May 1, 2026

Tucson multifamily transaction counts spike to start 2026

Q1 2026

Tucson multifamily market overview

Operating conditions posted better performance during the first quarter as limited supply growth across 2025 and into 2026 helped ease upward pressure on vacancy and allowed operators to raise rents. While the vacancy rate dipped only 20 basis points, this marked the strongest quarterly improvement since 2023, bringing the current rate back in line with the first quarter of 2025. This marks the first time since 2020 that the vacancy rate has not recorded a year-over-year increase in Tucson. Rents also improved during the first quarter, although market averages still remain lower than they were one year ago. Class B properties were the best performing asset class. These middle-tier apartments recorded both quarterly and annual improvements in rents and vacancy. Class C assets also performed well in the near term, with rents increasing 2.6% in the first three months of the year while vacancy decreased by 100 basis points.

The multifamily investment market in Tucson started the year on an upswing. Activity has accelerated, with total sales during the first quarter exceeding levels recorded in the first half of each of the past three years. Pricing has also increased; the median sale price during the first quarter was $140,900 per unit, up 18% from last year. While there has not been a meaningful shift in the submarkets where sales are occurring, the individual properties that have sold to this point in 2026 have generally been better located and of a higher quality within their respective submarkets than those that sold in 2025. The majority of transactions this year have been split between the Central Tucson and East Side submarkets. In Central Tucson, the year-to-date median price is up 40% from last year, while first-quarter median pricing in the East Side submarkets exceeded 2025 levels by 55%.

Looking ahead:

The pace of multifamily deliveries is expected to surge in the coming quarters as projects that were delayed last year come online. This wave of completions will influence rent and vacancy conditions, though consistent demand in the market should keep shifts in operating conditions relatively modest. Additionally, the impact of these new units coming online will likely not be realized until the later months of 2026 and into the early months of 2027 as projects stabilize. Performance is expected to vary widely by submarket, with the rise in inventory impacting some differently than others. The greatest concentrations of new inventory will be in the Oro Valley/Catalina and South Tucson/Airport areas at opposite ends of the Tucson metro, with roughly 600 and 700 units scheduled for completion, respectively.

Sales activity in the Tucson multifamily investment market is projected to exceed the extremely light levels recorded in the previous three years, while still lagging traditional levels. Further declines in rents and rising vacancy that are forecast for the remainder of the year may make short-term holds less attractive to investors, though these conditions could create additional room for future growth. Despite deliveries being lighter in 2025, projects came online at a rapid clip in 2023 and 2024. Since the beginning of 2023, roughly 4,800 units have come online, but only 200 of these have been traded. Many of these assets that were delivered in the past three years may present investment opportunities in the near term. Additionally, the expected surge in supply growth in the coming quarters may further drive market activity, though likely not for a few years.