Phoenix, AZ
Phoenix's IL occupancy declined 780 bps from 91.5% in 3Q07 to 84.3% in 3Q10. Even though it rose by 30 bps in 4Q10, the
IL occupancy rate is still near bottom in Phoenix. Part of the challenge for IL in Phoenix is that over 1,600 units have
been added to inventory since 1Q08. 27.6% (16 of 58) of the stabilized properties in Phoenix reported occupancy at or below
80% in 4Q10.
AL occupancy in Phoenix is up 400 bps since reaching a cyclical low of 85.4% in 2Q09. At 89.4% in 4Q10, AL occupancy is
also at its highest level since 2Q07 when it was 89.6%. Phoenix's AL inventory has grown by 186 units since 1Q08 and there
are a reported 110 units under construction in two majority AL properties as of 4Q10.
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Riverside, CA
In Riverside, IL occupancy rate has declined over 1,000 bps since early 2007. At 82.6% in 4Q10, the IL occupancy rate is
down 160 bps from last quarter and 60 bps YOY. 8 out of 26 IL properties in Riverside are now reporting IL occupancy at
or below 80%. YOY rent growth is now 0.3%, which has slowed from a year ago when it was 2.1%.
AL occupancy in Riverside has risen nearly 800 bps since 1Q08. At 90.0%, AL occupancy is up 190 bps YOY and at its highest level since MAP began reporting
data (4Q05). Interestingly, YOY rent growth for AL is now -2.6% and has been negative for three consecutive quarters. There
is a possibility that the negative rent growth could be helping occupancy.
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