New construction (sf) Total vacancy rate
Salt Lake County Office Market
Source: Cushman & Wakefield
Salt Lake City office market
The greater Salt Lake City metro area logged 1.2 million square feet of
new office-building completions in 2016, the first time since 2008 that the
market surpassed 1 million square feet, according to a report by Cushman
& Wakefield. The Salt Lake City area had one of the lowest unemployment
rates — at 2.4 percent last year — in the nation among metro areas with
more than 1 million residents.
The stellar jobs picture was driven, in large part, by the area’s tech
industry, which expanded by 14.1 percent from 2013-2015, propelling a
12. 4 percent increase in office-market rent growth over the period,
EDCUtah reports. Another 853,000 square feet of office space is slated to
come online in Salt Lake City in 2017, according to Cushman & Wakefield.
Even with all the new construction, the average asking rent for office space
in Salt Lake City jumped from $22.85 to $23.46 per square foot year over
year as of first-quarter 2017.
What the locals say
“A lot of people [in the mortgage and real estate business] are
wanting to get into commercial now because that’s where
they feel they’re going to get the most return, because of the
increase in the values in Utah. Residential may already be at
the high point and commercial is still going up. A lot of that is
being driven by tech growth, for sure. We have great
colleges that graduate excellent people for those jobs. And
it’s not only the office market. There’s a ton of multifamily.
The rental market is extremely hot here right now. We’re
short on rentals, short on commercial [office]. They can’t
build it fast enough. We’ve got crazy growth here.”
By Bill Conroy
Utah’s economic engine is a well-tuned machine.
The nation’s first transcontinental railroad became reality in 1869 when
the rail lines of the Union and Central Pacific railroads were connected at
Promontory Summit in the Beehive State, then known as the Utah territory.
Slightly more than 130 years later, the Utah capital of Salt Lake City was
again on the national stage as host of the XIX Olympic Winter Games, which
attracted some 2,000 athletes from 85 countries.
In recent years, Utah has earned bragging rights for having one of the
strongest-performing economies in the nation. In 2016, the state added
jobs at twice the pace of the nation overall and its unemployment rate
decreased to the lowest level in eight years, according to the Utah Economic
Council. The state’s gross domestic product (GDP) grew by 3. 3 percent in
second-quarter 2016, the second-fastest pace in the nation, according to the
Department of Commerce.
Utah’s largest industry sectors include finance, manufacturing and technology, which together account for nearly 40 percent of its GDP, according to
state figures. Leading the charge is the finance industry, which includes major players like Goldman Sachs, Zions Bank, Fidelity Investments and Discover
Products. It accounts for more than 21 percent of GDP, state figures show.
With some 15 active institutions, Utah is home to the nation’s largest concentration of industrial banks, which are niche lenders primarily making loans
to businesses, according to the Utah Governor’s Office of Economic Development. The state’s financial-services sector includes some 6,100 companies
that employ more than 75,000 people.
Manufacturing is the other major engine of Utah’s economy, accounting for
nearly 12 percent of GDP and employing more than 125,000 people, according to the National Association of Manufacturers. The major products manufactured by the state fall into the miscellaneous category because they are
not easily classified, including medical equipment, jewelry, sporting goods,
toys and office supplies. The state also is home to major food-products and
computer/electronics manufacturers, according to the Utah Department of
Technology is an emerging economic sector for the state. Companies like
Adobe, eBay, Qualtrics and EMC Corp. have operations in Utah. The state
ranks as one of the fastest-growing for tech jobs, according to the Economic
Development Corporation of Utah (EDCUtah), and is home to more than
7,000 tech-focused companies. n
commercial-construction and SBA financing,