Office Space

• Office vacancy rates have hit a high and should begin to see future declines.  There was a slight drop in Salt Lake County direct office vacancy rates, from 16.20 percent in 2009 to 15.9 percent in 2010.  This is a positive sign because three new buildings came online, adding 218,000 square feet to the market.  Sixty  percent of those were pre-leased.
• Salt Lake remains a tenant’s market. Landlords are still offering concessions to fill their space.  Lease rates are unchanged in the last six months.
• Large deals completed in the second quarter of 2010 include Goldman Sachs Group (222 South Main Street), Marriott Worldwide Reservations (Time Square), Dyno Nobel (Cottonwood Corporate Center 9), Tanner (Key Bank Tower), and Coldwell Banker Commercial NRT (Millrock Park South).
• 2010 is expected to remain a tenant’s market.
• Economic projections indicate that job growth will be positive in 2011. Good news for the office sector. In terms of economic conditions Salt Lake ranks in the mid-range when it comes to conditions in the rest of the 50 states.

Salt Lake County Retail

• Closures of national retailers have subsided in the Salt Lake market when compared to 2009.
• Winco and Sunflower Farmers continue to add locations along the Wasatch Front.
• Lease rates remain basically unchanged.  Landlords continue to offer rent concessions to fill space and to coax existing tenants to renew contracts.
• It is still a cautious market.  Any new retail development remains minimal.

Investments

• Investments sales declined 23 percent since 2009 and 69 percent from 2008 levels.
• While some investors are still waiting for market conditions to change,  some are starting to buy at market prices as well.
• The majority of investment interest is coming from local individuals and small partnerships.
• Large deals completed in the first quarter of 2010 include: Reckitt Benckiser (574,106 industrial square feet in Tooele),  Draper Crossing (156,545 retail square feet in Draper), Sportsman’s Warehouse (363,654 retail square feet in West Jordan) and Westlakes (358,845 industrial square feet in West Valley).

Industrial

• Industrial vacancy increased slightly to 7.59 percent over the same time last year, but this is a much healthier number when compared to most Western states.
• Lease rates are down nearly 8 percent when compared year-to-year.  Landlords are competing energetically for those who need space.
• The tight credit market has forced owners to lease their space rather than purchase it.  Lease activity is up 29 percent and sales of industrial properties is dramatically down by 84 percent compared to mid-year 2009.
• The price of industrial properties is up by 11 percent over 2009, but interest from buyers is minimal.
• Major deals in the 2nd quarter of 2010 include:  Americold (242,405 square feet in west Salt Lake City), Integracore (137,748 square feet in West Jordan), UPS (69,696 square feet in West Valley) and Metech Recycling (69,300 square feet in west Salt Lake City)