Your instinct is pointing at something real, and it is worth naming precisely.
T-3 rent roll means the trailing three months of actual collected rents, which reflects today's leases, not what you will collect when those 2021-2022 vintage leases roll. The sponsor is using $1,680 as a stable floor and projecting $1,720 from there. The stress you are running is whether $1,680 is itself inflated by leases that were signed at peak and have not repriced yet.
Phoenix absorbed an unusually large supply wave through 2023 and 2024. The strategy guide notes vacancy in the Sun Belt peaked around 8.5 percent and is expected to decline toward 7.5 percent toward 2027, but "expected to decline" is a directional forecast, not a contract. In a market that has been oversupplied, peak-vintage leases often roll to something below their in-place rate before the market firms back up. Whether that applies to this specific submarket and unit mix is the question.
The number I would want before accepting the $1,720 reversion is the current asking rent for comparable units in the same submarket right now, not six months ago. If comparable asking rents are sitting at $1,620 to $1,640, then $1,680 as a floor is fragile and $1,720 as a reversion requires a market-recovery thesis that needs to be explicit, with a timeline.
Ask the sponsor to show you the lease expiration schedule sorted by original lease date, and then ask what rent a vacant unit in that property is leasing for today. That conversation will tell you whether this is underwriting conservatism or a hole in the model.
What submarket within Phoenix, and do you have access to current asking rents from CoStar or a competing broker?
