Invest In Apartment Buildings In Tempe, AZ

Tempe's Renter Base: ASU, State Farm And Downtown Offices

Tempe is a renter majority city. Of its households, 57.7% rent, against 32.6% across Arizona, and the city has 45,152 renter households, up 4.1% in five years (U.S. Census ACS 2020–2024). The population barely moved, up 0.3% to 188,065, so renter households grew far faster than the population. Median gross rent in Tempe is $1,743 a month, up 49.7% from $1,164 in the 2015–2019 survey and above the Arizona median of $1,543. Median household income rose 37.4% to $79,663, and 52.7% of renters spend 30% or more of their income on housing.

Arizona State University sets the pace. About 55,000 students attended classes on the Tempe campus in 2022, and only about one in five lived in dorms, according to Phoenix New Times, which leaves tens of thousands in off-campus rentals. A major private employer is State Farm, whose regional headquarters at Marina Heights broke ground in 2013 on 20 acres of ASU-owned land beside Tempe Town Lake. A 2026 broker survey put State Farm at about 6,700 employees and Tempe's total workforce near 175,000, far more jobs than the city has households, so a large share of the workforce commutes in.

Office growth near the lake has continued. In October 2025, Kestra Holdings, whose main hub is in Austin, chose Rio 2100 in Tempe for a secondary headquarters and projected about 250 jobs over two years, starting with client service and operations teams, Area Development reported. Renter interest is rising too: RentCafe search data reported by AZ Big Media in March 2026 showed a sharp jump in renter interest in Tempe, and named Tempe and Scottsdale the Arizona cities to watch for 2026.

For apartment owners, that means two distinct tenant pools. Students lease by the bed near campus on a fall cycle. Office and tech workers rent conventional units around downtown and the lake. The Census shows employed residents up 4.5% in five years, steady but not fast.

Tempe Supply And Where Rents Are Headed

Rents in Tempe are falling as metro Phoenix works through a large construction wave. Zumper's median one-bedroom rent in Tempe was $1,350 in February 2026, down 2.2% from a year earlier, The Arizona Republic reported. Across the Valley, more than 27,000 new rentals came online in 2025, nearly 90% of them higher-end units according to Yardi Matrix, and Yardi forecast lifestyle rents to fall more than 6% in 2026. Many complexes offered one to two months free, and nearly half of Valley apartments offered some concession in 2025.

Tempe's own pipeline is concentrated near the lake and ASU. Recent completions include Mira Tempe (333 units), The Piedmont (318) and Vero (199), and projects under construction or planned include Pier 202, Shorehaven, The Watermark (360) and The Cameron (350), according to a 2026 broker brochure. ASU's Novus district alone plans about 3,650 residences.

The Census baseline matches that picture. Tempe has 36,012 homes in buildings with five or more units, 41.8% of its housing, up 6.6% in five years and faster than renter households grew. Census rental vacancy is 6.6%. That rate covers houses and condos too, so it isn't a direct read on managed apartments. The HUD fiscal 2027 two-bedroom fair market rent for the Phoenix-Mesa-Chandler metro is $1,734, about level with Tempe's $1,743 median.

For apartment syndications in Tempe, the near-term question is how long concessions last. A buyer of 1980s stock, close to the city's median build year of 1984, should underwrite against new lakefront and campus buildings that may be offering free months, and should separate student-oriented rent rolls from conventional ones.

Local rules matter for older stock as well. Each rental unit in Tempe must be registered with the Maricopa County Assessor's Office, and the city's Rental Housing Code requires a tenant-controlled cooling system that holds indoor temperatures at 82°F or lower with air conditioning, or 88°F with evaporative cooling, plus hot water of at least 110°F. Since November 2023, Tempe's Fair Housing Code has barred landlords from turning away applicants because of how they pay, including housing choice vouchers and veterans' benefits, KTAR reported after a unanimous council vote. On a 1980s property, the cooling standard is a reason to inspect HVAC closely and budget for replacements.

Tempe Neighborhoods We Watch

Most of Tempe's new apartment supply sits within a couple of miles of ASU and Tempe Town Lake.

Where Tempe Stands Among Its Peers

Out of 30 Arizona cities in our data, Tempe comes in 14th for median gross rent, 1st for renter share and 10th for five-year rent growth. Its rents fall in the middle of the pack. Put in counts rather than percentages, that is roughly 611 more residents, 1,778 more renter households and 2,230 more homes in buildings with 5 or more units than five years earlier. Growth in renter households and new apartment homes has been roughly in balance.

Tempe And Nearby Markets Side By Side

Tempe's median gross rent of $1,743 is above the Arizona median of $1,543, and its renter share is 57.7% compared with 32.6% statewide.

Tempe Rent Affordability In Dollars

At $1,743 a month, the median Tempe rent adds up to $20,916 a year, or roughly 26.3% of what the median household earns. Under the common 30% guideline, a household needs about $69,700 a year to cover that rent comfortably. That's a heavier load than the Arizona average of 23.2%. Renters usually earn less than the all-household median, so the real burden for tenants is higher than this simple ratio shows.

In dollars, Tempe rent climbed $579 a month over five years and household income climbed $21,684 a year. Rent has outpaced income, so we are careful about how much further a business plan pushes rents on renewal. HUD's FY2027 Fair Market Rent for a two-bedroom unit, $1,734, is close to the median gross rent for all unit sizes. That gap matters for buildings that accept Housing Choice Vouchers, since local housing authorities base voucher payment standards on it.

Tempe Rental Market In Numbers

If you only read one part of this page, read this list. Every figure is from the Census Bureau's ACS 5-year estimates.

• Tempe, AZ has 188,065 residents, about flat from the 2015–2019 survey (U.S. Census ACS 2020–2024).
• Median household income in Tempe, AZ is $79,663, up 37.4% over five years (U.S. Census ACS 2020–2024).
• Median gross rent in Tempe, AZ is $1,743 a month, up 49.7% over five years (U.S. Census ACS 2020–2024).
• 57.7% of households in Tempe, AZ rent, about 45,152 renter households (U.S. Census ACS 2020–2024).
• 41.8% of homes in Tempe, AZ are in buildings with 5 or more units (U.S. Census ACS 2020–2024).
• The rental vacancy rate in Tempe, AZ is 6.6%, and 52.7% of renters spend 30% or more of income on rent (U.S. Census ACS 2020–2024).
• The median home in Tempe, AZ was built in 1984 (U.S. Census ACS 2020–2024).

What We Look For In A Tempe Apartment Building

Skyline buys 5+ unit apartment buildings in Tempe that either run well today or can run better with new management or renovation. We start with rents, occupancy and the condition of the building, and we price on what the property earns now.

Property taxes are a big line item for any Arizona apartment building. We underwrite the tax bill after purchase, not the seller's current bill, since a sale often resets the assessment. Arizona has no statewide rent control law, though local rules on notices, fees and deposits still apply. Insurance quotes in Arizona reflect wildfire risk, so we get a quote before we make an offer.

After a stretch of fast rent growth, we keep rent assumptions modest and leave room for concessions if new supply opens nearby.

Due Diligence For Apartment Syndications In Tempe

Whoever the sponsor is, these are the questions we would want answered about any apartment syndication in Tempe, based on the local numbers above.

• What vacancy does the plan assume? Rental vacancy in Tempe is 6.6%. A plan that assumes much lower vacancy than the market should explain why.
• What rent growth is underwritten? Rents here rose 49.7% over five years. Ask whether the plan assumes that pace continues, and what happens to the deal if rents stay flat.
• How was the property tax bill estimated? A sale often triggers a reassessment, so the bill after purchase can be well above what the seller pays today.
• How big is the repair reserve? The median home in Tempe was built in 1984, and even newer buildings need money set aside for roofs, HVAC and appliances.
• How and when does capital come back? Ask what the plan is for a refinance or sale, and what happens if that takes longer than expected.

How Passive Investing In A Tempe Apartment Syndication Works

In an apartment syndication, Skyline acts as the general partner. We find the Tempe property, negotiate the purchase, arrange the loan and oversee management and any renovation. Limited partners put in capital and own a share of the entity that owns the building. They don't sign on the loan or deal with tenants and repairs.

Syndications are long-term and illiquid, and capital usually stays committed for several years. Results are never certain. Most offerings are limited to accredited investors, and the rules depend on whether a deal uses Rule 506(b) or Rule 506(c). See investing with Skyline Capital for how we work with limited partners.

Getting Started

The first step is the investor network. It's free, and it's how we share market notes and get to know investors. If we buy in Tempe or elsewhere and you're eligible, we'll reach out privately with the details.