Tucson multifamily market receives more development

The Tucson multifamily market has experienced heightened development.

The situation for commercial property management companies in Tuscon may be improving, as development for new properties has spiked, according to a report from Hendricks & Partners.

Due to low home prices when compared to national figures, as well as an improving employment situation, the Tuscon multifamily market should have as many as 500 new units during this year. This would be significantly higher than the 100 new units constructed during the entirety of 2011, according to Multi-Housing News, citing the report.

Already, the city witnessed more than 80 units completed during the first quarter of the year. A level this high has not occurred during the first three months of the year since 2005. In addition, a large amount of this development is near the city's planned Modern Streetcar line, the report explained.

The line plans to help connect major parts of the city including the University of Arizona and the Congress Avenue Shopping and Entertainment District. In all, the line stretches nearly four miles, according to the report. It should create approximately 1,200 jobs and open next year, which could help boost the city's economy. There are other large complexes that will help grow employment in the area, and this could help keep development on a positive course.

Tuscon's vacancy rate has declined significantly in the past few years. The report noted that it was down to 9 percent during the first quarter, which was more than three percent down from 2009. Even with continued vacancy declines, the pricing situation has not improved significantly for property management companies, mainly due to the influx in new development to the area.

Specifically, average rent rose to $625 per month in the first quarter, which was only $4 higher than the same period in 2011, the report explained. When looking at the West Tucson sector of the market, rent was unchanged at $688 per month in the first quarter. The East Tucson sector dropped $3 to an average of $620.

The report added that East Tucson actually had a higher vacancy rate during the first quarter of this year. The figure rose to 10.4 percent in the latest findings, up from the same point in 2011, when it was 10.1 percent.

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