The Salt Lake City office of CBRE commercial real estate has released its semi-annual “Greater Salt Lake Area Multifamily Market Report,” offering detailed insight into the multifamily market along the Wasatch Front.
Encompassing data from the first half of 2019, the report reflects a market that continues to experience record sales volume, with current demand meeting new supply at a healthy pace. As of midyear 2019, sales volume was just over $585 million and is on track to beat last year’s record high of $1.44 billion. Vacancy rates have also remained steady at 3.9 percent for the third straight year, signifying a balanced market with steady demand.
“Multifamily continues its commanding presence and is the preferred investment vehicle over all other asset types — both locally and nationally.” said CBRE vice president and multifamily specialist Patrick Bodnar. “This has caused cap rates to experience a downward pressure as competition to purchase assets has greatly increased from institutional investors, private equity firms and high net worth family offices.”
Eli Mills, CBRE senior vice president, added, “The Greater Salt Lake multifamily market has experienced robust mid-year rent growth of 5.1 percent year-over-year, in addition to healthy absorption numbers and consistent low vacancy.”
Highlights from the report include:
• In-migration for employment remains the top driver for multifamily demand and is contributing to low vacancy, which remains at 3.9 percent for the third straight year.
• Year-over-year rent growth is strong at 5.1 percent, with an overall average monthly rent of $1,157 across all property classes. Salt Lake County experienced the greatest rent growth, rising to an average of $1,187 through mid-year 2019.
• 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. So far in 2019, close to 3,000 units have delivered and an additional 4,764 units are expected to be completed across the four-county (Weber, Davis, Salt Lake and Utah counties) area by year-end 2019. The majority of this new development is taking place in Salt Lake County, which is expected to see a total of 5,565 new units this year.
The CBRE 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; transaction volume; and much more. The full report is available here: https://cbreemail.com/s/76b96833e875c6908dfbc5508035e96700158f5e.