Tucson Multifamily Market Report
2024 Investment Forecast
Cost-of-Living Advantages Drive Renter Demand and Tighten Vacancy
Three-year migration surge revitalizes rental landscape. Tucson is projected to be one of just eight major U.S. markets to record declining vacancy this year. While completions are slated to rise to a two-decade high, renter demand is being bolstered by historic migration. By the end of 2024, over 34,000 transplants will have entered the populace through the last three years, marking the highest 36-month gain since before 2000. A comparably lower cost-of-living is facilitating this migration from nearby markets, as well as household formation among current residents. From 2019 to 2024, wage growth in Tucson far outpaced the U.S. mean, while the average effective rent has advanced slower than the national pace. This trend is especially supporting demand within the Class A segment, where the mean rent is among the lowest of any major U.S. market. Class A vacancy fell nearly 100 basis points below the mid- and lower-tier rates through most of 2023, after having the highest average over the previous half-decade. Nevertheless, Tucson’s growing manufacturing sector should greatly boost demand for Class B and C rentals in the medium-term. American Battery Factory, for example, plans to hire 1,000 roles for its facility slated to deliver in 2025 at Pima County’s Aerospace Research Campus.