In a recent yearend report issued by Commerce CRG, Utah's commercial real estate is holding its own compared to the serious rise in office vacancies experienced nationwide.  

Jared Preusz of the Utah Business Magazine reports "In 2008, the Salt Lake County economy out-performed the national economy in almost every commercial real estate category, including office." The report finds that the reason for this out-performance is that Utah's unemployment levels are now half the national rate.

Salt Lake County may be fairing well compared to the rest of the nation, but the state is still experiencing its share of economic problems. Rich Norland, office real estate specialist for Commerce CRG, said office vacancy rates rose 2 percent last year.  "The biggest reason why the vacancy rate has gone up is because of the numbers of jobs lost in the state," Norland said.

The Commerce CRG report projects that in 2009, Utah will still outperform the rest of the nation in office real estate. More detailed facts from the report are listed below:

Salt Lake County Office Market Highlights

1. Overall Salt Lake County average "asking" lease rates rose. Due to landlord concessions, however, renters are actually paying less for space.

2. Office space absorption in Salt Lake County was positive, showing signs of continued growth, but it was significantly lower when compared to 2007.

3. A bright spot, downtown office space vacancy went down year-over-year from 11.02 to 10.30 percent.    

4. New TRAX lines, commuter rail and the legacy Highway have been a big plus, encouraging companies eBay and Oracle to make new investments totaling more than a half billion dollars in the next few years.

5. Twelve new office buildings came on the market, causing county-wide vacancy to increase by just over two percent.  Salt Lake County year-to-year comparison: 10.76 percent vacancy to 12.95 percent.  Forty-five percent of those new buildings are currently occupied with one exception-Five Gateway is at 96 percent occupancy.

6.  Corporate consolidations (example: from smaller satellite offices to one large office) created negative office space absorption in the northwest and central east segments of Salt Lake County.

7. The economic downtown has boosted the availability of county-wide sublease space by 47 percent over last year.
 
Salt Lake County 2009 Office Market Forecast

1. The Utah office market will continue to outperform the nation and remain in relatively good condition. A driving factor: Our unemployment levels are only half the national rate.

2. Expect continued interest from national companies for possible expansions in Utah.

3. The on-going City Creek project and construction at 222 South Main will pump $1.8 billion into the market for the next three years.  This will help protect the county from nationwide downward trends by providing vitality in construction jobs and services.

4. In 2009, only half-a-million square feet in new office construction will come online.  An expected decrease of any additional new office construction will keep county vacancy at a modest rate.

6. Expect very little speculative development in the near future.  Developers will need a significant amount of businesses willing to "pre-lease" prior to construction before they take any chances on new projects.

Go to the Salt Lake City Utah Real Estate Resource Center at www.BuySaltLakeHomes.com for further local market information and search real estate listings in the Greater Salt Lake City Utah area or just fill out the form below:

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