While Phoenix has historically been a boom/bust market, all eyes are now on Scottsdale as multifamily developers hope to snag coveted Millennial renters. (The retiree community won't know what hit 'em.)

Wood Partners will break ground next month on $38M Alta Scottsdale, a 218-unit luxury complex located one mile from downtown. The South Scottsdale/Old Town market is noteworthy for a dearth of apartment production over the last 12 years, associate director Todd Taylor tells us, and demand is up meaningfully thanks to the area's booming shopping, dining, and nightlife. How do you attract a generation saddled with debt in a challenging labor market? A good discount. (A never-ending supply of artisan coffee doesn't hurt either.) Foregoing structured parking will keep their basis down significantly, Todd says, allowing Wood to offer rental rates expected to be roughly 30% lower than other core properties in the submarket.

A lot of investors took a beating during the downturn and remain skeptical about Phoenix, but a number of institutional capital groups have gotten comfortable with the market and have a project or two in the works (primarily in favored areas like Scottsdale, Tempe, and other infill locations). Todd believes Phoenix multifamily is in its third or fourth inning, and continued job creation and growth is a larger concern than overbuilding. That a full-fledged recovery hasn't materialized yet bodes well for multifamily, he says, adding potential for continued upside as jobs increase along with household formation (translation, leaving Mom and Dad's basement for a rental unit). A former left-handed pitcher with the Minnesota Twins organization, Todd enjoys playing chess in his spare time.