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Salt lake City – Cushman & Wakefield | Commerce released its Q1, 2014 Marketbeat Snapshot reports outlining the state of commercial real estate in Utah, including reports for the office, industrial, investment and retail markets.
“The reports show that some indicators cooled off slightly in the first quarter,” said Michael Lawson, president of Cushman & Wakefield | Commerce. “However, market fundamentals are continuing to strengthen and 2014 performance is expected to be on par with the record-breaking 2013.”
The following are report highlights from the Cushman & Wakefield | Commerce reports, which can be accessed (along with historical reports) at http://www.comre.com/research.cfm">http://www.comre.com/research.cfm.
The office market slowed slightly through the first quarter of 2014 as direct vacancy rates ticked up slightly by 0.2 percentage points from the end of 2013. Despite this slight increase, the direct vacancy rate of 12 percent was still 1.9 percentage points lower on a year-over-year basis. Lease rates were up, with a 2.3 percent increase. The outlook for the office market is bullish with about 350,000 square feet of new or renovated space coming online in Salt Lake City during the second quarter of 2014. As such, vacancy rates within the CBD are expected to tick up by around 2.0 percentage points in the next quarter.
The overall industrial vacancy rate decreased by 0.7 percentage points on a year-over-year basis to end the quarter at 7.5 percent. Despite this decrease, both leasing and sales activity were down through the first quarter; however, optimism remains fairly strong because several projects were simply pushed into the second quarter.
The investment market saw the highest price point sale in the history of the state with 222 Main, a class AA office tower. The high sales volume by number of transactions and total investment value are continuing to rise, which demonstrates an ongoing strong demand for investment product in Utah.
Vacancy rates continued to improve with a drop of 2 percentage points on a year-over-year basis to end the first quarter at 7.1 percent. New construction is expected to keep overall vacancy rates in check and expansion by existing retailers in the market, as well as new entrants, is expected to continue as Utah gains national recognition for its vibrant economy.