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As U.S. Office Market Builds Confidence, Salt Lake City Blazes Through Construction Lull
In the third quarter 2013, Salt Lake City mirrors the national shift to a landlord-favorable market, driven by the booming construction industry
Salt Lake City — The third quarter 2013 marks the first time in seven years that the United States office market can look more confidently toward 2014 with leasing activity, pricing picking up at a faster pace, and more sustainable rates across the nation.
The national Third Quarter 2013 Outlook Report’s trends ring true in Salt Lake City:
National: Nationally, office rents are up, and concessions are down – even in secondary and tertiary markets – turning the office market into landlord-favorable territory
As stated above, Salt Lake City reflects a slightly different result as office rents have fallen slightly in the third quarter 2013. Despite this dissimilarity, Salt Lake City experts say the office market is shifting toward a landlord-favorable market with few concessions being offered
National: Growth of 1.4 percent was the highest quarterly jump of the recovery, annualizing at a rate of 5.6 percent
Salt Lake City rents have fallen -1.0 percent. However this decline is not expected to continue
National: The U.S. continues with the 14th consecutive quarter of occupancy growth, the last two quarters above historic norms
Salt Lake City’s third quarter 2013 absorption was positive. A total of 650,638 square feet, pushing vacancy further down and shedding a positive light on 2014
“There is resurging strength in the U.S. office market, buoyed by improving fundamentals and a pick-up in expansion activity across diversified industries and geography,” said John Sikaitis, director of office research for the Americas at Jones Lang LaSalle.
Increasing construction activity, which represents expansion, is strong in Salt Lake City where over 485,000 square feet of space are under construction, 32 percent of which are pre-leased. As a whole, the U.S. office construction pipeline is beginning to pick up, surpassing the 50-million-square-foot mark for the first time in six years.