March 6, 2014

Cover Story

CEO of the Year

Utah’s business landscape is rich with professionals who have le...Read More

Featured Articles

Did you go Skiing this winter?

Around Utah

Sections

Spotlight
Martin Plaehn

Spotlight
Karen Sendelback

Legal Briefs
Social Media and Employers: Friends or Enemies?

Money Talk
The Case for HSAs

Economic Insight
Time to Show Up

Lessons Learned
Make a Move

TechKnowledge
In the Lab

EntrepreneurEdge
Rent to Own

Business Trends
Back from the Dead

Executive Living
Artful Inspiration

Features
A Breath of Fresh Air

Features
Worst-Case Scenario

Regional Report
Northern Utah

Focus
Measure Up

Industry Outlook
Travel & Tourism

Players
Players

Article

Utah's Commercial Real Estate Industry Booming

By Rachel Madison

March 6, 2014

Utah used to be a state that large commercial real estate companies and investors would just pass over, but in recent years, Utah has truly become the place to be, according to several of the state’s commercial real estate experts. Most also agreed that 2013 showed phenomenal growth in their industry during Utah Business’ annual commercial real estate roundtable Wednesday.

“Utah used to be a flyover state,” said Gary Mangum, regional manager and principal broker at Marcus & Millichap. “None of the large institutional players were looking at placing capital here. But today they say we’ve got everything going for us. They hope other institutional players don’t catch on for a while so they can increase their portfolio holdings here.”

Mangum said this trend portends well for Utah’s economy because the state has gained a lot of recognition and credibility in the market.

“Corporations are even setting up their national headquarters here,” he said. “I think Salt Lake and Utah in particular are poised for additional growth.”

Greg Shields, president of Pentad Properties, said he continues to hear negative comments about other states when it comes to commercial real estate.

“There’s kind of a dichotomy of the states that have it going on and those that don’t,” he said. “There seems to be much more of a division now than I’ve ever seen in my career.”

In 2013, the commercial real estate market in Utah did just under $1.4 billion in investment transactions, Mangum said.

“You’ve got to go back to 2005 before we’re close to that,” he said. “We’d have been even higher than that had the inventory been available, because almost everything priced right on the market was sold. We saw record numbers on square foot prices and transaction volume, and we’re seeing the start of this year on that same pace. When deals hit the market, there are more buyers than we have deals.”

Kip Paul, executive director of investment sales at Cushman & Wakefield | Commerce, said that $1.4 billion produced the second-highest year on record. Paul said last year alone, there were 41 separate transactions of $10 million or greater. Of those transactions, two-thirds were purchased by out-of-state investment groups, and of those groups, roughly half were repeat buyers and half were new entrants into the market.

“That speaks to the point that the word has gotten out about Salt Lake City,” he said.

One area in the state that continues to have tremendous growth is downtown Salt Lake City. Scott Wilmarth, senior vice president at CBRE, said in order for downtown’s central business district to continue to do well, the city needs to capture more high-tech firms.

“We think there will be record-breaking absorption this year, and two-thirds of that is attributed to high-tech firms,” he said. “Downtown is going to have to reach out to these high-tech firms, and they can, because they’ve got the residential, transportation and ability to accommodate. It’s key to the resurgence of downtown.”

Jake Boyer, president and CEO of The Boyer Company, said there’s about a 23 percent growth in inventory in downtown Salt Lake City with current construction projects.

“What we’re feeling is that downtown is no longer just law firms and service providers,” he said. “It’s something that’s opened up to [all types of] companies. A lot [of the workforce] wants to be downtown because we have younger individuals working who want to live downtown and have the environment.”

Jeff Edwards, president and CEO of the Economic Development Corporation of Utah, said statewide, EDCUtah has 243 active projects. Edwards also said Utah is getting bigger projects than ever before—including seven recent projects with more than $1 billion of capital expenditure attached to them.

“Utah is an island of stability in a chaotic national market,” Edwards said.

The discussion was moderated by Edwards. The Commercial Real Estate roundtable will appear in the May issue of Utah Business magazine.

 

Utah Business Social
UB Events View All
Health Care HeroesUtah Business Event
Oct 21, 2014
Please join us, along with our sponsors, MountainStar Healthcare, and Roseman University in honor...
Content Marketing BootcampUtah Business Event
Oct 28, 2014
Please join Utah Business Magazine, along with our sponsor Adobe, for an in-depth, hands-on, educ...
Community Events View All
How to Do Business with Kellogg’s
Sep 22, 2014
Participants will gain an awareness of enhanced awareness on the importance of supplier diversity...
DecisionWise Engagement MAGIC Training
Sep 23, 2014
From the authors of MAGIC: Five Keys to Unlock the Power of Employee Engagement. Engagement MA...

info@utahbusiness.com  |  90 South 400 West, Ste 650 Salt Lake City, Utah 84101   |  (801) 568-0114

Advertise with Utah Business

Submit an Event

* indicates required information
* Event Name:
Price (general):
Website (if applicable):
Coordinator's Name:
Coordinator's Email:
Coordinator's Phone:
Venue Name:
Venue Address:
Venue City:
Venue Zip:
Event Capacity:
Date(s):
to
* Event Description:
  Cancel