Build-to-rent sales in Phoenix gain momentum in the third quarter

The Phoenix area remains one of the largest and most active locations for single-family build-to-rent properties in the country. The existing inventory of properties totals nearly 30,000 units, and projects totaling more than 5,300 units have been delivered year to date. While area inventory levels have essentially doubled with the delivery of about 5,000 units per year since 2023, vacancies have held up reasonably well. The current vacancy rate is 9.7%, up just 120 basis points from one year ago. With operators facing greater competition for renters, rents have ticked lower, albeit at a more modest pace than in the traditional apartment market. Current rents for build-to-rent properties are about $440 per month higher than rents for apartment units, but are about $1,150 lower than the average monthly mortgage payment on a median-priced for-sale home.

Despite some operational challenges brought on by heightened supply growth, investors continue to acquire build-to-rent properties in the Phoenix area. Transaction counts to this point in the year are ahead of the pace recorded in 2024, supported by an elevated number of sales in recent months. Properties continue to transact in the Northwest Valley and the Southeast Valley, with Glendale, Mesa, and Casa Grande the leading cities for sales activity to this point in 2025. The Goodyear/Avondale area will likely reestablish itself as a top location for transaction volumes in the coming years, although investors may be cautious in the immediate term as the submarket is one of the most active areas in the country for new inventory growth, and investors may wait for properties to fully lease-up before making acquisitions.

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