TUCSON, Ariz., Feb. 6,, 2006 - Real Estate Investment Brokerage Company, the nation's largest real estate investment brokerage firm, recently released its National Apartment Research Report for 2006, which indicates the Tucson apartment market will benefit from stronger occupancy, and owners are expected to nearly eliminate concessions this year.

Also included in the report is the firm's annual National Apartment Index (NAI), a snapshot analysis that ranks 42 apartment markets based on a series of 12-month forward-looking supply and demand indicators. Tucson improves three places this year to No. 13.

"Investment activity in Tucson remains strong, and the market is being mostly fueled by out-of-state capital from higher-priced areas such as Southern California," comments David A. Wetta, managing director of and regional manager of the Tucson office. "Last year, condo converters purchased more than 3,000 units with the majority located in the East Tucson and Catalina submarkets. Conversion-oriented buying could pick up momentum this year as investors seek to capture housing demand from the high-income segment of the population."

Following are some of the most significant aspects of the Tucson Apartment Research Report:

• Asking rents are forecast to rise 3 percent to $612 per month this year.
  
  Effective rents are expected to add 6.5 percent to $593 per month by year end.
  

• Vacancy is forecast to decrease 120 basis points to 5.9 percent in 2006.
  
  The large drop will be the result of growing condo conversion activity coupled with increasing tenant demand.
  

• Tucson employers will add more than 8,800 jobs in 2006, an increase of 2.4 percent.
  
  Sectors expanding this year, including leisure and hospitality, and professional and business services, are those that typically add renters to a market.
  

• Apartment completions in 2006 are on track to total 550 units, a decrease from 575 units last year.
  
  Approximately 200 units are expected to be added to the Central/University submarket
  

• Sales prices will continue rising in the Tucson area. 
  
  More than 50 percent of Tucson buyers are coming from high-priced California markets, and they are willing to pay a premium. The Central/University submarket will remain a highly-sought after location since vacancy is declining and revenue growth is expected to exceed 5 percent this year.
  
  Orange County (Calif.) claimed the top spot in the 2006 NAI, surpassing last year's leader, Riverside-San Bernardino (California's Inland Empire). The region's median home price of more than $700,000 makes Orange County one of the least affordable housing markets in the country, which will keep renter demand at high levels. Fort Lauderdale occupies the No. 2 position due to robust job growth and low vacancy. Las Vegas moved up one spot to No. 3, supported by strong condo conversion activity and declining vacancy. San Diego fell two places to No. 4, and New York City-Manhattan climbed four positions to complete the top five. Typically the bottom MSAs in the NAI are markets with above-average vacancy or weak labor markets.