SALT LAKE CITY, April 6, 2016 – According to Cushman & Wakefield/Commerce’s first quarter MarketBeat report, Salt Lake office market fundamentals remained strong, positioning the sector for another impressive year. With an overall vacancy of 11.8 percent, lease rates pushed higher, increasing by 4.8 percent year-over-year. Additionally, the imminent completion of 1.3 million square feet of new construction, almost 70 percent of which is preleased, in 2016 will drive high absorption numbers.
Suburban markets continued to experience unprecedented development. View 72’s Building 8, located in the Central West submarket, was the largest project completed during first quarter. The 125,000 square foot, class A building was 90 percent preleased with Zagg and Marriott as major tenants. This completion pushed the area’s lease rates up by more than 14 percent year-over-year. In addition, the Southeast and Southwest submarkets maintained below-average vacancy and saw lease rates rise by 7.4 percent and 9.6 percent respectively.
“Although suburban markets saw more development, Salt Lake City’s Central Business District is experiencing its fair share,” said Trigger Reital, managing director – market leader of the Salt Lake City office of Cushman & Wakefield/Commerce. “111 Main will be completed fourth quarter this year, as should the 2,500 seat George S. and Dolores Doré Eccles Theater, which shares its site with 111 Main. Adding to the action is the rejuvenation of Regent Street, which will boast a row of retail suites, restaurants and a new boutique hotel.”
New inventory will likely cause a temporary increase in vacancy and will also be the primary driver of increasing absorption numbers and lease rates. Average lease sizes are expected to decrease marginally as small to mid-sized tenants play a larger role in market activity. A handful of tenants who have master-leased large amounts of space (in anticipation of future expansion) may begin subleasing that space at shorter terms and below market rates.
About Cushman & Wakefield/Commerce
Cushman & Wakefield/Commerce operates the Cushman & Wakefield business in Idaho, Nevada, Utah and Washington. 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 52 million sq. ft. of retail, industrial, and office assets, have transaction revenues of more than $2 billion, and employ more than 750 professionals. Learn more at www.comre.com.
About Cushman & Wakefield
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.