By: Barbi Reuter
In a show of local market strength, Tucson’s multifamily sector reported positive growth in all key statistical categories in the third quarter of 2015. Absorption increased by 623 units during this time period as students and winter visitors returned to the region. For the trailing twelve months, Metropolitan Tucson experienced a 740-unit increase in occupancy. The net rents for the Tucson market increased $9 per unit to an average rent of $651 per unit and $0.89 per sf (without utilities) in Metropolitan Tucson. Of note, this represented the largest rental gain in a single quarter since 2006. Gross rents have increased $15 per unit (2.36%) over the last year with the largest gross rental gain occurring in the Tucson Mountain Foothills ($44 per unit). The greatest one-year decline was from the South Central Tucson market ($21 per unit). The leading indicators of absorption and net rents typically signal a strengthening market. The vacancy rate for conventionally-operated complexes improved 0.72% to an average of an 8.17% vacancy. Seasonal improvement is predicted most third quarters but the meaningful gains in each of these sectors is a true step in the right direction. The sentiment among management companies as a whole is more positive on the growth and immediate future of the multi-family market. As Tucson continues to add jobs in the marketplace, we will continue to see positive results in all the main sectors.