Trendsetters

TRENDSETTERS THE WRITE STUFF

Here are the books that have inspired and entertained Arizona’s commercial real estate leaders

ANDREW GEIER, executive vice president of Layton Construction, is typical of what many might think is the relationship between people who work in construction and reading.

“I’m not a big book reader,” Geier admits.

But even Geier admits that the written word has influenced his career.

“My business partner made me read ‘Good to Great,’” Geier says. “We’ve utilized several of the concepts in the book, adapted for our business, and have experienced tremendous success. Now that we have our flywheel moving, it’s exciting to see the momentum we’ve created.”

Geier isn’t the only Arizona business leader who has been inspired by books. Here is what fills the bookshelves of Arizona’s most brilliant commercial real estate minds.

BYRON R. CARNEY, managing principal, Cushman & Wakefield: “The best business book that I have read is ‘Outliers,’ by Malcolm Gladwell. The most interesting concept for me was the 10,000-Hour Rule. The theory of this rule is that it takes a person 10,000 hours of dedication to become an exceptional performer in their field. The most important aspect of becoming successful is hard work.”

SHARON HARPER, chairman, president and CEO, Plaza Companies: “‘Character is Destiny,’ by John McCain. It is truly character that defines everything about a person. This is a book of heroism and is about leaders who believed their values were the power that directed their lives. These stories are a constant inspiration for me.

Byron R. Carney Molly Ryan Carson Andrew Geier

BOB MULHERN, senior managing director, Colliers International: “I read the Bible daily. I find every page is filled with inspiring truth and wisdom.”

MOLLY RYAN CARSON, senior vice president, market leader Southwest; Ryan Companies US, Inc.: “This is tough as there are so many good books! ‘The Power of One,’ by Bryce Courtney, is certainly up there. It’s a story of perseverance and is beautifully written. And I unapologetically love all of Vince Flynn’s books.”

GREG VOGEL, CEO, Land Advisors Organization: “‘Think and Grow Rich,’ by Napoleon Hill. I read this when I was 19 and it changed the trajectory of my life. I have read it 15 times and there could not be a better book for these current times. I have given away over 100 to young people and recommend it to all seeking advice from me.”

10 cheapest places to live in Arizona

From the upscale city of Scottsdale to the college town of Tempe, rents throughout the state sit on the more affordable side. But if you’re looking for the cheapest places to rent in Arizona, here are the Top 10.

Phoenix will be America’s second-hottest housing market in 2021, topping a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow survey of experts. Coming in at No. 1 on the list of America’s hottest housing markets in 2021: Austin, Texas. The latest CommercialSearch study shows that Phoenix is the sixth hottest U.S. market for multifamily sales over the past decade.

In the last 10 years, the price-per-unit (PPU) for multifamily properties surged 156 percent, reaching nearly $160,000. This increase surpassed both median home sale prices and rental rates. The study compared and ranked the most active U.S. metros in terms of multifamily sales since 2009 Here are some highlights: ■ Phoenix is the sixth hottest U.S. market for multifamily sales over the last decade. Since 2009, Phoenix registered more than $42 billion in multifamily sales. ■ In terms of transactions, 1,711 deals were completed across the metro since 2009, totaling 385,717 units. ■ In 2020 alone, Phoenix closed 125 deals, claiming the third spot. The market had only 21 fewer deals than Dallas-Fort Worth, which took No. 1. ■ For comparison, nationally, the average rent saw a 37 percent increase to $1,462, and the median home sale price was up roughly 58 percent since 2009 to $313,200.

LOCATION ONE-BEDROOM AVERAGE RENT PRICE AVERAGE RENT PRICE CHANGE

1. Sierra Vista $663 +17.87%

2. Yuma

$759 -4.18% 3. Tucson $835 +5.50% 4. Casa Grande $914 -6.17% 5. Mesa $1,052 +0.29% 6. Goodyear $1,078 +45.33% 7. Glendale $1,097 +0.98% 8. Avondale $1,118 +7.22% 9. Litchfield Park $1,152 -13% 10. Queen Creek $1,189 -8.18%

MOST AFFORDABLE: Living in Sierra Vista gives you a perfect balance between an active, engaged lifestyle and affordability, and that’s why it’s No. 1 among the cheapest places to live in Arizona.

BIG DEAL: Maxwell on 66th sold for $122.5 million in biggest multifamily deal of 2020.

Phoenix No.2

among hottest housing markets of 2021 Phoenix ranks No. 6

among hottest multifamily markets

Office market suffers ill effects of pandemic

Reduced economic activity from the pandemic greatly impacted supply and demand patterns throughout 2020 and is likely to continue into 2021. As a result, the Phoenix market continues to witness smaller office leasing volume with less than 1 million square feet of office space leased for the third straight quarter, according to the Savills Research fourthquarter report.

Phoenix has seen steadily increasing availability since the start of the pandemic. Market-wide availability closed the year at 22.3 percent, up 110 basis points (BPS) quarter over quarter and jumped 350 BPS year over year. Class A availability stood at 22.9 percent, increasing by 30 BPS over the previous quarter and climbing 450 BPS year over year.

According to the Savills report, the outlook for the Phoenix market is that if the vaccination rollout is successful, the market should see demand return in the second half of 2021, but market fundamentals are likely to remain soft in the interim. The good news, according to the report, is that Phoenix’s relative affordability will continue to attract tenants looking to relocate or expand operations in the western part of the United States without paying the sky-high rents of coastal markets.

Did Phoenix selfstorage market emerge unscathed from COVID-19?

The Phoenix self-storage market experienced a slowdown in construction in 2020, which was in line with the national trend. However, by the end of the year, street rates experienced a 2.2 percent rise compared with the previous three years when they mostly flatlined, according to a STORAGECafé industry report.  The Phoenix-Mesa-Chandler metro is the nation’s second-most active self storage market. New developments amounted to 1.8 million square feet in 2020. However, this was a marked decline from the 2.3 million square feet of storage space delivered in 2019.  Street prices in Phoenix experienced a 2.2 percent year-over-year increase — a big change after 3 years of stagnation — and were hovering around $105 per month at the end of 2020.

Industrial market makes history

The Greater Phoenix industrial market posted its largest amount of net absorption in history during 2020, according to the Colliers International Q4 2020 Arizona Industrial Research & Forecast Report. The city posted 13.9 million square feet of net absorption during 2020, 7 million of which were absorbed in the fourth quarter. The surge in demand was created by out-of-state companies entering the Arizona market, as well as increased need for industrial space due to a shift to online purchasing during the pandemic.

In addition, Greater Phoenix posted its largest delivery of new product in a single quarter during fourth quarter 2020: A remarkable 6.5 million square feet of new industrial space came online. This included the Valley’s first speculative project larger than 1 million square feet, which was developed by Tratt Properties in the West Valley. The final three months of 2020 was a record-breaking quarter with 7 million square feet absorbed.

THE BEST OF THE BEST

CONGRATULATIONS TO OUR TOP ARIZONA INVESTMENT PROFESSIONALS OF 2020

Marcus & Millichap’s Best of the Best represents the highest level of investment professionals in the industry. To be in this elite group of professionals means that these individuals truly epitomize the firm’s 50-year commitment to unparalleled expertise gained though investment specialization, a culture of information-sharing and innovations in technology, research, and most importantly, client services. The success of our clients is celebrated by honoring our best of 2020.

MARK RUBLE Executive Managing Director STEVE GEBING Executive Managing Director

CLIFF DAVID Executive Managing Director PAUL BAY Vice President

PETER KATZ Executive Managing Director

CHRIS LIND Senior Vice President JAMIE MEDRESS Executive Managing Director HAMID PANAHI First Vice President RICH BUTLER Senior Vice President DARRELL MOFFITT Senior Vice President

TO ACCESS THE REAL ESTATE INVESTMENT MARKET, CONTACT THE MARKET LEADER.

RYAN SARBINOFF Vice President/Regional Manager, Arizona 602.687.6700 Ryan.Sarbinoff@marcusmillichap.com