TUCSON - Cushman & Wakefield | Picor is reporting multifamily third quarter of 2014 continued to report historic progress in absorption and vacancy figures.
Tucson absorbed 618 units in the third quarter of the year. The vacancy rate dropped 0.8% to 8.2%. These two indicators continue to improve in the marketplace mainly due to the declining average rent in Tucson.
The net rents for the Tucson market dropped $3 per unit to an average rent of $636 per unit and $0.87 per square foot (without utilities) in Metropolitan Tucson. The highest average rent found in the Oro Valley/Catalina submarket at an average of $849 per unit. South Central Tucson experienced a decrease of $31 over the previous quarter.
A lack of job growth within the Tucson region has resulted in minimal rental gains over the last few years. Despite an emphasis on attracting new employers to Tucson; there has been minimal success and a slower economic recovery compared to other markets.
Improvement in the overall market slowed from previous quarters, but most of the indicators remained positive. Management companies report increases in net operating incomes (NOIs) from previous quarters but echo the inability to push rents in most submarkets.
Two significant companies, a logistics operation and a call center, have short - listed Tucson as their location of choice. These companies would bring over 1,000 new jobs to the market place. One or more of these announcements would be a welcome catalyst to help kick start the road to meaningful recovery and economic growth.
Tucson continues to be a desirable destination for many investors. The third quarter experienced an increase in out–of-state exchange buyers looking to enter the market place.
Year-to-date sales is 2,537 units with a total sales volume of $89 million with an average price per unit of $38,136 per unit and $59.85 per square foot. There continues to be a high number of local properties in need of stabilization due to the lack of rental growth and varied vacancy numbers throughout the year.
To read the full report click here: Picor Multifamily Business Report Q3 2014
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