Four Areas Lead the Way in Phoenix Region’s Apartment Building Boom
The Phoenix region has experienced an unprecedented apartment building boom, with over 16,500 units added and more than 35,000 in progress. This wave of new supply has outweighed recent rental demand, causing vacancy to rise and rent growth to turn negative. The majority of new construction is for luxury apartments, particularly in Downtown Phoenix and Tempe, East Valley, Chandler and Gilbert, and NorthWest Valley and SouthWest Valley. Single-family build-to-rent properties have also contributed to this growth. This imbalance in supply and demand could weaken the Phoenix apartment market in the next 12-24 months.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.