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National retailers have slowed their progress into the market now that City Creek and Fashion Place Mall have completed the majority of their renovations. The discount segment continues to expand in infill locations along the Wasatch Front. Ross, TJ Maxx and Marshalls continue to lead the charge in this category, with Rue 21 and Dress Barn as the larger tenants.
Rural areas are the new frontier within the State of Utah. Many small communities are riding the wave of the energy boom, from natural gas, oil and wind power. These smaller towns are growing at a rapid pace, and with the influx of expendable income, retailers are flocking to these areas. The challenge that many developers face in these towns, however, is the lower rent numbers that national tenants can afford due to the immediate lack of population within the trade areas. Ross, JoAnn Fabrics, Petco, Sportsman’s Warehouse, Sports Authority, Rue 21 and Dress Barn are the retailers that lead the charge in these areas.
The grocery sector continues its movement within the state, with Walmart’s Neighborhood Market, Sprouts and Smith’s being the most active. Smith’s is in the process of remodeling many of its existing locations and is looking at three to five new sites in Utah. Many of these will be completed by next year. Walmart’s plans are vague, but the company is exploring opportunities to expand the Neighborhood Market brand across the state. Sprouts is also looking to expand its brand within the state. The company has been exploring opportunities to make its brand more commonly known within Utah since it took over the state’s two Sunflower Market locations. There are also rumors that Trader Joe’s might be looking at additional sites within the market that will add to their current operating store.
CVS and Walgreens continue their expansions as well. Walgreens has closed on at least one site and is in the process of identifying additional locations. CVS will be closing on its first wave of deals in the coming year.
Housing construction has picked up substantially over the past six months and continues to grow stronger as the year progresses. Most of the new homes currently under construction are priced in the $250,000 to $300,000 range. Multifamily has also been on the rise over the same time period, during which it has also created an increase in the Wasatch Front land values. The competition is fierce as many companies are buying as quickly as they can in order to capitalize on this current wave of activity.
Utah has been ranked the No. 1 “Place to Do Business” by Forbes magazine for the past three consecutive years. The state is active in offering incentives to bring new businesses into Utah. Combine this with a young, highly educated workforce (with a current median age of 26.3), a low cost of living and a high number of outdoor activities, and Utah has become a beacon for companies to expand their base and add headquarter operations. Goldman Sachs and Adobe are just a few of the companies that have decided to capitalize on this state in the past few years.
— Nick Clark, retail specialist with Cushman Wakefield | Commerce