Salt Lake City—The Cushman & Wakefield Commerce first quarter Marketbeat report shows healthy growth in the Salt Lake Valley, setting the stage for another positive year in 2017. Even though the vacancy rate rose to 12.7 percent, net absorption was positive and trended above the 10-year average. The market also continued to experience an increase in asking rent from $22.85 per square foot full service to $23.46. Meanwhile, it is anticipated that the construction completion total will reach its highest level since 2007.
The Southeast submarket continued to see heightened development, with the completion of two Class A office properties in Sandy and Draper. Both buildings combined were approximately 83 percent pre-leased, which helped the Southeast to drive the majority of positive absorption activity this quarter. Another indication of strong Salt Lake market confidence was the repositioning of 84,000 square feet of retail space into creative office space in downtown Salt Lake’s Gateway Mall.
“The Salt Lake Market is operating in the wake of historic levels of activity in recent years. The rate of growth should still remain strong but not record-breaking,” said Trigger Reital, market leader of the Salt Lake City office of Cushman & Wakefield Commerce. “It is expected that asking rates will continue to rise at a steady but slightly slower pace, and it is expected that Q1’s positive absorption activity will continue in Q2.”
Due to the high level of construction and redevelopment activities in the Salt Lake Valley, vacancy rates will remain steady, possibly experiencing a slight increase.