The Salt Lake City office of CBRE has released its semi-annual Greater Salt Lake Area Multifamily Market Report, which features detailed insight into the multifamily market along the Wasatch Front. Encompassing data through year-end 2018 and 2019 trends, the report reflects a market that is robust with record sales volume, strong year-over-year rent growth, healthy absorption and low vacancy. Multifamily investment product continues to outperform all other commercial investments in total sales volume, rent growth and new development, according to the report. The report spotlights a record-setting sales volume of $1.44 billion in the multifamily market.
“Salt Lake’s multifamily market has matured from a privately traded market to a broad-based investment source, sending a message of scalability to institutional and large private equity firms across the nation,” said CBRE multifamily specialist Patrick Bodnar.
Highlights from the report include:
• In-migration for employment remains the top driver for multifamily demand, keeping overall vacancy low at 4 percent and showing no change year-over-year. Utah’s population grew by 52,664 in 2018.
• Rent grew 5.9 percent to an overall average monthly rent of $1,122 across all property classes. The Salt Lake County suburban market experienced the greatest rent growth at 6.6 percent.
• Many out-of-state developers are looking to participate in Salt Lake as it is a high-growth, secondary market that is largely untapped by outside developers. In 2018, new unit deliveries reached 7,467 and there is a healthy projection of 6,244 unit deliveries expected in 2019. The majority of new multifamily development is taking place in Salt Lake County, which houses approximately 64 percent of all active and planned construction.
• Lease-up velocity held strong at 19 units per month at year-end, up from 17 units at the close of 2017. Of all units delivered during the previous 12 months, over 68 percent have been leased. Local demand is presently keeping up with supply.
The Greater Salt Lake Area Multifamily Market Report was prepared with current data sourced from a survey of over 60,000 units along the Wasatch Front. It highlights local market trends on rental, vacancy and cap rates, the status of the current construction pipeline and transaction volume.
