Salt Lake City: The Up-and-Coming Multifamily Market

February 24, 2021

Without a doubt, COVID-19 has had a rippling effect on the multifamily market—but perhaps not in the way we might have initially expected. For example, sustained in-migration throughout secondary and tertiary markets across the United States have drastically changed renter demographics in these areas. Salt Lake City (SLC) is a perfect example of this change: the local SLC area has proven to be one of the hottest markets in the country, as individuals search for an escape from the high-cost coastal market alternatives in the West.

As a result, the local area has boomed from a real estate financing perspective, and that’s why, I’m particularly thrilled to be relocating to the SLC area this year.

Moving Out West

I spent my college years in SLC but have since focused my professional career in Washington, D.C. Over the past few years, I have found myself working in the SLC market more and more. While the recreation and cultural in Salt Lake are certainly a benefit, it’s hard to ignore the opportunities for investors, especially in the multifamily space.

Specifically, for investors, the biggest opportunities in the SLC area are for those who have patient equity and can underwrite more than ten-year hold periods. With the booming lending market, large agency volume caps and historically low interest rates, Berkadia’s Market Forecast for Salt Lake City anticipates continued strength from the local commercial real estate market in 2021.

Growing Pains on the Horizon

Looking ahead, it is also important to be cautious of rising local challenges. Due to high demand from investors for Salt Lake City product, we may see a shortage of supply. As a result, the ability to act quickly to seize the best opportunities as soon as they present themselves will be key for investors this year.

Regulatory changes are also top of mind for the industry, specifically when it comes to agency privatization. We are curious to see how the capital retention rules might change for GSEs if they move towards conservatorship. But, like we continue to remind our clients, we will all just need to take each day as they come.

Adding Value to Our Clients

With these potential growing pains for this booming market on the horizon, our team at Berkadia is now uniquely positioned to bolster our existing investment sales capabilities in SLC with the complement of a dedicated mortgage banking team with deep agency experience focused on the local market. This adds immense value to our clients through a lower cost of capital and smoother debt execution. In addition to the significant market share, we also have strong relationships with the top institutional firms located in the Salt Lake City area and continue to bring similar institutional-quality debt execution to our local middle market clients.

As we see continued growth and momentum in this region, we are committed to standing by our clients and helping them navigate this great opportunity landscape. We will continue ahead in our role as advisors, helping our clients make the best decisions for their ever-changing needs. With all the growth and opportunity we are seeing, I feel confident that this year will end up being another record-breaker for the multifamily industry at large, and I’m excited for what’s to come in my new home of Salt Lake City.

-Jonathan Pratt, Managing Director

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