Rise48 Equity Update
We increased rents yet again by 3.6% in the month of May. Our average rents for May were $975 across the portfolio while NOI ticked up 2.2% over April 2021. Overall, we had a very successful month as we onboarded our newest asset, Rise Melrose (formerly known as Revival on Indian School) at the end of the month. We look forward to starting our renovation plan at the site.
We continue to push rents to above our Pro-forma levels and continue to see little to no pushback.
Deal Flow Update
We haven’t seen a slow down in the market. Overall, deals are getting harder and harder to pursue as the market continues to stay hot. We’ve been close on a couple deals but just could not get to the highest price. We’ve inched up our rent growth, other income growth, and expense growth assumptions given the recent inflation data coming out of the Bureau of Labor Statistics (BLS).
Phoenix MSA Update
Strong rent growth followed by a decrease in unemployment
To no one’s surprise, Phoenix Metro again led the nation with year-over-year rent growth of more than 9.5% as of May 2021 for the renter-by-necessity category. Month over month rents increased by approximately 0.75%. Forecasted rent growth for Phoenix climbed from 4.3% in April 2021 to 6.1% in May 2021 for the next 12 months. Meanwhile, unemployment in Phoenix recovered to just 6.0% as of April 30, 2021.
ABI recently released their Q1 update for the Phoenix market. Average price per door increased by 15.7% year over year to just under $210k per door. Average price per door for properties with over 100 units increased to just over $216k per door. On the supply side, only 2,965 units were delivered in Q1 2021. On average, about 5,680 units were delivered quarterly for the past 20 years. Compared to the increased population growth, the supply constraints will continue to accelerate in the market.