SALT LAKE CITY, Jan. 13, 2016 – According to Cushman & Wakefield/Commerce, Salt Lake County industrial demand remained strong, pushing absorption to nearly 2 million square feet, which continued to exceed the five year average.
Activity remained strongest in spaces in excess of 100,000 square feet with both leasing and sale activity reaching the second highest level in the past five years. This is due to the proximity Salt Lake City offers by way of distribution and logistics chains. Salt Lake City reaches all markets from Denver, Phoenix, Los Angeles, San Francisco, Oregon and others within a 24 hour drive, making it an excellent and dynamic location for distribution. Expect to see strong activity in this sector throughout 2016.
2015 saw more than 3,000,0000 square feet of speculative development, most of which was the 100,000+ square foot segment of the market with spaces divisible to 30,000 square feet. 2016 will see continued speculative development in a variety of market segments. Due to low vacancy, demand and rising market rents, speculative development of smaller product will be reintroduced to the vibrant Salt Lake City Market.
“This past year we saw investment sales reach $194 million, with an average cap rate of 7.48 percent. This coupled with low vacancy is evidence of a strong industrial market,” said Trigger Reital, managing director and market leader of Cushman & Wakefield/Commerce’s Salt Lake City office. “This strong segment of the market will continue throughout 2016.”
More than two million square feet of construction is expected to be completed in 2016 with the majority of buildings in excess of 100,000 square feet. This will cause availabilities to outpace absorption, triggering vacancy to rise slightly. Another bright spot to look forward to in the near future is the prison relocation, which will open large tracts of land creating many new opportunities in the northwest quadrant over the next 10 years.
See the attached infographic for additional details.
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About Cushman & Wakefield/Commerce
Cushman & Wakefield /Commerce, headquartered in Salt Lake City, Utah is an independently owned and operated member of the Cushman & Wakefield Alliance, with offices throughout Utah, Nevada, Washington and Idaho. The firm partners with its sister company, Cushman & Wakefield/NorthMarq to provide innovative commercial real estate solutions to occupier and investor clients, offering transaction services, capital markets services, occupier and investor services, and real estate advisory.
Together the firms manage more than 52 million square feet of retail, industrial, and office assets, have annual revenues of more than $100 million, and employ more than 750 professionals. Learn more at www.comre.com, and www.cushwakenm.com. Cushman & Wakefield/Commerce and Cushman & Wakefield/NorthMarq are part of the Cushman & Wakefield platform.
About Cushman & Wakefield
The successful merger of Cushman & Wakefield and DTZ closed September 1, 2015. The firm now operates under the iconic Cushman & Wakefield brand and has a new visual identity and logo that position the firm for the future and reflect its trusted global legacy and wider history. The new Cushman & Wakefield is led by Chairman & Chief Executive Officer Brett White and Global President Tod Lickerman. The company is majority owned by an investor group led by TPG, PAG, and OTPP.
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.