Apartment vacancy in the Salt Lake market is at the lowest point ever reported since such records have been kept, according to research from commercial real estate firm Cushman & Wakefield Commerce. Mid-year figures show the vacancy rate at 2.6 percent.
“For the third consecutive year, the apartment communities in the Salt Lake Area are considered fully occupied,” said Kip Paul, executive director of 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 that 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-forecast economic growth, the overall market conditions should remain favorable well into mid-year 2018, the Cushman & Wakefield report said.