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According to CBRE’s First Quarter 2012 MarketView Report, major companies continue to lease more industrial space in the Salt Lake market.
Roughly 1.1 million square feet of industrial space leased in this year’s first quarter, a significant increase compared to only 329,000 square feet of leased space in the same quarter last year. This represents the largest amount of space leased during a first quarter since 2009, when 1.3 million square feet of space was leased.
“Salt Lake City is on everyone’s radar for distribution center needs as we offer a good alternative to other Western cities that may be more costly or not as well located,” said Rad Dye, senior vice president at CBRE. “Tenants are preleasing much of the new distribution space that has come on the market.”
Some of the more significant transactions included On Trac, a regional overnight package delivery service company, which leased roughly 107,000 square feet of space at the IDI 6 building, a newly constructed distribution center located at 1730 South 5400 West. OnTrac and the landlord of the IDI 6 building were represented by the CBRE team of Rad Dye, Tom Dischmann and Jeff Richards. Tai Pan Trading Co., a California-based importer of home décor products, leased 57,000 square feet of warehouse space at the HP Building at 2620 Decker Lake Boulevard. The CBRE team of Rad Dye, Tom Dischmann and Jeff Richards represented the landlord in this transaction. CBRE professionals represented three of the top five largest industrial lease transactions in Salt Lake County completed in the first quarter.
In Salt Lake County, the amount of industrial facilities under construction is at 587,000 square feet, down from 853,000 square feet in the first quarter of 2011. More than 733,000 square feet of new industrial building space was completed in the first quarter.
The availability rate (available space as a percentage of the base inventory square feet) in the first quarter increased to 9.4 percent compared to 8.6 percent in the same period in 2011. The increase in the availability rate was mostly due to construction of warehouse and distribution facilities. This speculative new construction is indicative of the level of confidence that the commercial real estate investors in Salt Lake City. According to CBRE Research, Salt Lake City remains in the top 10 U.S. markets for lowest industrial availability.