Sonoran Row Tenant Quality And Rent Analysis

Analyze the tenant quality and rent potential at Sonoran Row Townhomes, comparing my current tenant base against the broader available tenant pool in the submarket to determine whether there's room to push rents. I want to understand what operational changes (screening, renewal strategy, rent strategy) or physical changes would be needed to support a rent increase.

Sep 11

PropertyConfirm Sonoran Row Townhomes

Sonoran Row Townhomes

Command

108 lines

mkdir -p /vercel/sandbox/analysis && cat > /vercel/sandbox/analysis/sonoran_row_calcs.py << 'EOF'
import json

# ---- Inputs (from RealAI datamart query_data calls) ----
subject = {
    "unit_count": 259,
    "unleased_units": 34,
    "occupancy_latest": 0.8996,
    "occupancy_12mo_ago": 1.0000,
    "asking_rent_avg": 2341.50,
    "asking_rent_psf": 1.46,
    "asking_rent_2bed": 2214.17,
    "asking_rent_3bed": 2607.73,
    "in_place_rent_avg": 2295.84,
    "in_place_rent_psf": 1.62,
    "asking_rent_12mo_chg": -0.0879,
    "asking_rent_3mo_chg": 0.1283,
    "in_place_rent_12mo_chg": -0.0063,
    "retention_rate": 0.2625,
    "tradeout_pct": 0.0216,
    "tradeout_pct_t3_chg": 0.1471,   # 3mo % change IN the tradeout pct metric (relative)
    "tradeout_pct_t6_chg": 0.1227,
    "days_on_market_signed_30d": 22,
    "gpr": 7141501.95,
    "vacancy_loss": 309288.73,
    "unit_size_sqft": 1461,
    "year_built": 2025,
}

submarket = {
    "name": "Phoenix - Happy Valley",
    "asking_rent_avg": 1857.05,
    "asking_rent_psf": 1.87,
    "asking_rent_2bed": 1945.19,
    "asking_rent_3bed": 2399.64,
    "in_place_rent_avg": 1759.04,
    "asking_rent_12mo_chg": 0.0220,
    "asking_rent_3mo_chg": -0.0270,
    "in_place_rent_12mo_chg": -0.0013,
    "occupancy_latest": 0.9124,
    "retention_rate": 0.630,
    "tradeout_pct_avg": -0.0083,
    "days_on_market_signed_30d": 60,
    "hhi_median": 169006,
    "fico_avg": 759.57,
    "fico_800plus_pct": 0.1799,
    "fico_sub_670_pct": 0.0032 + 0.0508,
    "net_worth_tier_avg": 8.12,
}

zip85085 = {
    "hhi_median": 137954,
    "hhi_avg": 218864,
    "hhi_owner_median": 169771,
    "hhi_renter_median": 97846,
    "fico_avg": 743.20,
    "fico_800plus_pct": 0.1292,
    "fico_sub_670_pct": 0.0090 + 0.1115,
    "net_worth_tier_avg": 6.89,
    "wealth_resources_tier_avg": 6.22,
    "liquid_resources_tier_avg": 9.81,
    "past_due_rate": 0.0407,
}

out = {}

# --- Rent premium: subject vs submarket ---
out["asking_rent_premium_avg_pct"] = subject["asking_rent_avg"]/submarket["asking_rent_avg"] - 1
out["asking_rent_premium_2bed_pct"] = subject["asking_rent_2bed"]/submarket["asking_rent_2bed"] - 1
out["asking_rent_premium_3bed_pct"] = subject["asking_rent_3bed"]/submarket["asking_rent_3bed"] - 1
out["asking_rent_psf_discount_pct"] = subject["asking_rent_psf"]/submarket["asking_rent_psf"] - 1  # negative = subject cheaper per sqft

# --- Loss to lease (asking vs in-place) ---
out["loss_to_lease_pct"] = (subject["asking_rent_avg"] - subject["in_place_rent_avg"]) / subject["asking_rent_avg"]
out["loss_to_lease_annualized"] = (subject["asking_rent_avg"] - subject["in_place_rent_avg"]) * 12 * (subject["unit_count"] - subject["unleased_units"])

# --- Rent-to-income using zip renter median income as best-available tenant income proxy ---
out["rent_to_income_inplace_zip_renter"] = (subject["in_place_rent_avg"]*12) / zip85085["hhi_renter_median"]
out["rent_to_income_asking_zip_renter"] = (subject["asking_rent_avg"]*12) / zip85085["hhi_renter_median"]
out["rent_to_income_inplace_zip_median"] = (subject["in_place_rent_avg"]*12) / zip85085["hhi_median"]

# --- Occupancy / leasing velocity gap vs submarket ---
out["occupancy_gap_vs_submarket_pp"] = (subject["occupancy_latest"] - submarket["occupancy_latest"]) * 100
out["dom_advantage_pct"] = 1 - subject["days_on_market_signed_30d"]/submarket["days_on_market_signed_30d"]

# --- Tradeout comparison ---
out["tradeout_gap_vs_submarket_pp"] = (subject["tradeout_pct"] - submarket["tradeout_pct_avg"]) * 100

# --- Retention context (flag: lease-up property, not mature) ---
out["retention_gap_vs_submarket_pp"] = (subject["retention_rate"] - submarket["retention_rate"]) * 100

# --- Credit / income gap: zip vs submarket (subject's local renter pool vs the wider available pool) ---
out["fico_gap_zip_vs_submarket"] = zip85085["fico_avg"] - submarket["fico_avg"]
out["hhi_median_gap_zip_vs_submarket_pct"] = zip85085["hhi_median"]/submarket["hhi_median"] - 1
out["networth_tier_gap_zip_vs_submarket"] = zip85085["net_worth_tier_avg"] - submarket["net_worth_tier_avg"]
out["subprime_share_gap_zip_vs_submarket_pp"] = (zip85085["fico_sub_670_pct"] - submarket["fico_sub_670_pct"]) * 100
out["primeplus_share_gap_zip_vs_submarket_pp"] = (zip85085["fico_800plus_pct"] - submarket["fico_800plus_pct"]) * 100

# --- Vacancy loss as % of GPR ---
out["vacancy_loss_pct_of_gpr"] = subject["vacancy_loss"] / subject["gpr"]

for k,v in out.items():
    print(f"{k}: {round(v,4)}")

with open("/vercel/sandbox/analysis/results.json","w") as f:
    json.dump(out, f, indent=2)
EOF
python3 /vercel/sandbox/analysis/sonoran_row_calcs.py

Sonoran Row is priced right where the data says it should be — the room to push isn't in loss-to-lease, it's in tightening who gets in the door as the first renewal wave hits.

Property-level tenant data (income, credit, wealth) isn't yet populated for Sonoran Row — it's a 2025 delivery, and SuperCensus household data needs a maturing occupied base to sample from. I've substituted the ZIP 85085 household profile as the best available proxy for who's actually renting here, benchmarked against the wider "Phoenix – Happy Valley" submarket as the broader available pool. That substitution turns out to be the headline finding, not just a workaround.

The tenant pool comparison

Sonoran Row Tenant Draw: ZIP 85085 vs. Phoenix - Happy Valley Submarket

Metric			Read (direction/gap)
Median household income	$137,954	$169,006	-18% vs. submarket
Renter-only median household income	$97,846	N/A1	Not comparable — no submarket figure
Average FICO score	743	760	-16 pts vs. submarket
Share of households FICO 800+	12.9%	18.0%	-5.1 pts vs. submarket
Share of households FICO under 670	12.0%	5.4%	+6.7 pts (weaker) vs. submarket
Average net worth tier	6.9	8.1	-1.2 tiers vs. submarket
Average liquid resources tier	9.8	11.0	-1.2 tiers vs. submarket

The wider submarket is meaningfully stronger than Sonoran Row's immediate zip: $169K median household income vs. $138K (-18.4%), FICO 760 vs. 743, and a subprime share nearly 7 points higher locally. That's the opposite of what you'd want if the thesis were "our tenants are already elite, we're leaving money on the table." Instead it says the elite tenants this asset could be drawing are still out in the broader submarket — Sonoran Row is currently pulling from a good-but-not-best slice of its trade area.

Locally, though, the renter cohort itself looks financially sound: renter median income of $97,846 against Sonoran Row's average in-place rent puts rent-to-income at 28.2%, and 28.7% even at asking — comfortably under the 30% affordability line. There's headroom before a rent increase becomes a burden.

Lifestyle signal

Zip 85085 residents over-index nationally on pool ownership (+45 pts), luxury vehicle purchases (+32), hybrid work-seeking (+33), and conservative investing — a homeowner-adjacent, family-stable profile in a submarket that's 57% owner-occupied. That's exactly who a build-for-rent townhome product (1,461 sq ft average, 2-3BR only) is built to convert: people who want a house but aren't buying yet. It confirms the physical product is aimed correctly; the question is whether leasing is reaching enough of that cohort versus just filling units fast during lease-up.

How the property is performing

Sonoran Row Asking Rent Trajectory (Lease-Up Correction Then Recovery)

Rents dipped through lease-up, now recovering hard. Asking rent fell 8.8% over the trailing year as the initial pro forma pricing got corrected down to fill units, but it's up 12.8% in just the last 3 months — against a submarket where asking rents are down 2.7% over the same 3 months. Management is pushing price into a softening market and it's holding.
Absorption is the tell. Units signing leases in the past 30 days spent a median of 22 days on market, versus 60 for the submarket — nearly three times faster. That's not the profile of a property that's out over its skis on price.
Tradeouts confirm it. New leases are signing 2.2% above the prior tenant's rent at Sonoran Row, and that spread has been widening each of the last two quarters, while the submarket average tradeout is actually negative (-0.8%) — new leases there are signing below what the outgoing tenant paid. Sonoran Row is bucking a softening submarket.
Loss-to-lease is thin (2.0%, ~$123K annualized) — this isn't a rent-roll catch-up story. The real premium is already baked into asking rents: Sonoran Row commands a 26% premium over submarket average rent per unit, even while renting for 22% less per square foot ($1.46 vs. $1.87). That gap is the actual opportunity — pricing power exists to close some of that per-square-foot discount without the nominal monthly number looking out of line to a prospect.
Retention (26%) is not a red flag — it's an artifact of newness. This is a first-year lease-up; almost no units have reached a renewal decision yet. The real retention test comes in the next 2-4 quarters as the initial cohort rolls, and current data can't yet tell you how it'll go.

What the picture says together

The demographic read, the leasing velocity, and the tradeout trend all point the same direction: current pricing is under, not over, what the local market will bear, and the untapped upside is reaching further into a submarket pool that's richer than the property's immediate draw. The one open question the data can't answer yet is retention economics once rents get pushed further — that's a 2-3 quarter forward risk, not a today problem.

Levers to support a further push

Screening — tighten toward the submarket, not the zip. With rent-to-income still at 28%, there's room to raise minimum qualifying income (e.g., toward 3.0-3.2x monthly rent) without pricing out a meaningfully sized pool, and to weight leasing marketing toward the wider Happy Valley submarket where FICO and income run stronger than the immediate zip draw. Trade-off: tighter screening slows absorption at a moment when the property still has 34 units to fill.
Renewal strategy — get ahead of the first renewal wave. Because trailing retention is a lease-up artifact, build a renewal program now (staggered 60-90 day offers, capped first-renewal increases) rather than applying the same aggressive push used on new leases; the risk of testing pricing power for the first time on renewals is a spike in turnover right as the roll matures.
Rent strategy — segment by unit type. The 2BR premium over submarket (13.8%) is already wider than the 3BR premium (8.7%), suggesting more room to push 3BRs before hitting resistance.
Physical — narrow the per-square-foot gap. Sonoran Row still rents at a 22% discount per square foot to the submarket despite a 26% premium per unit. Modest differentiators (upgraded appliance/smart-home packages, finished garage storage) let the per-square-foot rate close that gap without an outsized jump in the advertised monthly number.

Bottom line

There's real room to push rents — the market is validating it in real time through 22-day absorption and widening tradeouts against a submarket that's actually softening. But the asset hasn't been tested on retention yet, and the stronger tenant pool it should be chasing sits in the broader submarket, not its immediate zip. Tighten screening toward that pool now, build the renewal program before the first cohort rolls, and re-run this once six months of post-lease-up rent roll data is in the property-level tenant profile — that will tell you whether the pricing power is holding onto the tenants it's attracting.

This is a read-only snapshot of a RealAI analysis.