Is the real estate market really in the tank? Multifamily condo players in Salt Lake City don't seem to think so. In 2007, sales price increases in the 11 zip codes comprising Salt Lake City ranged from 4 percent to 103 percent, according to Sandy, Utah-based Wasatch Front Regional Multiple Listing Service. “Utah, in general, has had strong job growth and low unemployment,” says Mark Thorne, a senior vice president for Park City, Utah-based Talisker Corp., a developer of multifamily and resort properties. Thorne says Salt Lake City continues to enjoy the benefits of a buyer exodus from overpriced Western states such as California and Arizona, and also captures a sizeable “lifestyle” demographic of second-home buyers from Florida and the Northeast.
Rental fundamentals also have been robust, boosting established multifamily firms and attracting new players. In January, Philadelphia-based BPG Properties completed a $260 million privatization of Boston-based Boston Capital Real Estate Investment Trust, which includes substantial Salt Lake City assets. “It puts us in Seattle and Salt Lake, both key markets that we want to be in,” says Joe Mullen, president of BPG's multifamily operating arm, Madison Apartment Group.
Horizon Investment and Management, a fee-manager of approximately 4,000 units in the Salt Lake City metro area, pushed three “strong” rent increases in 2007 and expects more this year, says company president James Terry. He cites the uptick in two major demographics—Hispanics and baby boomers—as another market driver. “From 2006 to 2007, I would estimate that we have seen a 5 percent to 10 percent increase in baby boomers and approximately a 20 percent increase in Hispanic leasers across the [Salt Lake City] rental industry.”