INLAND EMPIRE, CA—Is there a direct correlation between Phoenix and the Inland Empire? According to a recent brokerage panel at RealShare Apartments, the answer is yes.
“Someone priced out of the deal in the coastal markets run to the Inland Empire or Phoenix,” noted panelist Dean Zander, a senior partner at Berkadia.
“Phoenix tends to expand rapidly and contracts rapidly,” added Cindy Cook, a senior EVP at Colliers International. “There has been a shift happening. I think we will still have swings, but not as deep. We are more diversified.”
According to Cook, Phoenix has higher paying jobs now than it previously had in years past and has grown as a city. “We are a young city for the metropolitan size and I think we have become diversified now, so we are more stable. Not without risk, but the diversification of employment will help.”
According to Cook, “the rent growth we are seeing in phoenix and the projected rents are having an impact on the cap rates.”
Jesus Henao, SVP of NAI Capital, says the Phoenix attraction has a lot to do with the lack of affordability in California. “It is a luxury to live here in CA. But when people can't afford the rent, that is why you see rent growth in places like over in Phoenix. California is doing what it can to maintain affordability, but I am not sure it will keep up.”
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