SALT LAKE CITY-“We anticipate that the business, economy and job growth accolades for Utah we heard during 2011 will continue throughout 2012.” So says Michael Lawson, president and CEO of Commerce Real Estate Solutions, an independently owned and operated member of the Cushman & Wakefield Alliance.
The firm recently released its 2012 forecast for the commercial real estate markets within the largest counties of Utah and while the past years have been challenging for the area, Lawson says that have also been opportunistic. “Our clients are actively and aggressively pursuing the right opportunities to meet their specific needs-more space, better space, better located space, acquisition of buildings and property for current and future use.”
For the office market, given the current levels of new activity and transactions underway, the forecast anticipates absorption to remain strong through 2012. “The Salt Lake market will add 847,000 square feet of new construction in 2012, with 63% of the space pre-committed,” says the forecast.
The forecast also points out that overall vacancy will continue to decline in 2012, although at a more modest pace than in 2011. Asking lease rates will also rebound as vacancy continues to decline and landlord concessions are reduced, particularly in class A and B suburban properties, the forecast says.
As expanded mass transit comes online in the form of additional commuter rail and TRAX options, Lawson says the firm anticipates more office development and expansion activity at key transit oriented developments. Overall, there is optimism that the market fundamentals will continue to show improvement throughout 2012.
As for the industrial market, vacancies are expected to continue to be at stabilized levels with an overall reduction in larger increment spaces. Vacancy in the smaller increment spaces will increase. Lease rates will remain consistent at current rates within +/- 5% and lease activity is anticipated to keep showing improvement, says the forecast. “With the exception of a greater portion of the large increment spaces, tenants will continue to seek short term leases.”
For retail, the firm expects to see modest improvement in the overall market due to “the ability of retailers moving to stronger locations while maintaining essentially the same economic costs. As stores downsize or pull out, other stronger regional and local retailers are moving into these prime locations and enjoying lower rates.”
In addition, the firms says to expect an influx of new national tenants to begin looking at Utah as a viable market. “With the additions of Crate and Barrel and H&M, other national retailers such as Container Store are beginning to look for a spot to land within the Salt Lake market,” Lawson says.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
