Luxury apartment rentals drive rent prices higher
If you've looked for an apartment recently, you know that the cost of rent has increased significantly. In some areas, the average has jumped hundreds of dollars. The luxury market appears to be driving steep increases, so what do you get for a few thousand dollars per month?
High end finishes, amazing views, and even pools with amazing views. The valley's rental market is hot and never been more luxurious.
"It is a lifestyle," said Michael Brown.
In Scottsdale the Optima Sonoran Village with it's signature greenery trailing off the balcony sets a high-end standard for luxury. The top units have an unobstructed view of Camelback Mountain, floor to ceiling windows, high-end appliances, a wine fridge, even soft closing cabinets. You can even access a concierge service. Rents range from $1,300 to more than $5,000, and people here are renters by choice.
"I pay one check at the beginning of the month and everything else is taken care of, concierge, lights, water, filters. I don't go to home depot," said Brown.
And you don't have to go far for anything. At the resident club, access to the massive fitness center is included. It has an indoor basketball court and pool which is one of three at the 600 unit complex and don't forget about the putting green.
For renters like Nick DiFerdinando, who works within walking distance, the location cannot be beaten.
"With a place like this I get all the features I need and can still just walk for shopping, dining, and work," said Nick DiFerdinando.
The Optima is one of the largest new luxury buildings and is set to add even more units. But it isn't alone, a few blocks away the Broadstone Waterfront is filling up fast.
Two bedrooms, two baths, 1,074 square feet, the two bedrooms here range from $2,400 and up.
The builder, Alliance Residential, spared no expense. The kitchens include quartz countertops, a gas range, a wind fridge, which is a must have in luxury rentals, and front loading washer and dryers come with the unit. The pool area comes with cabanas and cable TV, a state of the art two-story fitness center, and a swanky parlor with top of the line finishes. So who is willing to shell out thousands a month to live in an apartment?
"The professional demographic that is a renter by choice, so they have most likely moved from a single home, or they are not ready to take that step to own a home, but they are looking for that finish level, and they demand this finish level," said Marissa Hubbard with Alliance Residential.
They also look for the location. Some of the highest rents in the Valley put the best nightlife and shopping right outside your door. All of the amenities and the convenience of living next to the heart of the action comes at a price, but it's one people are willing to pay. The valley's most expensive and luxurious buildings are almost all full.
"It's a hot market for apartments, and specifically for high-end apartments," said Tom Simplot.
Simplot runs the Arizona Multi-Housing Association. The group represents the owners of large apartment buildings. Many of them are charging the highest rents the valley has ever seen, but Simplot says there is still room for rents to grow.
"We are a bargain, the rental rates in metro Phoenix and Tucson, if you want to go to Tucson they are far below cities of comparable size all over the country," said Simplot.
And more high-end apartments are on the way. The association counts more than 11,500 apartments under construction or planned east of the I-17, only about 500 would be considered affordable.
"Every single new property that is being built is ramping up quickly, it's being leased out quickly, and the vacancies are turning quickly," he said.
In downtown Phoenix, the building boom is evident on nearly every corner. Large luxury buildings are popping up on long-vacant lots, and the rental prices are climbing fast. A two bedroom at the Cityscape Residences in downtown Phoenix with its picture windows and birds eye view of the city will set you back almost $2,200.
"Today's rent, a lot of them are renters by choice, they are not in a financial bind where they have to rent, they are choosing to, and want to live on top of their favorite restaurants, and have light rail everywhere they want to go," said Travis Shumake.
Cityscape occupies the top floors of the downtown Palomar Hotel. The staff will even change your light bulbs and air filters. And room service is available 24/7.
"For the price you are paying, you show up, and we do everything else for you," said Shumake.
The two-story penthouses cost about $7,000 a month and have unobstructed views of the valley. A private pool which is separate from the hotel pool has an amazing view, with the city buzzing below.
"I have got a dozen residents who don't have vehicles, and by choice, they want to use the light rail everywhere. They can afford a car, but they choose not to, because they want that urban lifestyle," he said.
Big investors hope to cash in. Downtown Phoenix will soon have hundreds more luxury apartments charging for top dollar rents. Rents that are forecasted to rise and show no sign of slowing down.