PHOENIX—With an overall occupancy above historical averages and explosive renter household formations, the Phoenix multifamily market is one to watch. There are multiple forces at play, fueling the multifamily construction cycle, according to ABI Multifamily 's Phoenix MSA second quarter 2016 multifamily construction pipeline report. Thomas M. Brophy , director of research at ABI tells GlobeSt.com: "Despite elevated levels of construction, the Metro's overall occupancy rate has continued its upward trend nearing 96% which is some 6% above historical norms.” Population Growth : Although lower by historical standards which trend 10%-plus, the Phoenix Metro has grown nearly 7% to more than 4.47 million, gaining approximately 282,000 residents. Renter Households : Even more fundamental than population growth has been the absolute explosion of the renter household since 2005. From 2005 to 2013, renter household formation skyrocketed 34%, which if current population estimates hold true, the Metro is now closer to 45%. This impacts more than 175,000 households representing a combined population of approximately 450,000 individuals. Job Growth : This is evident especially in downtown CBDs, such is in downtown Phoenix, Old Town Scottsdale, North Tempe and Mesa's Fiesta District. These areas have recorded 11,000-plus job announcements (many of which pay $45,000-plus per year), corporate relocations and aggressive courting by economic development officials. "The Phoenix Metro multifamily market delivered approximately 2,645 project based units by the end of 2Q 2016 which represents a 29% increase over 2Q 2015," says Brophy. "Additionally, total planned units as of 2Q were 21,081 or 36% increase over 2Q 2015. Scottsdale led the Metro in total project unit deliveries with 910 units delivered. Phoenix, although second in project units delivered, retained the top spot for both total units under construction and planned at 4,041 and 6,399 units respectively. Tempe was third with 2,806 units under construction and 3,959 units planned." ABI Multifamily is a dedicated multifamily brokerage and advisory services firm.

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High Occupancy Rates Remain Despite Strong Construction Activity

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