Phoenix Multifamily Market Counts Nearly $1 Billion in Apartment Sales Midway Through First Quarter Article originally posted on CoStar on March 11, 2019 Last year, apartment sales set a new record in Phoenix as more than $6.2 billion worth of multifamily properties were sold, shattering the previous high of $5.1 billion set in 2016. The average price per unit for apartment properties in Phoenix also soared to a new all-time high of $145,000 per unit, a 27 percent jump from the previous year. Early indications are that investment activity shows no sign of slowing down. Just halfway through the first quarter and nearly $1 billion in apartment sales have already taken place in Phoenix, according to CoStar research, which may be understated considering the lag time between sales and deed recordings. Although it is a small sample size, the current rate of investment puts Phoenix on pace for roughly $8 billion in apartment sales volume in 2019. The growth in pricing continues to pop, putting some downward pressure on capitalization rates. As of late February, the average price per unit for first-quarter sales was approximately $156,000, a 7.5 percent increase from 2018, and the average cap rate was 5.7 percent, a drop of 100 basis points from last year. Investment capital has poured in from multifamily investors making this a top choice for investors on a national scale. In the past 12 months, Phoenix accounts for the fourth-most apartment sales volume in the U.S., tied with Washington, D.C., and trailing only New York, Los Angeles and Atlanta. The top 10 buyers so far in 2019 all hail from outside Arizona. Dallas-based NexPoint Residential Trust made the biggest splash so far with a $132.1 million acquisition of a three-property portfolio totaling 656 units . Another Dallas-based firm, Knightvest Management, remains active after spending $190 million to acquire three Phoenix multifamily properties in 2018. Known for its value-add investment strategy, Knightvest acquired the 1987-built, 480-unit Paseo Park Apartments in Glendale for $62.4 million. Phoenix also ranks in the top 10 for job growth, population and rent among major U.S. markets. Investors have noted that the Phoenix area’s strong in-migration trends are expected to drive apartment demand. Thousands of new residents, many who are of working-age, have poured into Phoenix on a monthly basis, propping up apartment demand at a time when construction is booming. Developers have also responded as the total amount of new units completed last year reached a cyclical high, and new apartment construction is expected to set another high-water mark in 2019. Meanwhile, multifamily vacancies have actually compressed to near historical lows in the first quarter of this year due to continued fervent demand. After generating some of the best apartment rent growth in the nation in the past several years, it appears Phoenix will continue to grab the attention of multifamily investors across the nation in the near term.