A healthy job market and a diversity of employers are two of the most important considerations when choosing a multifamily investment property. While no area is completely recession-proof, investors can mitigate their risk by choosing markets that have numerous major employers across a variety of industries. In these types of communities, even if one sector of the economy takes a hit, it only affects a percentage of the market, versus the majority.

MC Companies has acquired and developed multifamily properties in some of the most economically thriving markets in the Southwest and Sun Belt. Earlier this year, Texas and Arizona – two key areas of investment for MC Companies – turned a major corner in their post-pandemic economic recovery: both states have fully recaptured all jobs lost during the pandemic.

In Arizona, part of the return to pre-pandemic employment levels can be attributed to its influx of new residents. Between July 2020 and July 2021, Arizona ranked among the top four states in the country for population percentage increase, driven in part by work-from-home employees who have opted to work from home from Arizona. And like retail follows rooftops, businesses have followed the labor pool.

In 2021, about 270 companies were in the process of expanding their existing Phoenix operations or relocating their operations entirely to Phoenix. That includes DoorDash, Moov Technologies and Taiwanese chipmaker TSMC, the world’s largest semiconductor foundry, building a $12 billion production facility in Phoenix that’s expected to open in 2024.

In July of 2021, Texas also recorded its biggest year-over-year increase in new residents, with over 310,000 people moving to the Lone Star State during the 12-month period. Texas’s lighter Covid restrictions helped to spur this migration, as did the state’s more affordable cost of living when compared to coastal markets. Texas has also lured significant new business. Oracle Corporation, which is the third largest software company in the world, along with mega-trendy automaker Tesla, have both relocated from California to Austin. In February, Hewlett Packard also moved its headquarters from California to Houston. That so many tech companies are moving to Texas is especially noteworthy for a state whose job market has been more traditionally driven by the oil and gas industries.

When selecting assets, MC Companies heavily considers these types of employment trends. A strong job market equates to a larger population of well-employed, financially stable renters. While we couldn’t have predicted the degree to which Arizona and Texas have grown – both in in jobs and employers – we have positioned ourselves in these markets by paying close attention to their key performance fundamentals over time, recognizing that this is always one of the best ways to determine where to successfully invest.