SALT LAKE CITY—Oct. 2, 2012—Commerce Real Estate Solutions, an independently owned and operated member of the Cushman & Wakefield Alliance (www.comre.com), released its 3rd quarter, 2012 office Market Beat Report for Salt Lake City.
“Utah remains at the forefront of the economic recovery with an unemployment rate of 5.8 percent and in the past year, the state has had a net increase of 24,300 jobs,” said Dana Baird, Senior Director of Cushman & Wakefield | Commerce. “About 9,500 of those jobs were within the financial, professional and business services sectors. As such, the third quarter saw an increase in the absorption rates as well as a slight dip in the office vacancy rate.”
Salt Lake City Metro Office: Job gains bolster office market and reverse negative absorption trend
- The third quarter displayed positive absorption of 163,881 square feet cutting into the year-to-date numbers which are currently at 79,776 square feet of negative absorption
- Downtown area showed slight positive absorption; however, the suburban market was much stronger absorbing 155,111 square feet this quarter
- The Central East and North West suburban quadrants of Salt Lake County faired the best, increasing overall absorption by 126,175 square feet and 66,756 square feet respectively, year-to-date
- The overall direct combined vacancy rate for all property classes in the Salt Lake City Metro Office Market ended the third quarter at 14.76 percent, a slight decrease of one tenth of a percentage point from mid-year 2012
- Suburban vacancy saw a modest decline with the North East submarket seeing the largest decrease to 5.78 percent vacancy, down from 7.95 percent at the beginning of the year
- Overall full service direct lease rates were up this quarter by 2.60 percent to $20.39 per square foot per year
- The Central East quadrant experienced the most significant increase in class A average lease rates at $28.77 per square foot
- The Central East quadrant now represents the most expensive class-A submarket in the state.
- The new Old Mill Corporate Center IV set a new high asking lease rate for the suburban office market at $32 per square foot
- The Salt Lake Market added 267,496 square feet of newly completed office space this quarter, bringing the total amount of completed construction year-to-date 2012 to 543,946 square feet
- 60 percent of space is pre-leased, demonstrating a trend in tenants desiring to relocate to newer office buildings
- The suburban market expects to add an additional 176,972 square feet to the south valley which includes the completion of The Pointe VI, a 118,972 square foot building and a 58,000 square foot building, that will be the new home for Hoopes Vision