Optima Kierland Urban high-rise condos Optima Kierland Center’s first tower, 7120 Optima Kierland, is sold out. Sales began in April 2016 and closed 220 homes over a nine-month period, making it the fastest-selling community in the Valley, with triple the number of sales compared to the local market. Optima’s next condominium tower, 7180 Optima Kierland, began sales earlier this year. Says Crel Vogel, sales manager at Optima Kierland, “The location is incredibly important to our buyers. The Kierland location is one of the main drivers of the buyers’ purchase, in addition to the elevated amenities and visionary architecture. Optima Kierland is in a desirable neighborhood steps away from the remarkable dining, shopping and nightlife of Kierland Commons and Scottsdale Quarter. It’s a community passionately dedicated to enhancing healthy, balanced and enriched lifestyles.” optimakierland-condos.com
explains. “Ultimately, having a high concentration of predominately collegeeducated residents in a community serves as a competitive advantage for economic and business development within the City and is a very important factor when competing for new employers to locate or expand their business.” Morrow shared research that showed the Phoenix Metropolitan Statistical Area added 65,000 new jobs to the civilian labor force from March 2017 through March 2018, and 86,800 in calendar year 2018. “We have had sustained job growth for some time now, and the number of people employed in our area is the highest number in history,” he says, noting, “Much of the growth is organic as companies already here continue to expand; however, much of the growth is from California companies relocating to Arizona primarily because it is a less expensive business environment.” A lot of job growth has been in the tech sector — “We are now sometimes referred to as the ‘Silicon Desert,” Morrow says — with financial services and insurance among other leading industries. But unemployment being at the extremely low 4.5 percent will make it harder to fill new jobs, he observes. “In fact, there is currently a shortage of labor in many areas, including construction, technology and healthcare.” The Arizona Office of Economic Opportunity released a report in February projecting Arizona will add 165,691 jobs over a two-year period. From the third quarter of 2018 through the second quarter of 2020, Arizona’s employment is expected to increase from 3,015,242 to 3,180,933, representing an annualized growth rate of 2.7 percent — an increase from last year’s projection of 2.4 percent and more evidence of Arizona’s continued acceleration over the last 12 months. Zeroing in on sectors Morrow identified, the report says Arizona is projected to see the highest job growth rates in construction (5.8 percent) and manufacturing (3.6 percent), with the largest job gains expected in the education and health services and the professional and business services sectors — although gains are projected across all 11 of Arizona’s top industries, according to the Arizona Commerce Authority. “Phoenix’s employment growth is as diversified as we’ve ever seen. These are long-term, sustainable jobs in areas like healthcare, technology, insurance and banking that are expected to provide extended growth. That diversification is further incentivizing multifamily investors to come here,”
says JLL managing director John Cunningham. Thornberg supports the observation that the robust labor market has contributed to a much-improved residential real estate market — although not quite at the pre-Subprime Mortgage Crisis levels — with specific figures: Phoenix’s median home price of$258.300 is an increase of 7.3 percent from September 2017 to September 2018; 42.3 percent over the past five years. Additionally, the increase in home values (and rental rates, which have increased by 7.2 percent in Phoenix) has driven developers to build both single- and multi-family housing units. Although the actual numbers are still low, as discussed at the beginning of this article, single-family building permits issued increased by 12.3 percent statewide during the first 10 months of 2018 compared to the same period a year earlier, while multifamily permits grew by 5.2 percent.
THE DEVELOPMENT PICTURE
“We’re seeing activity all over the Valley,” Peru says. “What started early in the cycle as a big push for infill development has now spilled into the suburbs.” He notes that the demand for housing cannot be satisfied on infill alone because there just aren’t enough developable sites to accommodate the number of people moving and being employed here. “So, if there is a good employment story to be told nearby, the suburbs are seeing plenty of demand for housing.” Toll Brothers, for instance, has 129 homesites at The Crossings at Meridian, a new community being built in Queen Creek. The location attracted the builder’s attention because it sees Queen Creek as a vibrant growing community that offers recreation with nearby San Tan Mountains, Schnepf Farms, public as well as charter schools that are rated highly, and the convenience of shopping and dining close by. But the homebuilder known for building estate-sized homes for the high-end of the market is now targeting more of the entry-level market. Says Matthew Trinklein, sales manager at The Crossings at Meridian, “The Crossings at Meridian comes at a much lower price point with the same quality design and craftsmanship of a Toll Brothers home,” adding, “We’ve learned that there’s extraordinary demand.” In fact, Bob Flaherty, president of Toll Brothers Arizona, said it was an area Toll Brothers was missing out on, with more than half the singlefamily permits issued last year in metro Phoenix priced between $250,000