a long way since its housing bubble burst more than a decade ago. The metro is enjoying strong employment and job growth with more than 50,000 plus jobs being created and 80,000-plus new residents moving to the area annually.

Read why the Phoenix market will remain incredibly competitive for both lenders and investors here.

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Phoenix Office Commercial Financing

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NorthMarq Multifamily featured in GlobeSt.com’s Middle Market Digest

Bill Hahn, Trevor Koskovich and Jesse Hudson of NorthMarq Multifamily in Phoenix and Cynthia Meister of NorthMarq Multifamily in Albuquerque negotiated the sale of Lincoln Heights Apartments in Albuquerque, New Mexico. The transaction was featured in GlobeSt.com’s Middle Market Digest. The 184-unit multifamily property sold for an undisclosed purchase price. The NorthMarq Multifamily team represented the buyer and seller in the transaction. Read the full transaction announcement.

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Phoenix office recognizes long-standing relationship with developer/redeveloper and philanthropist, Michael Pollack

NorthMarq Capital’s James DuMars recently celebrated his office’s decade-long relationship with Phoenix area developer/redeveloper and philanthropist, Michael Pollack. After more than 20 years (and 100+ transactions) of working together, DuMars noted “Michael is a very loyal man, you can’t take a relationship like that for granted. We have a wonderful business relationship built on honesty and respect.” Read the full story here.

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James DuMars featured in National Real Estate Investor

NREI

James DuMars addressed hot-topic items in the retail sector in a recent National Real Estate Investor article titled “Lenders Still Willing to Finance Retail, but Be Prepared for Extra Security.”

The article covers how it’s not entirely business as usual in a retail sector that’s been hit by a double whammy of rising e-commerce sales and shifting consumer shopping patterns. Check out the full story here.

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James DuMars featured in Commercial Executive Magazine

James DuMars authored a featured article in Commercial Executive Magazine titled “Let the Good Times Roll.” In the story, DuMars highlights the annual CREF conference, as well as hitting on high-interest topics including: debt funds gearing up to fund construction/JV Equity/mezzanine loans, securitization, CMBS trends, life companies and agencies. See the full story here.


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