While Phoenix is getting allof the headlines, other Arizona markets are also seeing populationgrowth and strong apartment demand. Tucson is among the hot marketsin Arizona, experiencing population and job growth. As a result,the market is also seeing strong apartment demand and increasinginvestment activity.

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"Multifamily demand in Tucson has been very strong, which hascreated increased occupancy levels across the market," JeffCasper at CBRE multifamily, tellsGlobeSt.com. "Tucson's expanding employment base, specifically intechnology and engineering jobs, has helped drive the robust demandfor multifamily housing. Additionally, multifamily ownershave been investing in the properties to create quality options forarea residents."

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In fact, Tucson is comparable to Phoenix in terms of marketgrowth. "Phoenix and Tucson were two of the top markets in thecountry for rent growth in 2019," Asher Gunter, abroker at CBRE multifamily, says.  "Both metros are seeingdiversified job growth, population growth and heavy in-migrationfrom other states due to their quality of life and relativeaffordability."

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Gunter and Casper recently sold Silverbell Springs, a 290-unitapartment property in Tucson, for $50.25 million. A joint venturebetween The Bascom Group and funds managed by Oaktree CapitalManagement, purchased the property in a deal that is indicative ofthe kind of investor demand that Tucson is seeing. "These tworecent transactions are examples of the attention Tucson is nowgetting from more investors around the country," says Gunter. "Bothassets generated deep levels of interest from the investmentcommunity, and both buyers were new to the market. Investors that have not owned in Tucson are recognizing the area'shealthy multifamily fundamentals. The Tucson market did not bounceback as quickly as other markets in the West, and there is still along runway for growth."

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This year, apartment demand should continue to grow,particularly in terms of investor interest. "We anticipatetransaction volume to continue to climb and continued investorinterest, particularly from new capital sources that arediversifying from other markets in the Western U.S," saysGunter.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.