The commercial real estate market in Utah continues to strengthen according to the third quarter Marketbeat report from Cushman & Wakefield Commerce.
While the investment, retail and industrial markets all reporting a strong quarter, the office market was a standout as nearly 16,000 jobs have been added over the past year alone.
“The growth of Salt Lake’s office market is significantly changing as we approach the end of 2016,” said Trigger Reital, market leader and managing director of the Cushman & Wakefield Commerce Salt Lake City office. “The third quarter saw large construction completions and projects, primarily 111 Main, that will add several hundred-thousand square feet to the market. We expect this inventory to provide opportunities for companies looking to grow. This is all happening while the investment market is on par to be another record-breaking year. We could see investment sales top the $2 billion mark for the first time ever in Utah.”
The vacancy rate of 11.4 percent was unchanged from the second quarter and more than 131,000 square feet were absorbed during the third quarter. As such, the overall asking rate rose to $23.09 square feet, which increased 3.2 percent year-over-year. Two construction completions in Draper entered the office market this quarter, Vista Station 7 and The Point I, who together added 200,000 square feet of Class A space to the Southeast submarkets. With the completion of these buildings, there is still nearly 1.4 million square feet under construction.
The investment market, like office, has also seen significant growth in the third quarter. With more than $1.54 billion in investment sales year-to-date, the volume is set to break last years $1.88 billion record and potential reach $2 billion for the first time in the state’s history.
The industrial market saw more than 780,000 square feet of absorption in the third quarter and vacancy climbed to 7.5 percent to 7.2 percent. The average transaction size is up 8 percent year-over-year with 160 transactions. Development was a major driver with more than 1.5 million square feet of completed construction. The retail market did not report any significant new inventory and vacancy fell to 5.3 percent while the average asking rate rose more than 3.1 percent year-over-year.
To access the full Marketbeat reports, please visit: http://www.comre.com/research