SDMHA Vacancy Report

The South Dakota Multi-Housing Association introduced the results of their 55th bi-annual Sioux Falls area vacancy survey for January.

• Vacancy rate for conventional properties increased from 6.12% to 10.14%

• 17,303 units reported

• 1,755 units vacant

• 2,236 units were excluded from the count due to lease-up (under 85% occupancy)

It is tough to pinpoint how many of those 2,236 are currently vacant since SDMHA doesn't count them until they have reached 85% occupancy (so there could be some at 10% occupancy & others at 84% occupancy). However, if we go as conservative as possible & assume that all 2,236 units are 84% leased (in other words, they are 1% away from being counted in this survey), that would mean there would be 19,539 market rate units counted in the survey overall. Still, it would also mean that an additional 358 units would be vacant bringing the total vacant up to 2,113. Under those conditions, the market rate vacancy rate is ~11%.

However, the actual vacancy rate could be quite a bit higher; it simply depends on your occupancy assumptions on the lease-up properties. Take a look at this table and see how different assumptions translate to possible vacancy rates:

ALN Apartment Data

ALN Apartment Data tracks over 12,000 management companies with over 195,000 properties across the United States. For Sioux Falls, they track ~20,000 apartment units. They just published their January 2025 report.

• 11.8% vacancy

• 20,037 units reported

• 2,364 units vacant

ALN does not indicate whether it excludes lease-up properties; however, based on the 20,037 unit count, it seems that it does include them.

Some additional information from the ALN report:

16% of units offer a concession, and the average concession package of 8.7% indicates expanding vacancy rates. Properties are pulling out all the stops to attract prospective tenants!

Costar Report

Costar is widely regarded as the most prominent apartment data collector. Our experience has been that their historical data is reasonably accurate, but their forecasting data is inconsistent and typically reverts to the mean.

• 12% vacancy

• 30,163 units counted

• 3,679 units vacant

• Stabilized vacancy rate of 7%

Have a great week!

Sincerely,

Brent Zomer

Real Property Management Express & Liberty Capital Consulting