Tucson Q4 Market Report: Sales Activity Accelerates in Larger Transactions

Highlights

  • The Tucson multifamily market posted strong performance to close 2018. Rents rose during the fourth quarter, and more apartment properties sold at higher prices.
  • Vacancy inched up 10 basis points during the fourth quarter. Despite the rise in the final few months of the year, the vacancy rate ended 2018 at 6.1 percent, down 20 basis points for the full year.
  • Asking rents spiked 2.5 percent in the fourth quarter, reaching $786 per month. Rents posted an annual increase of 7.8 percent in 2018, building on a gain of 6 percent in 2017.
  • The investment market heated up as the year came to a close, with sales activity accelerating and prices pushing higher. Cap rates dipped by about 30 basis points in 2018, averaging approximately 6 percent for the year, while the median price surged to $57,500 per unit. Cap rates averaged approximately 5.5 percent during the fourth quarter.

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