Market Report Q1
Accelerating success.
Utah
Colliers
Headline
Office construction in Salt Lake County remained stagnant in the first quarter of 2024 as developers exercised caution in the face of economic uncertainties just two major projects are expected to reach completion this year. Average asking lease rates increased steadily, especially downtown. Class B properties saw the most negative absorption, while some Class A submarkets showed resilience Vacancy rates reached record highs countywide, particularly among Class B properties and in the West Valley/Lake Park submarket
Office construction in Salt Lake County remained stagnant since last quarter at 238,552 square feet currently under construction The two largest projects The Beverly at Holladay Hills (at 120,000 square feet) and Highpointe Center (at 75,000 square feet) should be completed this year With no further projects expected to commence in 2024, office construction may reach an all-time low by the end of this year as developers continue to exercise caution in such an uncertain landscape
Office 24Q1 Salt Lake County Colliers | Salt Lake County| 24Q1 | Office Report
Current Market Indicators Historic Comparison Construction 1st Quarter Transactions Sale 11747 S Lone Peak Pkwy Holiday Oil 84,368 SF Sale 5500 W Amelia Earhart Dr Quiktrip Corp 46,110 SF Sale 205 N 400 W VTRE Development 30,418 SF Lease 95 S State St Undisclosed 32,047 SF Lease 10355 S Jordan Gtwy Canopy Tax 31,441 SF 50.30% 31.44% 8.38% 9.87% Cottonwood Draper Periphery Sandy South Towne Direct Vacancy Rate 17.34% YOY FORECAST YTD Absorption -219K SF YOY FORECAST Under Construction 627K SF YOY FORECAST Lease Rate (FSG) $27.34/ SF YOY FORECAST
56.59% Preleased 23Q1 23Q4 24Q1 Total Inventory (SF) 41,803,977 42,673,391 42,670,514 New Supply (SF) 0 191,684 0 YTD Absorption (SF) (561,126) (1,085,596) (219,137) Direct Vacancy 14.21% 16.23% 17.34% Sublease Vacancy 4.94% 5.00% 4.83% Total Vacancy 19.14% 21.23% 22.17% Under Construction (SF) 626,552 218,552 238,552 Overall Asking Lease Rates (FSG) $26.18 $27.21 $27.34
Top Construction Projects
Avg. Asking Lease Rates
Average asking lease rates for office space in Salt Lake County reached $27 34 full-service gross (FSG) by the end of the first quarter of 2024, a $0 13 increase from the previous quarter and a notable $1 16 increase from the same period last year. Downtown Class A properties achieved the highest asking lease rates, averaging $35.33 FSG, compared to $30 03 FSG for Class A properties in suburban areas Downtown spaces typically command a premium rate due to their central and prestigious location.
Absorption
Salt Lake County's office market recorded 219,137 square feet of negative absorption in the first quarter of 2024, with Class B properties accounting for 222,453 square feet of overall negative absorption countywide Class A and Class C properties saw relatively limited activity, at 20,530 square feet of positive absorption and 17,214 square feet of negative absorption, respectively The West Valley/Lake Park and Draper submarkets were the biggest contributors of Class A positive absorption thanks to Nusano’s 60,000-square-foot lease in West Valley's Soleil Technology Park and ProofPoint’s expansion and Baltic Pointe’s lease of the majority of the remaining space in Minuteman VI
Vacancy
Salt Lake County's office vacancy rates continued to rise in the first quarter, reaching a record high direct vacancy rate of 17 34 percent and a sublease vacancy rate of 4 83 percent, bringing the overall vacancy rate for the county to 22 17 percent Class B properties and the West Valley/Lake Park submarket saw the highest direct vacancy rates, with Class B properties reaching 25 15 percent and the West Valley/Lake Park submarket reporting a staggering 36.25 percent. Despite these challenges, stakeholders who embrace proactive strategies and adaptive approaches can find opportunities for success amid evolving market dynamics in Salt Lake County's office market $0.00
(1,500,000) (1,000,000) (500,000) 0 500,000 1,000,000
Office 24Q1 Salt Lake
Colliers | Salt Lake County| 24Q1 | Office Report
County
$15.00 $20.00 $25.00 $30.00 $35.00 2020 2021 2022 2023 2024 Class A Class B Class C Overall
2020 2021 2022 2023 2024 Class A Class B Class C Overall 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 2020 2021 2022 2023 2024 Class A Class B Class C Overall
$5.00 $10.00
Salt Lake County | 24Q1 | Office | Market Statistics
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET Airport/International Center A 0 0 0.00% 0 0.00% 0.00% 0 0B 1,705,349 534,821 31.36% 157,147 9.21% 40.58% (2,600) (2,600) $25.19 C 575,417 29,502 5.13% 0 0.00% 5.13% 0 0 $19.91 TOTAL 2,280,766 564,323 24.74% 157,147 6.89% 31.63% (2,600) (2,600) $24.92 CBD A 3,804,491 474,083 12.46% 33,710 0.89% 13.35% (3,937) (3,937) $35.40 B 3,857,083 1,102,455 28.58% 77,865 2.02% 30.60% (40,777) (40,777) $28.66 C 1,730,114 308,885 17.85% 44,499 2.57% 20.43% 24,472 24,472 $24.26 TOTAL 9,391,688 1,885,423 20.08% 156,074 1.66% 21.74% (20,242) (20,242) $29.75 Central Valley East A 0 0 0.00% 0 0.00% 0.00% 0 0B 924,100 132,404 14.33% 1,825 0.00% 14.33% (18,914) (18,914) $24.38 C 920,893 48,150 5.23% 0 0.00% 5.23% (11,420) (11,420) $17.34 TOTAL 1,844,993 180,554 9.79% 1,825 0.00% 9.79% (30,334) (30,334) $22.55 Central Valley West A 1,135,697 49,240 4.34% 53,960 0.00% 4.34% 0 0 $28.23 B 660,591 114,876 17.39% 12,184 1.84% 19.23% (11,664) (11,664) $22.49 C 523,853 42,964 8.20% 0 0.00% 8.20% 6,482 6,482 $17.52 TOTAL 2,320,141 207,080 8.93% 66,144 2.85% 11.78% (5,182) (5,182) $22.94 Cottonwood A 1,946,380 245,373 12.61% 15,624 0.80% 13.41% (257) (257) $33.43 B 347,543 53,130 15.29% 17,399 5.01% 20.29% 28,717 28,717 $24.00 C 0 0 0.00% 0 0.00% 0.00% 0 0TOTAL 2,293,923 298,503 13.01% 33,023 1.44% 14.45% 28,460 28,460 $31.75 Draper A 3,298,489 346,316 10.50% 461,586 13.99% 24.49% 50,854 50,854 $29.61 B 1,475,493 437,138 29.63% 101,098 6.85% 36.48% 10,436 10,436 $27.20 C 408,209 25,263 6.19% 11,117 0.00% 6.19% 0 0 $23.00 TOTAL 5,182,191 808,717 15.61% 573,801 11.07% 26.68% 61,290 61,290 $28.38
A 0 0 0.00% 0 0.00% 0.00% 0 0B 219,230 44,956 20.51% 0 0.00% 20.51% 126 126 $24.60 C 120,883 997 0.82% 0 0.00% 0.82% 0 0 $19.95 TOTAL 340,113 45,953 13.51% 0 0.00% 13.51% 126 126 $24.52
Foothill
Salt Lake County | 24Q1 | Office | Market Statistics
Office 24Q1 Salt Lake County Colliers | Salt Lake County| 24Q1 | Office Report
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) Interchange A 150,000 0 0.00% 5,864 3.91% 3.91% 0 0B 0 0 0.00% 0 0.00% 0.00% 0 0C 519,237 2,647 0.51% 79,474 15.31% 15.82% 0 0 $13.00 TOTAL 669,237 2,647 0.40% 85,338 12.75% 13.15% 0 0 $13.00 Research Park A 529,560 0 0.00% 0 0.00% 0.00% 0 0B 169,236 13,188 7.79% 0 0.00% 7.79% 0 0 $23.00 C 444,944 0 0.00% 0 0.00% 0.00% 0 0TOTAL 1,143,740 13,188 1.15% 0 0.00% 1.15% 0 0 $23.00 Periphery A 1,374,960 249,771 18.17% 17,176 1.25% 19.41% (4,301) (4,301) $35.26 B 1,531,602 209,395 13.67% 40,347 2.63% 16.31% 9 9 $25.21 C 724,164 62,770 8.67% 6,037 0.83% 9.50% (20,106) (20,106) $19.55 TOTAL 3,630,726 521,936 14.38% 63,560 1.75% 16.13% (24,398) (24,398) $29.38 Sandy South Towne A 4,002,544 385,513 9.63% 481,108 12.02% 21.65% (17,436) (17,436) $27.78 B 1,445,133 385,493 26.68% 29,041 2.01% 28.68% (164,901) (164,901) $23.96 C 257,963 43,496 16.86% 0 0.00% 16.86% 0 0 $18.53 TOTAL 5,705,640 814,502 14.28% 510,149 8.94% 23.22% (182,337) (182,337) $25.55 South West Valley A 571,384 154,365 27.02% 0 0.00% 27.02% 1,992 1,992 $29.33 B 22,000 0 0.00% 0 0.00% 0.00% 0 0C 0 0 0.00% 0 0.00% 0.00% 0 0TOTAL 593,384 154,365 26.01% 0 0.00% 26.01% 1,992 1,992 $29.33 Sugarhouse A 330,047 67,370 20.41% 10,212 3.09% 23.51% (46,443) (46,443) $35.94 B 401,427 37,700 9.39% 0 0.00% 9.39% (1,891) (1,891) $28.27 C 243,135 0 0.00% 0 0.00% 0.00% 0 0TOTAL 974,609 105,070 10.78% 10,212 1.05% 11.83% (48,334) (48,334) $32.66 Union Park District A 549,128 104,120 18.96% 53,069 9.66% 28.63% 6,090 6,090 $27.38 B 878,222 144,030 16.40% 4,500 0.51% 16.91% 3,175 3,175 $26.20 C 710,665 39,680 5.58% 0 0.00% 5.58% (1,736) (1,736) $19.89 TOTAL 2,138,015 287,830 13.46% 57,569 2.69% 16.16% 7,529 7,529 $25.84 West Valley/Lake Park A 1,195,505 695,203 58.15% 54,388 4.55% 62.70% 33,968 33,968 $28.53 B 1,995,106 721,260 36.15% 290,825 14.58% 50.73% (24,169) (24,169) $22.87 C 970,737 91,917 9.47% 0 0.00% 9.47% (14,906) (14,906) $18.20 TOTAL 4,161,348 1,508,380 36.25% 345,213 8.30% 44.54% (5,107) (5,107) $24.99
Salt Lake County | 24Q1 | Office | Market Statistics
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2021 2022 2023 2024 Class A Class B Class C Overall Sublease Availability BUILDING NAME SUBMARKET BUILDING SF SUBLEASE SF Towne Ridge Center I Sandy South Towne 128,086 128,086 Vista Station 6 Draper 127,420 124,860 The Pointe I Draper 109,244 106,758 Wingcrest Bldg 2 Airport/Intl Center 89,292 83,670 Sorenson Research 8 West Valley/Lake Park 81,184 81,184 Time Square 5 Interchange 79,474 79,474 SoJo Station 2 Sandy South Towne 179,019 76,736
Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) Quarterly Totals A 18,888,185 2,771,354 14.67% 1,186,697 6.28% 20.96% 20,530 20,530 $31.01 B 15,632,115 3,930,846 25.15% 732,231 4.68% 29.83% (222,453) (222,453) $25.78 C 8,150,214 696,271 8.54% 141,127 1.73% 10.27% (17,214) (17,214) $21.36 TOTAL 42,670,514 7,398,471 17.34% 2,060,055 4.83% 22.17% (219,137) (219,137) $27.34
Largest Sublease Availabilities
Industrial 24Q1
Headline
Salt Lake County is witnessing a flurry of industrial construction, with 4,762,975 square feet of space underway just a slight decrease from the same time last year. Average lease rates rose to $0.82 triple net (NNN) countywide and up to $1.15 NNN in the South East submarket Several notable transactions generated a positive 1,247,849 square feet of absorption, while vacancy rates increased to 4.61 percent as supply finally catches up to demand
Current Market Indicators
Historic Comparison Construction
Boasting a total of 4,762,975 square feet of space under construction at the end of the first quarter (just a slight decrease from the 5,154,322 square feet of construction recorded at the same time in 2023), Salt Lake County's industrial scene is alive with activity Despite some fluctuation in the pace of industrial development, over 3 million square feet of current construction is expected to be complete by year end The North West and South West submarkets are home to the highest levels of current construction, at 3,951,135 and 811,840 square feet,
Salt Lake County Colliers | Salt Lake County| 24Q1 | Industrial Report
respectively 82.96% 17.04% North West South West 35.70% Preleased 23Q1 23Q4 24Q1 Total Inventory (SF) 137,846,854 153,010,684 157,491,994 New Supply (SF) 2,415,494 2,330,881 541,719 YTD Absorption (SF) +2,347,387 +3,736,680 +1,247,849 Direct Vacancy 3.14% 5.27% 4.61% Sublease Vacancy 0.37% 2.11% 2.32% Total Vacancy 3.51% 7.38% 6.94% Under Construction (SF) 5,154,322 4,896,078 4,762,975 Overall Asking Lease Rates (NNN) $0.77 $0.84 $0.82 Direct
YOY
YTD Absorption
SF YOY FORECAST Under Construction 4.8M SF YOY FORECAST Lease Rate (NNN)
SF YOY FORECAST
Vacancy Rate 4.61%
FORECAST
1.2M
$0.82/
Top Construction Projects
Industrial 24Q1
Avg. Asking Lease Rates
The average asking lease rate for industrial space in Salt Lake County surged to $0.82 NNN in the first quarter of 2024, up by $0.05 from the same time in 2023. Rates were highest in the South East submarket up to $1 15 NNN but only between two available spaces Spaces under 5,000 square feet in size averaged $1.08 NNN countywide as landlords capitalized on limited availability. Expect lease rates to continue an upward trajectory as demand outpaces supply.
Absorption
Salt Lake County's industrial market experienced robust absorption in the first quarter of this year, totaling a positive 1,247,849 square feet Buildings over 100,000 square feet in size accounted for 899,122 square feet of overall absorption, including 805,106 square feet in the North West submarket alone. Alliance Door Products leased nearly 92,000 square feet in Salt Lake City, and ERCExpert com secured approximately 42,000 square feet in Sandy, underscoring the market's resilience and sustained demand for industrial space in strategic locations.
Vacancy
The direct vacancy rate for industrial space in Salt Lake County increased from 1 47 percent in the first quarter of 2023 to 4.61 percent one year later an increase largely driven by newly completed buildings entering the market either fully vacant or with minimal preleasing Anticipate further increases in vacancy rates as more construction projects reach completion and supply finally meets demand after years of imbalance.
(1,000,000) 1,000,000 3,000,000 5,000,000 7,000,000 9,000,000 11,000,000
Colliers | Salt Lake County| 24Q1 | Industrial Report
Salt Lake County
$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2020 2021 2022 2023 2024 0-5K SF 5-20K SF 20-50K SF 50-100K SF 100K+ SF Overall
0-5K SF 5-20K SF 20-50K SF 50-100K SF 100K+ SF Overall 2020 2021 2022 2023 2024 0.00% 2.00% 4.00% 6.00% 8.00% 2020 2021 2022 2023 2024 0-5K SF 5-20K SF 20-50K SF
1st Quarter Transactions
Lease
1456 S 5500 W
Alliance Door Products 92K SF
Transaction Date: 03/22/2024
Lease 1960 S 4250 W Nusano Inc 90K SF
Transaction Date: 02/26/2024
Expansion 4375 W 1980 S DZV Distributing 66K SF
Transaction Date: 02/12/2024
Extension
9229 S Prosperity Rd
Genuine Parts Company 65K SF
Transaction Date: 02/26/2024
Renewal 7172 S Airport Rd
Alpha Source 49K SF
Transaction Date: 03/27/2024
Salt Lake County Colliers | Salt Lake County| 24Q1 | Industrial Report
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Building Size Total Inventory SF SF % Vacant SF % Vacant % Vacant Current Period YTD Rate (NNN) INDUSTRIAL MARKET Central East 0-5,000 198,060 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 2,916,764 8,814 0.30% 0 0.00% 0.30% 11,420 11,420 $1.17 20,001-50,000 2,430,277 0 0.00% 23,595 0.97% 0.97% 0 050,001-100,000 733,625 0 0.00% 0 0.00% 0.00% 15,000 15,000100,001+ 1,695,588 146,177 8.62% 28,163 1.66% 10.28% (23,666) (23,666) $0.55 TOTAL 7,974,314 154,991 1.94% 51,758 0.65% 2.59% 2,754 2,754 $0.65 Central West 0-5,000 93,221 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 2,229,040 22,416 1.01% 0 0.00% 1.01% (9,475) (9,475) $1.03 20,001-50,000 4,916,403 60,470 1.23% 0 0.00% 1.23% 8,550 8,550 $0.97 50,001-100,000 4,698,942 102,589 2.18% 0 0.00% 2.18% 36,621 36,621 $1.03 100,001+ 4,890,622 0 0.00% 0 0.00% 0.00% 0 0TOTAL 16,828,228 185,475 1.10% 0 0.00% 1.10% 35,696 35,696 $1.01 North East 0-5,000 190,852 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 1,911,832 82,297 4.30% 0 0.00% 4.30% (22,569) (22,569) $1.07 20,001-50,000 1,671,499 102,002 6.10% 14,900 0.89% 6.99% (6,943) (6,943) $0.84 50,001-100,000 1,816,596 0 0.00% 0 0.00% 0.00% 19,879 19,879100,001+ 977,714 0 0.00% 0 0.00% 0.00% 0 0TOTAL 6,568,493 184,299 2.81% 14,900 0.23% 3.03% (9,633) (9,633) $0.95 North West 0-5,000 227,180 4,368 1.92% 0 0.00% 1.92% 0 0 $1.09 5,001-20,000 4,729,172 46,370 0.98% 4,405 0.09% 1.07% 7,206 7,206 $1.01 20,001-50,000 11,541,447 199,463 1.73% 48,398 0.42% 2.15% 45,038 45,038 $0.86 50,001-100,000 13,237,647 217,922 1.65% 128,051 0.97% 2.61% 99,771 99,771 $1.03 100,001+ 71,062,208 4,637,344 6.53% 2,853,164 4.02% 10.54% 805,106 805,106 $0.79 TOTAL 100,797,654 5,105,467 5.07% 3,034,018 3.01% 8.08% 957,121 957,121 $0.81 South East 0-5,000 23,270 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 402,430 0 0.00% 0 0.00% 0.00% 0 020,001-50,000 634,645 28,920 4.56% 0 0.00% 4.56% 4,790 4,790 $1.15 50,001-100,000 303,797 0 0.00% 0 0.00% 0.00% 8,440 8,440100,001+ 670,144 0 0.00% 0 0.00% 0.00% 0 0TOTAL 2,034,286 28,920 1.42% 0 0.00% 1.42% 13,230 13,230 $1.15 South West 0-5,000 132,618 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 3,130,049 21,592 0.69% 11,224 0.36% 1.05% 0 0 $1.32 20,001-50,000 4,011,769 61,460 1.53% 33,666 0.84% 2.37% 77,550 77,550 $1.41 50,001-100,000 4,685,494 16,373 0.35% 0 0.00% 0.35% 53,449 53,449 $1.25 100,001+ 11,329,089 1,507,459 13.31% 514,574 4.54% 17.85% 117,682 117,682 $0.77 TOTAL 23,289,019 1,606,884 6.90% 559,464 2.40% 9.30% 248,681 248,681 $0.82 Quarterly Totals 0-5,000 865,201 4,368 0.50% 0 0.00% 0.50% 0 0 $1.08 5,001-20,000 15,319,287 181,489 1.18% 15,629 0.10% 1.29% (13,418) (13,418) $0.99 20,001-50,000 25,206,040 452,315 1.79% 120,559 0.48% 2.27% 128,985 128,985 $0.94 50,001-100,000 25,476,101 336,884 1.32% 128,051 0.50% 1.82% 233,160 233,160 $0.98 100,001+ 90,625,365 6,290,980 6.94% 3,395,901 3.75% 10.69% 899,122 899,122 $0.76 TOTAL 157,491,994 7,266,036 4.61% 3,660,140 2.32% 6.94% 1,247,849 1,247,849 $0.82
Industrial 24Q1
Market Overview
Market Activity
North West
Direct Vacancy Rate: 5.07%
YTD Absorption: +957,121 SF
Lease Rate: $0.81 NNN
Central West
Direct Vacancy Rate: 1.10%
YTD Absorption: +35,696 SF
Lease Rate: $1.01 NNN
North East
Direct Vacancy Rate: 2.81%
YTD Absorption: (9,633) SF
Lease Rate: $0.95 NNN
Central East
Direct Vacancy Rate: 1.94%
YTD Absorption: +2,754 SF
Lease Rate: $0.65 NNN
South West
Direct Vacancy Rate: 6.90%
YTD Absorption: +248,681 SF
Lease Rate: $0.82 NNN
South East
Direct Vacancy Rate: 1.42%
YTD Absorption: +13,230 SF
Lease Rate: $1.15 NNN
Current Market Indicators
Headline
The first quarter of 2024 was a mix of retail trends in Salt Lake County. Construction surged, with 875,496 square feet of retail space underway, including notable projects like The Ranch, Academy Village and Midas Crossing Increased demand brought average asking lease rates up to $21 21 triple net (NNN), a significant uptick from the previous year Limited available space and rising construction costs are the biggest challenge retailers face.
Historic Comparison Construction
Salt Lake County recorded a total of 875,496 square feet of retail space under construction at the end of the first quarter of 2024, nearly double the 474,575 square feet recorded at the same time last year. Three projects exceed 100,000 square feet, including The Ranch in Bluffdale (at 210,000 square feet), Academy Village in Herriman (at 185,000 square feet) and Midas Crossing in Herriman (at 160,000 square feet)
Retail 24Q1 Salt Lake County Colliers | Salt Lake County| 24Q1 | Retail Report
1st Quarter Transactions Sale 10390 S State St Undisclosed 20K SF Sale 5116 Denali Park Dr SRS Real Estate Partners 11K SF Renewal 3217 S Decker Lake Dr Select Portfolio Servicing 157K SF Sale 112 E 12300 S Utah Community Federal Credit Union 4K SF Lease 7800 S Redwood Rd Fernandez Services 3K SF 7.24% 6.72% 5.46% 1.87% 78.71% Central East Central West North East North West South West 35.51% Preleased Direct Vacancy Rate 2.79% YOY FORECAST YTD Absorption -189K SF YOY FORECAST Under Construction 875K SF YOY FORECAST Lease Rate (NNN) $21.77/ SF YOY FORECAST 23Q1 23Q4 24Q1 Total Inventory (SF) 40,655,282 40,753,415 41,166,869 New Supply (SF) 0 17,856 0 YTD Absorption (SF) +188,677 +639,374 (188,790) Direct Vacancy 3.26% 2.28% 2.79% Sublease Vacancy 0.20% 0.10% 0.01% Total Vacancy 3.46% 2.38% 2.80% Under Construction (SF) 474,575 474,575 875,496 Overall Asking Lease Rates (NNN) $19.93 $21.21 $21.77
Top Construction Projects
Retail 24Q1
Avg. Asking Lease Rates
Average asking retail lease rates closed out the first quarter of 2024 at $21 21 NNN in Salt Lake County, a significant increase from the $19 93 NNN reported at the same time last year Increases will likely continue until supply catches up with demand and vacancy rates reach a more sustainable level. Neighborhood centers located in the Northeast submarket achieved the highest asking lease rates a premium attached to prime locations in this area The dynamic nature of the retail sector in Salt Lake County means certain submarkets command higher lease rates due to their strategic positioning and appeal to both retailers and consumers
Absorption
Salt Lake County saw 188,790 square feet of negative retail absorption in the first quarter of this year, a significant shift compared to the 188,677 square feet of positive absorption recorded in the first quarter of 2023 Community Centers accounted for 103,679 square feet of negative absorption, followed by Regional Centers at negative 76,923 square feet There were, however, several smaller new leases in the 1,000 to 3,500 square-foot range pockets of activity amid a slight downturn and fluctuating retail dynamics throughout Salt Lake County
Vacancy
Overall direct retail vacancy rates in Salt Lake County shifted to 2 79 percent at the end of the first quarter of 2024 a significant decrease from the 3 26 percent reported at the same time last year but a slight increase from the 2 29 percent recorded last quarter. This lack of space combined with rising construction costs leave retailers seeking space with limited options.
Salt
Colliers | Salt Lake County| 24Q1 | Retail Report
Lake County
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 2020 2021 2022 2023 2024 Anchorless Community Neighborhood Regional Overall (400,000) (200,000) 0 200,000 400,000 600,000 800,000 2020 2021 2022 2023 2024 0.00% 2.00% 4.00% 6.00% 8.00% 2020 2021 2022 2023 2024 Anchorless Community Neighborhood Regional Overall
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Center Type Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) RETAIL MARKET Central East Anchorless Strip 1,888,168 40,407 2.14% 0 0.00% 2.14% 8,094 8,094 $17.12 Community Center 1,659,686 17,945 1.08% 0 0.00% 1.08% 0 0 $28.91 Neighborhood Center 1,492,584 21,568 1.45% 0 0.00% 1.45% (6,755) (6,755) $23.80 Regional Center 2,156,305 57,669 2.67% 0 0.00% 2.67% (24,176) (24,176) $26.16 TOTAL 7,196,743 137,589 1.91% 0 0.00% 1.91% (22,837) (22,837) $23.59 Central West Anchorless Strip 1,414,735 16,954 1.20% 0 0.00% 1.20% (4,990) (4,990) $21.28 Community Center 3,615,901 63,315 1.75% 0 0.00% 1.75% (1,014) (1,014) $17.73 Neighborhood Center 1,460,139 70,082 4.80% 0 0.00% 4.80% (5,978) (5,978) $17.46 Regional Center 1,561,486 47,613 3.05% 0 0.00% 3.05% (1,145) (1,145) $20.00 TOTAL 8,052,261 197,964 2.46% 0 0.00% 2.46% (13,127) (13,127) $18.47 North East Anchorless Strip 2,085,277 95,191 4.56% 1,568 0.08% 4.64% (8,948) (8,948) $22.74 Community Center 2,128,302 98,100 4.61% 0 0.00% 4.61% (36,688) (36,688) $28.10 Neighborhood Center 336,405 36,331 10.80% 0 0.00% 10.80% (24,831) (24,831) $38.42 Regional Center 502,227 0 0.00% 0 0.00% 0.00% 4,782 4,782 $16.78 TOTAL 5,052,211 229,622 4.54% 1,568 0.03% 4.58% (65,685) (65,685) $26.78 North West Anchorless Strip 442,412 5,286 1.19% 0 0.00% 1.19% 0 0 $27.88 Community Center 869,682 16,628 1.91% 0 0.00% 1.91% (2,228) (2,228) $18.83 Neighborhood Center 539,213 0 0.00% 0 0.00% 0.00% 0 0Regional Center 0 0 0.00% 0 0.00% 0.00% 0 0TOTAL 1,851,307 21,914 1.18% 0 0.00% 1.18% (2,228) (2,228) $21.01
Market Overview
Overall Market Totals
Retail 24Q1 Salt Lake County Colliers | Salt Lake County| 24Q1 | Retail Report Market Overview
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Center Type Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) South East Anchorless Strip 1,426,393 33,909 2.38% 0 0.00% 2.38% 16,120 16,120 $31.38 Community Center 3,991,124 223,074 5.59% 0 0.00% 5.59% (50,468) (50,468) $17.15 Neighborhood Center 1,801,091 35,734 1.98% 2,781 0.15% 2.14% (6,460) (6,460) $18.69 Regional Center 804,319 15,429 1.92% 0 0.00% 1.92% (5,030) (5,030) $25.00 TOTAL 8,022,927 308,146 3.84% 2,781 0.03% 3.88% (45,838) (45,838) $19.28 South West Anchorless Strip 1,626,963 26,405 1.62% 0 0.00% 1.62% (1,291) (1,291) $23.34 Community Center 2,794,552 24,675 0.88% 0 0.00% 0.88% (13,281) (13,281) $25.91 Neighborhood Center 2,151,378 6,951 0.32% 0 0.00% 0.32% 26,851 26,851 $13.06 Regional Center 4,418,527 196,168 4.44% 0 0.00% 4.44% (51,354) (51,354) $23.59 TOTAL 10,991,420 254,199 2.31% 0 0.00% 2.31% (39,075) (39,075) $21.59 Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Center Type Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) Quarterly Totals Anchorless Strip 8,883,948 218,152 2.46% 1,568 0.02% 2.47% 8,985 8,985 $23.00 Community Center 15,059,247 443,737 2.95% 0 0.00% 2.95% (103,679) (103,679) $23.23 Neighborhood Center 7,780,810 170,666 2.19% 2,781 0.04% 2.23% (17,173) (17,173) $20.47 Regional Center 9,442,864 316,879 3.36% 0 0.00% 3.36% (76,923) (76,923) $23.06 TOTAL 41,166,869 1,149,434 2.79% 4,349 0.01% 2.80% (188,790) (188,790) $21.77
Market Activity
North West
Direct Vacancy Rate: 1.18%
YTD Absorption: (2,228) SF
Lease Rate: $21.10 NNN
Central West
Direct Vacancy Rate: 2.46%
YTD Absorption: (13,127) SF
Lease Rate: $18.47 NNN
North East
Direct Vacancy Rate: 4.54%
YTD Absorption: (65,685) SF
Lease Rate: $26.78 NNN
Central East
Direct Vacancy Rate: 1.91%
YTD Absorption: (22,837) SF
Lease Rate: $23.59 NNN
South West
Direct Vacancy Rate: 2.31%
YTD Absorption: (39,075) SF
Lease Rate: $21.59 NNN
South East
Direct Vacancy Rate: 3.84%
YTD Absorption: (45,838) SF
Lease Rate: $19.28 NNN
Office 24Q1 Suburban vs. Downtown Colliers | Suburban vs. Downtown | 24Q1 | Office Report Significant Sublease Availabilities Historic Comparison Current Market Indicators Lease Rates $30.03 $24.74 $18.59 $24.45 $35.33 $26.93 $21.91 $28.06 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 Class A Class B Class C Overall Suburban Downtown Overall Direct Vacancy Rate 17.34% YOY FORECAST YTD Absorption -219K SF YOY FORECAST Under Construction 627K SF YOY FORECAST Lease Rate (FSG) $27.34/ SF YOY FORECAST 23Q1 23Q4 24Q1 Total Inventory (SF) 41,803,977 42,673,391 42,670,514 New Supply (SF) 0 191,684 0 YTD Absorption (SF) (561,126) (1,085,596) (219,137) Direct Vacancy 14.21% 16.23% 17.34% Sublease Vacancy 4.94% 5.00% 4.83% Total Vacancy 19.14% 21.23% 22.17% Under Construction (SF) 626,552 218,552 238,552 Overall Asking Lease Rates (FSG) $26.18 $27.21 $27.34 BUILDING NAME SUBMARKET BUILDING SF SUBLEASE SF Towne Ridge Center I Sandy South Towne 128,086 128,086 Vista Station 6 Draper 127,420 124,860 The Pointe I Draper 109,244 106,758 Wingcrest Bldg 2 Airport/Intl Center 89,292 83,670 Sorenson Research 8 West Valley/Lake Park 81,184 81,184 Time Square 5 Interchange 79,474 79,474 SoJo Station 2 Sandy South Towne 179,019 76,736
1st Quarter Transactions
Sale 11747 S Lone Peak Pkwy Holiday Oil 84K SF
Transaction Date: 02/27/2024
Sale 5500 W Amelia Earhart Dr Quiktrip Corp 46K SF
Transaction Date: 03/19/2024
Lease 10355 S Jordan Gtwy Canopy Tax 31K SF
Transaction Date: 01/25/2024
Lease 95 S State St
Undisclosed 32K SF
Transaction Date: 01/13/2024
Sale 205 N 400 W WTRE Development 30K SF
Transaction Date: 01/25/2024
Office 24Q1 Suburban vs. Downtown Colliers | Suburban vs. Downtown | 24Q1 | Office Report Construction Vacancy Absorption Construction Asking Lease Rates $35.95 $31.73 $29.00 $30.00 $31.00 $32.00 $33.00 $34.00 $35.00 $36.00 $37.00 Downtown Suburban 91.62% 8.38% Suburban Downtown 56.59% Preleased (1,500,000) (1,000,000) (500,000) 0 500,000 1,000,000 2020 2021 2022 2023 2024 Suburban Downtown 0.00% 5.00% 10.00% 15.00% 20.00% 2020 2021 2022 2023 2024 Downtown Suburban
Top Construction Projects
Market Totals
Office 24Q1 Suburban vs. Downtown Colliers | Suburban vs. Downtown | 24Q1 | Office Report
Overall
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absoprtion Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET Suburban A 13,708,734 2,047,500 14.94% 1,135,811 8.29% 23.22% 28,768 28,768 $30.03 B 10,243,430 2,618,996 25.57% 614,019 5.99% 31.56% (181,685) (181,685) $24.74 C 5,695,936 324,616 5.70% 90,591 1.59% 7.29% (21,580) (21,580) $18.59 TOTAL 29,648,100 4,991,112 16.83% 1,840,421 6.21% 23.04% (174,497) (174,497) $24.45 Downtown A 5,179,451 723,854 13.98% 50,886 0.98% 14.96% (8,238) (8,238) $35.33 B 5,388,685 1,311,850 24.34% 118,212 2.19% 26.54% (40,768) (40,768) $26.93 C 2,454,278 371,655 15.14% 50,536 2.06% 17.20% 4,366 4,366 $21.91 TOTAL 13,022,414 2,407,359 18.49% 219,634 1.69% 20.17% (44,640) (44,640) $28.06 Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absoprtion Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET Quarterly Totals A 18,888,185 2,771,354 14.67% 1,186,697 6.28% 20.96% 20,530 20,530 $31.01 B 15,632,115 3,930,846 25.15% 732,231 4.68% 29.83% (222,453) (222,453) $25.78 C 8,150,214 696,271 8.54% 141,127 1.73% 10.27% (17,214) (17,214) $21.36 TOTAL 42,670,514 7,398,471 17.34% 2,060,055 4.83% 22.17% (219,137) (219,137) $27.34
Market Overview
Market Activity
Downtown
• Vacancy: 18.49%
• YTD Abs: (44,640) SF
• Lease Rate (FSG): $28.06
Suburban
• Vacancy: 16.83%
• YTD Abs: (174,497) SF
• Lease Rate (FSG): $24.45
Office 24Q1 Point of the Mountain Colliers | Point of the Mountain | 24Q1 | Office Report Significant Sublease Availabilities Historic Comparison Current Market Indicators Lease Rates $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 Class A Class B Class C Overall South Valley Utah County North Overall Direct Vacancy Rate 12.08% YOY FORECAST YTD Absorption -137K SF YOY FORECAST Under Construction 167K SF YOY FORECAST Lease Rate (FSG) $26.70/ SF YOY FORECAST 23Q1 23Q4 24Q1 Total Inventory (SF) 21,808,859 22,331,571 22,453,629 New Supply (SF) 0 130,000 0 YTD Absorption (SF) (31,8570 (234,575) (136,719) Direct Vacancy 8.10% 11.05% 12.08% Sublease Vacancy 8.51% 8.32% 9.18% Total Vacancy 16.61% 19.37% 21.26% Under Construction (SF) 500,583 166,552 166,552 Overall Asking Lease Rates (FSG) $25.84 $26.65 $26.70 BUILDING NAME SUBMARKET BUILDING SF SUBLEASE SF Grove Technology Center Utah County North 201,325 131,136 Towne Ridge Center I South Valley 128,086 128,086 Vista Station 6 South Valley 127,420 124,860 The Pointe I South Valley 109,244 106,758 Lehi Spectrum Bldg 2 Utah County North 125,000 96,764 Mountain Tech South Bldg 2 Utah County North 154,647 89,437 SoJo Station 2 South Valley 179,019 76,736
1st Quarter Transactions
Sale 11747 S Lone Peak Pkwy
Holiday Oil 84K SF
Transaction Date: 02/27/2024
Lease 10355 S Jordan Gtwy Canopy Tax 31K SF
Transaction Date: 01/25/2024
Sublease 1633 W Innovation Way
Lease End 30K SF
Transaction Date: 03/08/2024
Lease
734 E Utah Valley Dr Club Paddock 26K SF
Transaction Date: 03/28/2024
Lease 1800 S Novell Pl Rain Retail Software 24K SF
Transaction Date: 01/05/2024
Office 24Q1
Colliers | Point of the Mountain | 24Q1 | Office Report 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2020 2021 2022 2023 2024 Class A Class B Class C Overall Construction Vacancy Absorption Construction Asking Lease Rates 59.17% 40.83% South Valley Utah County North 80.02% Preleased (400,000) (200,000) 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 2020 2021 2022 2023 2024 Class A Class B Class C Overall $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 South Valley Utah County North Overall Under Construction Existing
Point of the Mountain
Top Construction Projects
Overall Market Totals
Office 24Q1 Point of the Mountain Colliers | Point of the Mountain | 24Q1 | Office Report
Market Overview
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET South Valley A 7,872,417 886,194 11.26% 942,694 11.97% 23.23% 35,410 35,410 $28.81 B 2,942,626 822,631 27.96% 130,139 4.42% 32.38% (154,465) (154,465) $25.81 C 666,172 68,759 10.32% 11,117 1.67% 11.99% 0 0 $20.17 TOTAL 11,481,215 1,777,584 15.48% 1,083,950 9.44% 24.92% (119,055) (119,055) $27.26 Utah County North A 7,826,318 522,198 6.67% 895,038 11.44% 18.11% (48,576) (48,576) $28.30 B 3,013,494 412,607 13.69% 81,183 2.69% 16.39% 28,772 28,772 $21.82 C 132,602 0 0.00% 0 0.00% 0.00% 2,140 2,140TOTAL 10,972,414 934,805 8.52% 976,221 8.90% 17.42% (17,664) (17,664) $25.59 Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET Quarterly Totals A 15,698,735 1,408,392 8.97% 1,837,732 11.71% 20.68% (13,166) (13,166) $28.78 B 5,956,120 1,235,238 20.74% 211,322 3.55% 24.29% (125,693) (125,693) $24.52 C 798,774 68,759 8.61% 11,117 1.39% 10.00% 2,140 2,140 $20.17 TOTAL 22,453,629 2,712,389 12.08% 2,060,171 9.18% 21.26% (136,719) (136,719) $26.70
Market Activity
South Valley
• Vacancy: 15.48%
• YTD Abs: (119,055) SF
• Lease Rate (FSG): $27.26
Utah County North
• Vacancy: 8.52%
• YTD Abs: (17,664) SF
• Lease Rate (FSG): $25.59
Headline
In the first quarter of 2024, Utah County's office market saw restrained construction activity, with only two medical office buildings under construction near the new Primary Children's Hospital in Lehi However, the overall asking lease rate remained stable, highest in the North quadrant due to its prime location and high-quality properties. Despite notable leasing activity, overall negative absorption points to a reduction in occupied office space, with direct vacancy reaching 11 58 percent a challenging increase for landlords
Market Indicators
Historic Comparison Construction
Utah County ended the first quarter of 2024 with just two office buildings under construction medical offices each less than 50,000 square feet in size near the new Primary Children's Hospital in Lehi Reaching a total of just 68,000 square feet, this limited construction activity highlights a cautious approach to development thanks to changing market conditions and economic factors.
Office 24Q1 Utah County Colliers | Utah County| 24Q1 | Office Report
Current
1st Quarter Transactions Sublease 1633 W Innovation Wy Lease End 30K SF Lease 734 E Utah Valley Dr Club Paddock 26K SF Sale 795 E State Rd M-Con Management 18K SF Lease 1800 S Novell Pl Rain Retail Software 24K SF Sublease 1599 N Technology Wy AD Medical Consulting 19K SF 100.00% North 85.70% Preleased Direct Vacancy Rate 11.58% YOY FORECAST YTD Absorption -9K SF YOY FORECAST Under Construction 68K SF YOY FORECAST Lease Rate (FSG) $24.30/ SF YOY FORECAST 23Q1 23Q4 24Q1 Total Inventory (SF) 18,664,258 18,852,133 19,009,254 New Supply (SF) 0 0 0 YTD Absorption (SF) (30,543) (128,825) (9,316) Direct Vacancy 9.55% 11.12% 11.58% Sublease Vacancy 5.60% 6.44% 6.19% Total Vacancy 15.15% 17.56% 17.77% Under Construction (SF) 222,031 68,000 68,000 Overall Asking Lease Rates (FSG) $23.78 $24.38 $24.30
Avg. Asking Lease Rates
The overall asking lease rate for office space in Utah County steadied at $24.30 full-service gross (FSG) during the first quarter of 2024 Class A properties in the North quadrant averaged the highest lease rates at $28.30 FSG, followed by Class B properties in the same quadrant at $21.82 FSG. Factors such as proximity to amenities, transportation hubs and desirable neighborhoods drive the premium rates attached to prime locations and high-quality office space in the North quadrant. Despite variations across property classes and quadrants, overall lease rates indicate a stable and competitive office market in Utah County
Absorption
The Utah County office market saw 9,316 square feet of negative absorption at the end of the first quarter a reduction in occupied office space compared to the end of 2023 The market did see an increase in leasing activity, with two significant transactions exceeding 25,000 square feet each: Club Paddock leased 25,898 square feet of space in American Fork and Rain Retail Software leased 24,491 square feet in Provo. However, the delivery of over 100,000 square feet of vacant space during the quarter contributed to overall negative absorption
Vacancy
Direct vacancy rates for office space in Utah County continued to rise in the first quarter of 2024, reaching 11.58 percent a 0.46 percent increase from last quarter and a substantial 2 03 percent increase from the same time last year. In contrast, sublease vacancy decreased by a slight 0 25 percent from the previous quarter for a combined vacancy rate of 17.77 percent countywide. This increasing supply of available office space that far outpaces current demand is exerting pressure on landlords, influencing leasing strategies in the quarters ahead.
0.00% 5.00% 10.00% 15.00% 2020 2021 2022 2023 2024 Class A Class B Class C Overall $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 2020 2021 2022 2023 2024 Class A Class B Class C Overall (400,000) (200,000) 0 200,000 400,000 600,000 800,000 1,000,000 2020 2021 2022 2023 2024 Class A Class B Class C Overall
Office 24Q1 Utah County Colliers | Utah County| 24Q1 | Office Report Sublease Availability Significant Sublease Availabilities Under Construction Asking Lease Rates 0 500,000 1,000,000 1,500,000 2020 2021 2022 2023 2024 Class A Class B Class C Overall $47.95 $47.95 $0.00 $20.00 $40.00 $60.00 North Overall North Overall BUILDING NAME SUBMARKET BUILDING SF SUBLEASE SF Grove Technology Center North 201,325 131,136 Lehi Spectrum Bldg 2 North 125,000 96,764 Mountain Tech South Bldg 2 North 154,647 89,437 Lindon Tech C North 51,526 51,526 Traverse Mountain Corp 3 & 4 North 200,000 50,170 Canyon Park Center K Central 119,258 126,541 Younique Office Building North 124,341 50,000
Top Construction Projects
Market Totals
Office 24Q1 Utah County Colliers | Utah County| 24Q1 | Office Report Market Overview Overall
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) OFFICE MARKET Central A 2,234,978 435,008 19.46% 32,102 1.44% 20.90% 7,173 7,173 $25.77 B 4,955,636 743,784 15.01% 167,998 3.39% 18.40% 541 541 $22.00 C 415,748 7,874 1.89% 0 0.00% 1.89% (1,874) (1,874) $20.54 TOTAL 7,606,362 1,186,666 15.60% 200,100 2.63% 18.23% 5,840 5,840 $23.44 North A 7,826,318 522,198 6.67% 895,038 11.44% 18.11% (48,576) (48,576) $28.30 B 3,013,494 412,607 13.69% 81,183 2.69% 16.39% 28,772 28,772 $21.82 C 132,602 0 0.00% 0 0.00% 0.00% 2,140 2,140TOTAL 10,972,414 934,805 8.52% 976,221 8.90% 17.42% (17,664) (17,664) $25.59 South A 84,160 79,817 94.84% 0 0.00% 94.84% 0 0 $21.50 B 170,835 0 0.00% 0 0.00% 0.00% 2,508 2,508C 110,790 0 0.00% 0 0.00% 0.00% 0 0TOTAL 365,785 79,817 21.82% 0 0.00% 21.82% 2,508 2,508 $21.50 West A 0 0 0.00% 0 0.00% 0.00% 0 0B 64,693 0 0.00% 0 0.00% 0.00% 0 0C 0 0 0.00% 0 0.00% 0.00% 0 0TOTAL 64,693 0 0.00% 0 0.00% 0.00% 0 0Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rent Building Class Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (FS) Quarterly Totals A 10,145,456 1,037,023 10.22% 927,140 9.14% 19.36% (41,403) (41,403) $26.77 B 8,204,658 1,156,391 14.09% 249,181 3.04% 17.13% 31,821 31,821 $21.94 C 659,140 7,874 1.19% 0 0.00% 1.19% 266 266 $20.54 TOTAL 19,009,254 2,201,288 11.58% 1,176,321 6.19% 17.77% (9,316) (9,316) $24.30
Market Activity
Utah County North Direct Vacancy Rate: 8.52% YTD Absorption: (17,664) SF Lease Rate: $25.59 FS
Utah County West
Direct Vacancy Rate: 0.00%
YTD Absorption: 0 SF
Lease Rate: $0.00 FS
Utah County Central Direct Vacancy Rate: 15.60% YTD Absorption: +5,840 SF Lease Rate: $23.44 FS
Utah County South
Absorption: +2,508 SF Lease Rate: $21.50 FS
YTD
Direct Vacancy Rate: 21.82%
Industrial 24Q1
Headline
Utah County's industrial landscape experienced robust construction activity in the first quarter of 2024. Facebook alone accounts for an impressive 2,000,000 of the 2,537,823 total square feet underway. Lease rates averaged $0.90 triple net (NNN), soaring to $1.07 NNN in the North quadrant due to high interest rates and low vacancy Steady leasing momentum and a few major transactions generated positive absorption of 359,079 square feet Although limited supply, especially of smaller spaces, brought the direct vacancy rate to a tight 4 21 percent, anticipated new construction should alleviate some of the demand pressure.
Current Market Indicators
Historic Comparison Construction
Utah County closed out the first quarter of 2024 with 2,537,823 square feet of industrial construction underway. Facebook's extension in Eagle Mountain accounted for a massive 2,000,000 square feet alone, bringing the amount of preleased space to just 19.98 percent of total construction. Preleasing across other industrial buildings has settled back to rates similar to what was seen in 2019 and 2020.
Colliers | Utah County| 24Q1 | Industrial Report
Utah County
1.62% 8.20% 90.18% Central North West 91.57% Preleased 23Q1 23Q4 24Q1 Total Inventory (SF) 45,470,830 47,739,976 48,753,946 New Supply (SF) 531,946 882,769 119,600 YTD Absorption (SF) +320,680 +1,718,544 +359,079 Direct Vacancy 2.57% 4.00% 4.21% Sublease Vacancy 0.43% 0.31% 0.32% Total Vacancy 3.00% 4.31% 4.53% Under Construction (SF) 4,180,040 2,251,623 2,217,823 Overall Asking Lease Rates (NNN) $0.89 $0.92 $0.90
YOY
YTD Absorption 359K SF YOY FORECAST Under Construction 2.2M SF YOY FORECAST Lease Rate (NNN) $0.90/ SF YOY FORECAST
Direct Vacancy Rate 4.21%
FORECAST
Avg. Asking Lease Rates
Industrial lease rates in Utah County varied last quarter, reaching an overall average asking rate of $0 90 NNN Rates were highest in the North quadrant, reaching $1.07 NNN. Lease rates are expected to remain relatively stable throughout the year. The focus will shift towards leasing out newly constructed spaces initially, followed by second-generation spaces catering to smaller-sized users Challenges persist for available options within the 5-40K SF range.
Absorption
During the first quarter of 2024, Utah County's resilient industrial market experienced a positive 359,079 square feet of absorption, nearly on par with the 320,680 square feet from the same time the previous year. Amazon leased over 168,000 square feet of space in American Fork, Revolutionary Walls secured 91,912 square feet in Lehi, and Burningham Trucking occupied 87,120 square feet in Lehi The graph might appear skewed because it reflects only the first quarter’s activity for this year, whereas the rest of the years are represented as year-to-date totals As absorption accumulates throughout the year, the graph will become more comparable and reflective of overall trends
Vacancy
The overall direct vacancy rate for industrial space in Utah County reached 4.21 percent at the end of the first quarter, a marked increase of 1 64 percent from the same time last year However, the vacancy rate still falls short of optimal market health due to a scarcity of smaller spaces vacancy in industrial space at or below 20,000 square feet lingers below 0 1 percent The quest for the perfect location persists among tenants, underscoring the ongoing need for new construction However, limited options remain available in smaller-sized spaces for the time being.
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
2020 2021 2022 2023 2024 0-5K SF 5-20K SF 20-50K SF 50-100K SF 100K+ SF Overall (500,000) 0 500,000
2020 2021 2022 2023 2024 0-5K SF 5-20K SF 20-50K SF 50-100K SF 100K+ SF Overall 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2020 2021 2022 2023 2024 0-5K SF 5-20K SF 20-50K SF 50-100K SF 100K+ SF Overall
1,000,000 1,500,000 2,000,000
Sale
151 E 3450 N
Boyer SF View Industrial
267K SF
Transaction Date: 01/02/2024
Sale
1206 S 1680 W
Integra CRE 267K SF
Transaction Date: 01/03/2024
Lease
455 S 600 E
Revolutionary Walls
92K SF
Transaction Date: 01/29/2024
Sale
225 E 900 S
Undisclosed 166K SF
Transaction Date: 02/01/2024
Lease
455 S 600 E
Burningham Trucking
87K SF
Transaction Date: 03/01/2024
Colliers | Utah County| 24Q1 | Industrial Report
Industrial 24Q1 Utah County
1st Quarter Transactions
Top Construction Projects
Market Overview
Overall Market Totals
Utah County Colliers | Utah County| 24Q1 | Industrial Report
Industrial 24Q1
Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Building Size Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) INDUSTRIAL MARKET Central 0-5,000 238,959 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 2,941,914 32,352 1.10% 6,500 0.22% 1.32% 10,674 10,674 $1.09 20,001-50,000 4,793,626 10,218 0.21% 22,416 0.47% 0.68% 2,400 2,400 $0.95 50,001-100,000 2,930,038 85,600 2.92% 0 0.00% 2.92% 0 0 $0.80 100,001+ 3,518,716 88,156 2.51% 0 0.00% 2.51% 0 0 $0.88 TOTAL 14,423,253 216,326 1.50% 28,916 0.20% 1.70% 13,074 13,074 $0.89 North 0-5,000 51,543 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 1,824,766 19,815 1.09% 0 0.00% 1.09% 0 0 $1.38 20,001-50,000 3,943,521 61,736 1.57% 0 0.00% 1.57% 33,701 33,701 $1.26 50,001-100,000 4,432,711 115,024 2.59% 16,496 0.37% 2.97% 57,874 57,874 $1.07 100,001+ 5,864,031 171,479 2.92% 0 0.00% 2.92% 168,291 168,291 $0.97 TOTAL 16,116,572 368,054 2.28% 16,496 0.10% 2.39% 259,866 259,866 $1.07 South 0-5,000 41,615 0 0.00% 6,008 14.44% 14.44% 0 05,001-20,000 1,429,505 2,400 0.17% 1,068 0.07% 0.24% (2,400) (2,400) $0.94 20,001-50,000 2,789,257 153,891 5.52% 17,256 0.62% 6.14% 35,698 35,698 $1.08 50,001-100,000 2,000,482 130,022 6.50% 0 0.00% 6.50% (3,583) (3,583) $0.96 100,001+ 10,520,632 1,182,231 11.24% 84,860 0.81% 12.04% 56,424 56,424 $0.83 TOTAL 16,781,491 1,468,544 8.75% 109,192 0.65% 9.40% 86,139 86,139 $0.87 West 0-5,000 3,984 0 0.00% 0 0.00% 0.00% 0 05,001-20,000 30,919 0 0.00% 0 0.00% 0.00% 0 020,001-50,000 27,727 0 0.00% 0 0.00% 0.00% 0 050,001-100,000 0 0 0.00% 0 0.00% 0.00% 0 0100,001+ 1,370,000 0 0.00% 0 0.00% 0.00% 0 0TOTAL 1,432,630 0 0.00% 0 0.00% 0.00% 0 0Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Building Size Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) Quarterly Totals 0-5,000 336,101 0 0.00% 6,008 1.79% 1.79% 0 0 $1.10 5,001-20,000 6,227,104 54,567 0.88% 7,568 0.12% 1.00% 8,274 8,274 $1.11 20,001-50,000 11,554,131 225,845 1.95% 39,672 0.34% 2.30% 71,799 71,799 $1.05 50,001-100,000 9,363,231 330,646 3.53% 16,496 0.18% 3.71% 54,291 54,291 $0.88 100,001+ 21,273,379 1,441,866 6.78% 84,860 0.40% 7.18% 224,715 224,715 $0.83 TOTAL 48,753,946 2,052,924 4.21% 154,604 0.32% 4.53% 359,079 359,079 $0.90
Market Activity
Utah County North
Direct Vacancy Rate: 2.28%
YTD Absorption: +259,866 SF
Lease Rate: $1.07 NNN
Utah County West
Direct Vacancy Rate: 0.00%
YTD Absorption: 0 SF
Lease Rate: $0.00 NNN
Utah County Central
Direct Vacancy Rate: 1.50%
YTD Absorption: +13,074 SF
Lease Rate: $0.89 NNN
Utah County South
Direct Vacancy Rate: 8.75% YTD Absorption: +86,139 SF Lease Rate: $0.87 NNN
Headline
Utah County experienced an increase in retail construction, ending the first quarter with 188,371 square feet of space underway, particularly in Saratoga Springs. Average lease rates surged to $25 55 NNN thanks to rising construction costs. Despite 36,620 square feet of negative absorption, American Freight’s 24,000-square-foot lease in Orem provided some activity Vacancy rates increased slightly, highest in the Central Quadrant.
Current Market Indicators
Historic Comparison Construction
Retail construction in Utah County gradually increased to 188,371 square feet underway by the end of the first quarter of 2024, a slight increase from the 116,845 square feet reported at the same time last year The West Quadrant recorded the highest levels of construction, particularly Saratoga Springs. Several projects projected to start construction in 2024 should boost market inventory and alleviate the strain of low vacancy.
24Q1 Utah
Colliers | Utah County| 24Q1 | Retail Report
Retail
County
4.66% 5.13% 7.71% 82.50% Central North South West 0.78% Preleased Direct Vacancy Rate 2.87% YOY FORECAST YTD Absorption -37K SF YOY FORECAST Under Construction 155K SF YOY FORECAST Lease Rate (NNN) $25.55/ SF YOY FORECAST 23Q1 23Q4 24Q1 Total Inventory (SF) 17,450,274 17,536,259 17,417,603 New Supply (SF) 0 0 0 YTD Absorption (SF) +20,008 +173,488 (36,620) Direct Vacancy 2.95% 2.39% 2.87% Sublease Vacancy 0.10% 0.01% 0.02% Total Vacancy 3.05% 2.40% 2.89% Under Construction (SF) 116,845 196,086 155,412 Overall Asking Lease Rates (NNN) $23.29 $24.67 $25.55
1st Quarter Transactions
Sale
135 E Main St
Macy’s 42K SF
Transaction Date: 01/15/2024
Sale 592 E Kirby Ln
F&S Investments 36K SF
Transaction Date: 02/16/2024
Lease
70 S State St
American Freight 24K SF
Transaction Date: 01/11/2024
Sale
374 N State St
Hafen Investments 16K SF
Transaction Date: 02/16/2024
Sale 545 S 100 e
545 S RLC 6K SF
Transaction Date: 02/14/2024
Utah County
Retail 24Q1
Avg. Asking Lease Rates
Average asking lease rates for retail space in Utah County reached $25 55 triple net (NNN) by the close of the first quarter of 2024 a notable increase compared to $24.67 NNN last quarter or $23 39 NNN at the same time last year Escalating material costs necessitate higher rates for new construction projects to be financially viable As construction expenses continue to climb, expect lease rates to rise, reflecting the ongoing challenges faced by the retail sector
Absorption
Utah County recorded negative 36,620 square feet of retail absorption at the end of the first quarter of this year, mostly felt by Neighborhood Centers within the South Quadrant due to the vacancy of the former Allen's Market Various transactions in the 1,000 to 4,500-square-foot range couldn't offset the added space, resulting in overall negative absorption However, American Freight’s 24,000-square-foot lease in Orem provided a glimmer of activity amid a mellow absorption landscape.
Vacancy
The direct retail vacancy rate reached 2.87 percent at the end of the first quarter in Utah County, a marked 0.48 percent increase from the previous quarter but a slight decrease of 0.08 percent from the same time last year. The Central Quadrant reported the highest rate at 3.97 percent, closely followed by the South quadrant at 3.45 percent, as vacancy distributed almost evenly across all quadrants Localized market dynamics within each region can account for higher rates in the Central and South Quadrants.
Colliers | Utah County| 24Q1 | Retail Report
$0.00 $10.00 $20.00 $30.00 $40.00 2020 2021 2022 2023 2024 Anchorless Community Neighborhood Regional Overall (100,000) 0 100,000 200,000 300,000 400,000 500,000 600,000 2020 2021 2022 2023 2024 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2020 2021 2022 2023 2024 Anchorless Community Neighborhood Regional Overall
Top Construction Projects
Retail 24Q1 Utah County Colliers | Utah County| 24Q1 | Retail Report Market Overview Overall Market Totals Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Center Type Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) RETAIL MARKET Central Anchorless Strip 2,367,812 32,654 1.38% 0 0.00% 1.38% (9,249) (9,249) $19.86 Community Center 3,157,922 202,961 6.43% 0 0.00% 6.43% 22,595 22,595 $19.96 Neighborhood Center 1,789,281 42,090 2.35% 0 0.00% 2.35% 22,497 22,497 $24.15 Regional Center 231,042 22,000 9.52% 0 0.00% 9.52% 0 0 $36.00 TOTAL 7,546,057 299,705 3.97% 0 0.00% 3.97% 35,843 35,843 $22.40 North Anchorless Strip 1,003,197 12,271 1.22% 0 0.00% 1.22% (2,350) (2,350) $21.22 Community Center 1,995,959 20,572 1.03% 0 0.00% 1.03% 12,100 12,100 $25.56 Neighborhood Center 1,727,805 25,600 1.48% 2,859 0.17% 1.65% 0 0 $31.30 Regional Center 665,430 4,058 0.61% 0 0.00% 0.61% 10,649 10,649 $14.42 TOTAL 5,392,391 62,501 1.16% 2,859 0.05% 1.21% 20,399 20,399 $24.54 South Anchorless Strip 746,761 0 0.00% 0 0.00% 0.00% 0 0Community Center 1,209,042 19,000 1.57% 0 0.00% 1.57% (13,000) (13,000) $32.00 Neighborhood Center 534,887 72,148 13.49% 0 0.00% 13.49% (72,148) (72,148) $27.26 Regional Center 734,943 20,000 2.72% 0 0.00% 2.72% 0 0 $40.00 TOTAL 3,225,633 111,148 3.45% 0 0.00% 3.45% (85,148) (85,148) $30.31 West Anchorless Strip 282,895 11,940 4.22% 0 0.00% 4.22% 0 0 $38.00 Community Center 769,640 15,392 2.00% 0 0.00% 2.00% (7,714) (7,714) $38.39 Neighborhood Center 200,987 0 0.00% 0 0.00% 0.00% 0 0Regional Center 0 0 0.00% 0 0.00% 0.00% 0 0TOTAL 1,253,522 27,332 2.18% 0 0.00% 2.18% (7,714) (7,714) $38.22 Existing Properties Direct Vacancy Sublease Availability Total Vacancy Absorption Square Footage Avg Asking Rate Center Type Total Inventory SF SF Rate SF Rate Rate Current Period YTD Rate (NNN) Quarterly Totals Anchorless Strip 4,400,665 56,865 1.29% 0 0.00% 1.29% (11,599) (11,599) $23.83 Community Center 7,132,563 257,925 3.62% 0 0.00% 3.62% 13,981 13,981 $23.77 Neighborhood Center 4,252,960 139,838 3.29% 2,859 0.07% 3.36% (49,651) (49,651) $27.07 Regional Center 1,631,415 46,058 2.82% 0 0.00% 2.82% 10,649 10,649 $30.65 TOTAL 17,417,603 500,686 2.87% 2,859 0.02% 2.89% (36,620) (36,620) $25.55
Market Activity
Utah County North Vacancy Rate: 1.16% YTD Absorption: +20,399 SF Lease Rate: $24.54 NNN
Utah County Central Vacancy Rate: 3.97% YTD Absorption: +35,843 SF Lease Rate: $22.40 NNN
Utah County West
Vacancy Rate: 2.18%
YTD Absorption: (7,714) SF
Lease Rate: $38.22 NNN
Utah County South Vacancy Rate: 3.45%
YTD Absorption: (85,148) SF Lease Rate: $30.31 NNN
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