— By Mike Embree of Drawbridge Realty —
After 16 consecutive quarters of either negative or negligible net absorption, Salt Lake City’s office market closed 2025 on a positive note. The end result was 114,700 square feet of direct occupancy gains, per Cushman & Wakefield. This resulted in 263,000 square feet of direct absorption for the year, spurring a 500-basis point decline in the direct vacancy rate, which now stands at 19.4 percent.
It’s too early to say that the market has turned the corner, but the signs are promising.
For landlords, one positive in a market with about 10 million square feet of availability is that new office construction has effectively stalled for now. Only one building was delivered in 2025, adding just 180,000 square feet to the existing inventory with no new office projects on the drawing board.
At the same time, more than a dozen buildings were removed from the office leasing market, either by developers pursuing multifamily conversions or purchases by owner-users. One such sale occurred in the fourth quarter when the Salt Lake City Corporation of Public Utilities purchased One Airport Tech, a two-story, 87,657-square-foot building near Airport Technology Park campus.
C&W data notes average asking rents are up by almost a full percentage point year over year, while tenant demand is expected to continue to grow.
One important factor facing the market’s potential rebound is that, despite the high vacancy rate, there’s limited availability of top-tier quality space in the broader market. This is tempting many large tenants in Class A buildings to renew or expand their leases. It’s also requiring landlords to add or improve hospitality-style amenities, such as outdoor patios, comfortable lounges and fitness facilities, to attract and retain tenants.
The region is also set to receive the fourth and final phase of Salt Lake City International Airport’s $5.1 billion expansion project, which will be completed in October. The expansion will add a new terminal, parking, concourses with 94 gates (including six international gates) and six more retail spaces. This will transform a 1960s-era facility into a modern airport hub capable of efficiently handling 34 million passengers a year. The estimated economic impact is more than $5.5 billion.
Salt Lake’s expanding professional sports presence, including the likely addition of a Major League Baseball franchise alongside its NBA, Major League Soccer and NHL teams, only strengthens the region’s long-term ability to attract businesses and support sustained office demand.
— By Mike Embree, Chief Portfolio Officer, Drawbridge Realty. This article was originally published in the March 2026 issue of Western Real Estate Business.