Salt Lake City—The Salt Lake City office of CBRE has released its semi-annual Greater Salt Lake Area Multifamily Market Report, offering insight into the multifamily market along the Wasatch Front. This year’s document highlights a market that was extremely active and continued to garner national attention. The area achieved a record-breaking $1 billion in multifamily sales volume, illustrating the high level of interest investors have in the state.
Patrick Bodnar, multifamily specialist in the Salt Lake office said, “The high level of investor interest Utah is currently experiencing is fueled by strong economic fundamentals and better yield spreads than markets in neighboring western states. Salt Lake City was recently identified as the number two location in the nation to buy multifamily real estate. We expect to continue to see increased sales volume, stable cap rates and a record delivery of new units along the Wasatch Front in 2018.”
Job growth of 3.1 percent provided a massive net migration totaling approximately 20,000 people along the Wasatch Front that fueled the multifamily market in 2017. Overall rent growth is up year-over-year at 6.6 percent with an average montly rent of $1,059. This high demand is leading to a growing interest for high-rise residential in the area, though none has been developed yet. 5,138 units were delivered in 2017 and 11,222 units are currently under construction, all while year-end vacancy remains extremely tight at 4 percent.
The bulk of new multifamily development taking place is located in Salt Lake County, which houses a little over 53 percent of all active and planned construction. Of the total units delivered to the Wasatch Front for lease in 2017, approximately 75 percent have been leased, suggesting the overall lease-up velocity is healthy. Monthly absorption of new units was strong in 2017, ending the year at 17 units per month.
This report has been prepared with current data sourced from a survey of over 60,000 units along the Wasatch Front. The report highlights local market trends on rental, vacancy and cap rates; the status of the current construction pipeline; transaction volume; and more. Produced by multifamily investment specialists Patrick Bodnar and Eli Mills, the report contains the most current and comprehensive multifamily data available for the Wasatch Front, detailing market performance from Salt Lake, Utah, Davis and Weber Counties. Click here to download a full copy of the report.