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Not every submarket is sharing in this hot Phoenix multifamily era, as we learned at this week's debut Bisnow Multifamily & The Condo Revolution event.  The West Valley has come up short, says PB Bell's Chapin Bell to an audience of 250 Tuesday morning. “The jobs are not as strong. There's more lower-paying jobs there than in Chandler and Tempe.” That's reflected in the West Valley multifamily absorption and rents.  Chapin was part of a panel that included Habitat Metro's Tim Sprague, Kephart's Cindy Harvey, BURY's Kelly Bell, and Lennar Multifamily Investors' Scott Johnson. On West Valley, Scott added: “We're still seeing double-digit vacancy in some submarkets... you can't push rents.”  “I've lived here since 1979, and we're experiencing the biggest urban sprawl that I have ever seen,” Tim says. It has its good side: Rejuvenating neighborhoods and getting rid of pockets of blight. “But the people who live next door go ballistic,” Tim says; proposing infill projects, in particular, tend to produce a neighborhood backlash.  Cindy also addressed another cloud on the multifamily horizon: Rents. Are we pricing out the Millennials—the key demographic developers are attempting to lure. “I still do believe there's a price-point problem with urbanization,” she says. “How much can we saturate the market at $2-plus/SF rents?"  Chapin also warned that escalating construction costs could halt development. A year ago, his project in Chandler cost $75/SF to build. Today: $100/SF. “That's why we don't use union workers, and we get protesters,” (his comment came soon after a surprisingly polite group of protesters was asked to leave when they flashed a banner during the event). Chapin expects 6,300 new units will deliver in Phoenix next year—well above the 4,700 units projected for this year. But, in part because of costs, he expects 2016 to fall to 4,000.  During our breakfast schmooze, we caught up with Legacy Capital Advisors' Keaton Merrell, Jim Pierson, and Alliance Residential's Angie Schmidt. Angie tells us her firm is just finishing up its Broadstone Waterfront project and is angling to begin Stetson Road and 16th and Morten projects. Keaton says there's still plenty of capital for multifamily, especially from Freddie Mac, Fannie Mae, and CMBS debt. |
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From Sun 'n Sand to Sun 'n SurfDifferent climate, same powerful ladies—at CREW Network's national convention in Miami, we ran into Cushman & Wakefield's Barbi Reuter, Cassidy Turley's Christie Veldhuizen, CBRE's Cathy Teeter, Cushman & Wakefield's Jackie Orcutt, Alliance Bank of Arizona's Vicki Williams, and Lincoln Property's Krystal Dill. Barbi was just named COO of PICOR last week, and is working on two big (175k SF and a 400k SF) built-to-suit transactions in Senora, Mexico. Jackie was promoted to market leader of investor services three weeks ago—she says the firm is the top manager of industrial product in Phoenix, with 12M SF in its portfolio, and it hopes to grow brokerage up to that level. |
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30 Days Until the Top Under 40 Developers / Investors Meet in MiamiThe top developers and investors under the age of 40 descend on the Ritz Carlton in South Beach for Bisnow's first annual "Ascent" multi-day summit. See who's attending and apply to be considered for one of the few remaining spots here. |
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Six Reasons You Need Our
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