Salt Lake City—According to new research from Cushman & Wakefield Commerce, the apartment market in the Salt Lake City area is currently at historic levels. Mid-year figures show the vacancy rate is 2.6 percent, which is the lowest ever reported.
“For the third consecutive year, the apartment communities in the Salt Lake Area are considered fully occupied,” said Kip Paul Executive Director, Investment Sales at Cushman & Wakefield. “This low vacancy is fueling a record-breaking level of construction of new apartment buildings. This begs the question of whether the market is over-building. The data shows that even with previously unmatched levels of development, the demand is such that there is no sign of oversupply in the foreseeable future and property investment, particularly in midsize communities is particularly attractive to buyers.”
Paul said midsize apartment communities (100-250 units), for the first time in recent history, are driving the most favorable market conditions in the county. Midsize apartment communities have the highest rents on a square foot basis and the lowest vacancies with an average rate per square foot of $1.25 and a vacancy rate of 2.2 percent.
Salt Lake County has 35 apartment communities with 6,546 individual units under construction. Adding such levels of new, high-quality inventory will push vacancy rates higher, but with low vacancy rates and strong forecasted economic growth, the overall market conditions should remain favorable well into mid-year 2018.
The Cushman & Wakefield Apartment Market Report for the Greater Salt Lake Area is available here