Urban Living Hatches in Secondary Markets

Urban-style living is coming to secondary markets, thanks to migration from urban core markets to more affordable markets. The perfect example: Aviva, a $63 million apartment development in Phoenix from Housing Trust Group. The developer has delivered the property to tremendous success, breaking leasing records and surpassing pro forma rents. The success of the property illustrates pent-up demand for urban-style living in Phoenix.

“The property has completely outperformed every metric that we look at. It has been a roaring success, and it goes to show that there is pent up demand for high-quality green product,” Matthew Rieger, President and CEO of HTG, tells GlobeSt.com. Aviva is a 325-unit apartment complex with a mix of one-, two- and three-bedroom apartment units and quality amenity package that includes a 150-foot pool, a 9,000-square-foot clubhouse fitness stations and a dog park. The property is 90% leased. “We had a reasonable expectation that we would lease up the property at our expected rents,” Rieger adds. “What has been a surprise is the pent up demand and the premium that people are willing to pay for a product that is appreciably better than the competition.”

Phoenix isn’t the only secondary market that HTG is targeting. The firm has identified Arizona, Texas and Georgia has its target development markets. “We have done a good job of being selective in the markets that we venture into. As we venture out of Florida, it was important to us that we are selecting really good markets that are seeing great growth,” Rieger says. “I see a general migration of people moving from the north to the south; however, that is not necessarily just a New York-to-Miami Beach migration. There are people all over the United States that are moving into a warmer climate and we have tried to identify these other markets and other areas. As a company, we are focusing on Texas, Georgia and Arizona as our next wave of expansion nationally.”