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Porter Kyle partner Taylor Shultz is preparing to join the panel “What Still Pencils: Owning, Developing & Repositioning Assets in Greater Phoenix” at Connect Phoenix Multifamily, SFR & BTR on April 8, bringing more than two decades of ground-up multifamily experience to the conversation. Drawing on his work from site selection through capital strategy and lease-up, he offered a preview of how he sees the Phoenix multifamily landscape evolving ahead of the event at The Westin Kierland Resort & Spa in Scottsdale.
Shultz notes that the Phoenix market is increasingly behaving as a collection of distinct submarkets rather than a single unified market. He points to the East Valley and Southeast Valley, including Scottsdale, as areas that continue to support new multifamily development due to comparatively lower levels of recent supply and stronger rent performance. In these submarkets, he observes improving absorption, concessions beginning to roll off, and some stabilized communities achieving modest rent growth.
On the cost side, Shultz reports that construction expenses have generally stabilized, with some trades even seeing modest reductions that help well-located projects start to pencil again. However, he emphasizes that extended entitlement timelines remain a major constraint, raising total project costs and naturally slowing new starts even where fundamentals are favorable. In contrast, parts of Phoenix that have absorbed heavier new supply are facing more pressure on rents and concessions, making new development harder to justify in the near term.
When evaluating what actually pencils today, Shultz says construction cost relief is creating opportunities, but underscores that efficient design and a solid sub-base are critical to feasibility. He stresses the importance of discipline on land basis, alongside achievable rents and construction costs, in determining whether a deal is viable. Strategically, Porter Kyle continues to favor ground-up development as its core value-creation avenue, while also recognizing that repositioning existing assets can be compelling when the acquisition basis and submarket strength line up.
Shultz explains that underwriting has shifted over the past 18–24 months to reflect both near-term supply pressures and a more constructive medium-term outlook in targeted submarkets. He now underwrites modest rent growth supported by declining new starts and observed absorption, while maintaining conservative lease-up timelines with the aim of outperforming. He also highlights that the firm’s townhome-style build-to-rent product faces limited like-kind competition in the Phoenix MSA, which has supported stabilization. Despite volatility in the debt markets, he points to ongoing Class A trades at or below a 5% cap rate as evidence of liquidity that informs exit cap assumptions.
On amenities, Shultz reiterates Porter Kyle’s focus on the livability and design of the homes themselves, prioritizing functional layouts, larger floorplans and quality finishes over capital-intensive specialty features. For communities of roughly 100–150 units, he says indoor courts, arcade rooms and similar amenities are difficult to justify from an ROI perspective. Instead, the firm concentrates on highly used, cost-effective offerings such as fitness centers, pools and outdoor spaces like dog parks and children’s play areas, which align with the family- and pet-oriented resident profile attracted by larger floorplans.
Shultz adds that Phoenix has become a major market for build-to-rent communities, creating a scalable alternative to scattered-site single-family rentals for institutional investors. He observes that some owners now focus exclusively on BTR, others remain committed to traditional multifamily formats, and a growing cohort allocates capital to both. As policy and financing debates continue, he frames the choice between BTR and conventional multifamily as a matter of matching product type with operational expertise, capital structure and target renter demographics. Connect Phoenix Multifamily, SFR & BTR on April 8 will bring together Porter Kyle and other regional stakeholders for a focused discussion on where these segments are headed in Greater Phoenix.
The post Porter Kyle Partner Taylor Shultz Previews Phoenix Multifamily, SFR and BTR Market Trends appeared first on CRE Market Beat.
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