What area is your expertise?
Salt Lake Valley, Utah
What trends do you see presently in industrial development in your area?
Large flex office, warehouse and light industrial centers are planned for the northwest quadrant of the Salt Lake Valley near the new Pacific Railroad’s Salt Lake City Intermodal hub at Highway 201 and Bangerter Highway.
What type of industrial product is doing well in your area?
With vacancy less than 5 percent, all industrial products are doing will. First generation product landlords will continue to push for increasing rates of $.55+ psf/mo/nnn (warehouse) and $1.00+ psf/mo/nnn (office). Second generation industrial buildings remain occupied with some softening of lease rates.
Who are the active industrial developers in your area?
Argent Group, Roderick Enterprises, and Rockefeller Group Development Co,
Please name one or two significant industrial developments in your area. What impact will these projects have on the market?
Two developments are planned to be constructed at Bangerter Highway and Highway 201. When completed, The Commerce Center, developed by The Argent Group, will add 1.8 million square rentable square feet. The Rockefeller Group will increase available space by 930,000 rentable square feet.
Where is the majority of development taking place? Why is this area doing well?
Much of the development is occurring in the northwest quadrant of the Salt Lake Valley because that is where the available land for development is, tenants desire to be near the Intermodal Hub and the northwest quadrant has excellent freeway access.
What area do you expect to be the next big industrial development market? Why?
The northwest quadrant will continue to be the big industrial development market for distribution product. The Pacific Railroad Salt Lake City Intermodal Hub is the first point of intersection in Union Pacific’s rail system for the eastbound freight from the three largest West Coast ports of Los Angeles/Long Beach, Seattle/Tacoma and Oakland.
Please describe the industrial leasing activity in your area.
Leasing activity has softened along with second-generation lease rates. Well-located first generation space lease transactions have done well.
Please describe the industrial sales activity in your area.
Owner/user buyer demand remains strong but is hindered by very limited supply.
Please give a measure of industrial vacancy rates and a measure of available sublease space.
In general, the vacancy rate in Salt Lake County remains below 5 percent.
What impact do current interest rates have on the industrial market? What predictions do you have for interest rates and their effect on the industrial market in the next year?
For developments, we are starting to see developers walk away from projects forfeiting substantial deposit because of rising interest. Owner/users face more qualifying challenges and are faced with purchasing smaller facilities.
What industries do you expect to expand in the next year to absorb a great deal of industrial space? What areas will be affected?
Distribution will be the leader in expansion. Manufacturing will continue to do well as long as the Utah economy, the number one in the county, continues to produce jobs.
Would you like to make any additional observations about the industrial market in your area?
It appears the first quarter sales and leasing was down for leasing and sales transactions.
Submitted by Randy Ross, CCIM, senior associate with the Salt Lake City office of CBC NRT/ONCOR International. Posted 09-15-08.