Top Western Markets by Investment Activity

US multifamily investment has ridden a wave of expansion, and despite ongoing global problems, the sector’s momentum is still sustained. With the country’s economy contracting 1.4 percent in the first quarter of 2022 due to a number of reasons including inflation, supply chain issues and the ongoing pandemic, Yardi Matrix expects that growth to slow.

Nationwide, asking rents rose $34.0 in the first quarter, up 2.1 percent — a record increase for the first three months of a year. The increased demand in the sun belt and in the west is showing the first signs of cooling. Year-on-year through March, occupancy rates fell in four US metro areas, led by Phoenix (-0.5 percent) and Las Vegas (-0.4 percent).

The list below shows the major western markets that saw the largest transaction volumes in the first quarter of 2022, based on Yardi Matrix data. During the same period, prices in all markets mentioned here have increased compared to 2021 levels.

rank market Sales volume Q1-2022 Price per unit Q1-2022 Sales volume 2021 Price per unit 2021
1 Phoenix $2.5 billion $312,430 $14.7 billion $261,054
2 Denver $1.3 billion $409,475 $9.9 billion $322,151
3 Las Vegas $979 million $267,905 $4.6 billion $217,022
4 Reno $320 million $308,687 700 million dollars $246,510
5 Colorado Springs $255 million $301,241 $887 million $220,278

5. Colorado Springs, Colorado.

Colorado Springs. Image by Kevin Bree via Unsplash.com

Among western markets, Colorado Springs recorded the fifth-largest sales volume in the first quarter of the year with a total of $254.9 million settled in the first three months. For comparison, in the same period in 2021, the volume reached $230.7 million.

The second most populous city and the largest city in the state of Colorado, according to 2020 U.S. Census data, has experienced healthy population growth, adding more than 100,000 residents over the past decade. Between February 2020 and the same month in 2022, Colorado Springs added 13,844 new jobs, according to data from the Bureau of Labor Statistics.

The largest transaction in the subway multifamily investment market recorded by Yardi Matrix was the $97 million sale of a 12-building garden facility in Monument, Colorado Equus Capital Partners.

4. Reno, Nevada.

According to US Census data, Reno, one of the nation’s leading emerging multi-family housing markets, saw its population increase 15.3 percent between 2010 and 2020. The city’s unemployment rate reached 2.8 percent in February 2022, down from the rate registered two years ago when it was 2.9 percent. During the same period, the labor force grew by 7,443 people.

In the first quarter of the year, multifamily investment in Reno reached $319.8 million, significantly up from $252.7 million recorded in the first three months of 2021. The total sales volume reached $700.1 million last year, almost double the 2020 total volume.

Prices in Reno have increased significantly over the past two years – while the average price per unit reached $214,661 in 2020, that figure rose to $246,510 the following year. In the first quarter of 2022, the average price per unit was $308,687, significantly higher than in the first three months of 2021.

3. Las Vegas

Las Vegas. Image by David Mark via Pixabay

In the first quarter of 2022, Las Vegas multi-family home sales reached $979.5 million, the third-highest of the western markets listed here. In 2021, a total of $4.59 billion in multifamily products was transacted in Las Vegas. Although Subway’s unemployment rate has fallen since hitting a record high in April 2020, the rate has not yet returned to pre-pandemic levels. In February 2022, the unemployment rate reached 5.3 percent, up 1.8 percent from two years earlier. Las Vegas led the nation in December 2021 in annual job growth, reaching 8.8 percent.

Of the five Western markets featured in this article, Las Vegas was the cheapest, averaging $267,905 per unit in the first quarter of the year. Prices have been low in 2021 and 2020, averaging $217,022 and $169,899, respectively.

Logan Capital Advisors made one of the largest purchases of the first quarter of the year with a $97.5 million buy-in in the Summerlin/Spring Valley area of ​​Las Vegas. The seller, Griffin Capitalbought the 220-unit South Beach Apartments for $62 million in 2018.

2. Denver

Despite omicron and economy-related issues, Denver’s recovery is still underway and should continue into 2022. In March, Metro rental growth hit 14.1 percent year-on-year, while projected year-end rental growth was 6.4 percent, according to Yardi Matrix.

Subway sales volume for the first quarter of the year was $1.32 billion, the second-highest on our list, while also achieving the highest unit price for the period at $409,475. The total sales volume for multifamily homes in Denver in 2021 reached $9.96 billion, while the price per unit was also the highest among the five markets that year, averaging $322,151.

In February 2022, Denver’s unemployment rate hit 4.0 percent, its lowest level in two years since March 2020, near the national average of 3.8 percent that month.

In January, MG property group completed one of Denver’s largest purchases recorded in the first quarter of the year. The company bought the 3,300, 564-unit Tamarac Apartments for $141 million Gelt Inc. The buyer supported the purchase with a $91.7 million Fannie Mae loan.

1. Phoenix

Phoenix. Image by Evgeni Tcherkasski via Pixabay

Phoenix has become one of the commercial and residential development hotspots over the past year and is seeing exceptional growth at all levels. The subway’s multifamily investment volume was $2.53 billion in the first quarter of 2022, exceeding Denver’s figure by more than 92 percent. During the same period, Phoenix recorded the second highest price per unit on the same list at $312,430.

Through 2021, Phoenix’s multifamily market has recorded $14.76 billion in multifamily product transactions, more than double the transaction volume in 2020. As of November 2021, rents increased 25.9 percent year-on-year to $1,607 Dollar, outperforming the US interest rate, which was up 13.5 percent to $1,590.

The metro’s unemployment rate reached 3.1 percent in February 2022, down 1.2 percent from the number reported by BLS in the same month of 2020. Employment also increased by 91,810 in those two years.

At the beginning of March, tide stocks– one of the most active players in the market in 2021 – has partnered with CIM Group for the purchase of a 1,012 unit property in Phoenix. The partnership acquired Del Mar Terrace from the original developer in an off-market transaction for $255 million. army development.

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