Corporate Investors Snapped Up Metro Phoenix Apartments During Early Pandemic Years

Investors, many from out of state, spent a record amount of money to buy more than 500 Phoenix-area apartment complexes in 2021 and 2022.

That buying spree led to rent spikes and more evictions, housing advocates say.

About $27.3 billion was invested in 517 Valley apartments during the pandemic years 2021-22, according to an Arizona Republic analysis of real estate records.

The average Phoenix-area rent shot up more than 35% during those two years.

Many of the deep-pocketed buyers paying record prices want a quick return on their money, and boosting rents is how they are trying to do it, according to studies from the nonprofits Americans for Financial Reform and Local Initiatives Support Corp.

During 2021-22, new residents flocked to the Valley. But not enough new apartments were built, and metro Phoenix’s housing affordability problem became a crisis.

This year, evictions have climbed to near-record levels as more tenants can’t afford the higher rents and too many landlords still aren’t taking housing vouchers.

“These big landlords buying so many Phoenix apartments aren’t helping tenants,” said Pamela Bridge, director of litigation and advocacy at Community Legal Services. “Just look at what’s happening with evictions.“

Where investors are coming from

Investors from California spent the most on metro Phoenix apartments in 2021-22. Hedge funds and other institutional investors as well as smaller private funds paid $11.8 billion for 199 rental complexes during the two years.

Texas buyers were No. 2 for spending the most on Valley apartments: almost $2.5 billion.

Arizona LLCs spent $5.15 billion on metro Phoenix apartments during the two years tracked. But many of those groups have out-of-state addresses and aren’t local investors.

Utah investors spent more than $2 billion.