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Utah Business

Utah is experiencing a building boom and opportunities for commerce are expanding.

Building Boom

Take a drive down I-15 between Salt Lake City and Provo, and you’ll see steelwork, cranes, and workers installing marble and glass. There’s a commercial building boom reverberating throughout the Wasatch Front. From office space to manufacturing and retail, the skyline is changing—which bodes well for the strength of the state’s economy.  

Growing Up

The Wall Street Journal noted earlier this year, “Utah’s Economy is Booming,” and one of the signs of that growth, according to Lora Munson, the executive vice president at Colliers International, is the office space growing to meet the demand. “The biggest thing we’re seeing is the sheer amount of office space that has been constructed within the last 18 months,” says Ms. Munson.

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Recently completed construction projects include the Mountain America Credit Union tower in Sandy which relocated from West Jordan to its new digs along I-15, expanding its footprint with 327,000 square feet of office space.

Just around the Point of the Mountain, Podium opened its 125,000 square-foot building in Lehi, and not far from that, Innovation Pointe is well underway. The sprawling Lehi office park will ultimately include four buildings on 40 acres. It’s first building, Innovation Pointe One, is complete and Innovation Pointe Two has already begun pre-leasing.

One of the new Innovation Pointe tenants is WeWork. “WeWork is a collaborative office space concept,” says Bryan Welch, the head of communications and PR at Colliers International. “They’ve really come into the market with a splash. They’re the global leader of shared space development and have become an icon for incubator space throughout the world. So tech companies, startups that are looking to develop concepts, share ideas—they’re a perfect match for those type of environments where you have a great deal of synergy and innovation. Looking ahead, when incubator space is accessible within the market, more commercial construction will need to take place as hyper-growth companies expand to corporate headquarters and further grow.”

Mr. Welch explained, “WeWork typically looks at highly urbanized downtown environments, but they saw an opportunity in Lehi, which is a testament to the growth of the market. You’re seeing leading companies take note from an international level of what Utah has to offer.”

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Innovation Pointe is a prime example of other trends in Utah’s office space. “Utah currently has almost 1.2 million square feet of office space under construction in Salt Lake and Utah Counties—almost half of that space is already pre-leased,” said Ms. Munson. “It’s unique to have that amount of space and that amount of pre-leasing as well.”

Ms. Munson, who specializes in tenant representation, notes that a majority of new construction is occurring in the suburbs. She explains that the primary reason for that construction is all of the land. “The suburbs have available land to build on and can offer amenities, like increased parking, that downtown cannot,” says Ms. Munson. “The trend for companies has been to get more bodies in the same amount of space than they used to, which creates a higher parking demand.”

While the suburbs have land available for the desired parking, more companies are looking for alternatives to massive parking construction. MACU, for example, worked with developer, Gardner Company and co-tenant, Hale Centre Theatre to build a shared parking structure. This collaborative concept made sense both for land-use and tenant-use efficiency, with many of the credit union staff departing before evening theatre-goers arrive.

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Other companies along the tech corridor are looking to offer public transportation amenities to offset the need for increased parking—and to mitigate the impact on traffic congestion and air pollution. Traverse Ridge III, for example, is a 220,000 square-foot office building that has just broken ground in Lehi. It is already touting a dedicated shuttle service to and from the nearby FrontRunner station.

Along with new construction, redevelopment is helping to meet the demand, particularly in areas like downtown Salt Lake. City Creek Reserve has confirmed it will be building a Class A office tower on the corner of 100 South and State Street. Early plans indicate that it may top out at 395 feet, which would make it the city’s third tallest—an indicator of what many builders are doing to maximize space in crowded urban cities: build upward.

Building Industrial Strength

It’s not just office space that is expanding—manufacturing is increasing its footprint in Utah as well.

In Utah County, notable projects include doTerra’s expansion. Along with a 67,000 square-foot office building and a nearly 40,000 square-foot medical clinic, the essential oil company has doubled its Pleasant Grove manufacturing facility to 324,000 square feet. They are also completing construction on a 270,000 square-foot fulfillment center in Lindon, along the I-15 corridor.

Also along I-15, Roderick Enterprises launched construction on Catalyst Business Park in American Fork this spring. The master-planned park will feature more than 10 buildings offering more than 1.4 million square feet of industrial space.

In Salt Lake City’s northwest quadrant, Amazon made headlines last year after it opened its 850,000 square-foot fulfillment center. Headlines have also been following the development of Utah’s Inland Port, a 16,000-acre hub that would facilitate intermodal shipments, cargo storage, and distribution for a multi-state region. According to Jarrod Hunt, executive vice president of industrial services at Colliers International, early development has already begun, “the new Inland Port has started on their first phase, a couple of 225,000 square-foot buildings are underway.”

Nearby in the International Center, manufacturing space continues to grow. “Exeter Property Group has built two buildings in the International Center, each just over 100,000 square feet,” said Mr. Hunt. “The John Cannon Logistics Center has 53,000 square feet of distribution warehouse space in the International Center under construction.”

Just south of the International Center, Copper Crossing at I-80 is underway. “They’ve got two buildings under construction right now,” said Mr. Hunt. The project has announced a 420-acre master plan, which includes a $275 million UPS regional operations facility and nearly 6 million square feet of logistics, warehouse and manufacturing space.

Throughout Salt Lake and Utah County, Mr. Hunt summarizes, “All told, there’s north of 5 million square feet of warehouse space that is under construction in various stages.” And Mr. Welch adds that this kind of growth is only likely to continue. “As airport expansion continues to unfold, I see a lot of opportunity for industrial development in northwest Salt Lake City, only becoming stronger as these developments unfold more and more.”

Shopping For Retail Space

Retail development is also making headway in Utah. CenterCal Properties began construction last summer on a new mixed-use project, Mountain View Village, in Riverton. The developer made its foray into Utah’s retail sector with its successful Farmington Station project. “Farming Station has been a crown jewel of the state in terms of retail development because of the mix they’ve created in that space,” says Mr. Welch. Mountain Village is expected to follow suit, with its retail, entertainment, and office center space in Riverton. The 85-acre property will introduce over 1 million square feet of new retail space upon completion.

Mr. Welch indicated that because the Wasatch Front is limited geographically, redevelopment will be key for retail. He says, “We have mountains, lakes, valleys—these all create limitations in how you develop the land and meet the community’s evolving needs. Available land is an issue that we’re running into on many fronts, and it’s forcing a lot of redevelopment for retail centers that have been around for a while.”

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University Place in Orem, for example, is a redevelopment retail project that continues to diversify its offerings with mixed-use space. The redevelopment began in 2014 and is slated to continue through 2024, according to Woodbury Corporation, owners of University Place.

“University Mall was antiquated. They went in and decided that [the mall] needed some life,” says Mr. Welch. “Now you have Class A office, apartments, quality retail, parks for experiential opportunities—it’s a very solid, good development. When you combine aspects of multi-family apartments with retail, shopping, office, you get great synergy, you’re clearly seeing all these components married together within successfully repositioned developments.”

With ambitious projects throughout the Wasatch Front, the silhouette of Utah’s commercial landscape is indeed shifting. As tech, business, manufacturing, and retail remain strong, the construction industry is keeping pace to provide the space for that success to thrive. This kind of growth is a  good thing for the millions of Utahns who work and live within these valleys.

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