Salt Lake City Retail: Strong and Getting Stronger
Retail business continues to be solid in greater Salt Lake City. Total net absorption in all retail categories doubled, when compared to 2012. High-end retail in regional centers saw a 20 percent increase in rents to $24.50 per square foot. Retail inventory increased to a little more than 1 million square feet in 2013 as well.
Significant growth areas include new retail in the eclectic Sugarhouse area, the southwest portion of Salt Lake County and the 5600 West corridor. New development also took place in the Central Business District of Salt Lake City. Shadow retail near the new City Creek Mall is fostering some of the Central Business District activity as well. Utah’s excellent light and commuter rails have spurred retail and commercial developments alongside their routes through four counties. Examples include a redevelopment project at Fairbourne Station in West Valley City and the expansion of Vista Station in Salt Lake County. Vista Station is a mixed-use development that is anchored by eBay.
Many grocery tenants also have expansion plans for 2014 and 2015. WinCo, Harmon’s, WalMart Neighborhood Grocery, Whole Foods, Sprouts and others all either have plans or are underway with new projects. Large and mid-box retailers are very active in the market as well. Costco, Dick’s Sporting Goods, TJ Maxx, Ross Dress for Less, Herberger’s Department Stores, Gold’s Gym, Marshalls, Gordmans and various theater chains are a few of those tenants.
Salt Lake City is also enjoying an influx of new retail tenants. Dunkin’ Donuts, Dog Haus, Mooyah Burgers, Hu Hot Mongolian Grill, Freebirds World Burritos, CVS Pharmacy, Allen Edmonds Shoe, Shoe Dept. by Encore, H&M, Trader Joes and Jersey Mikes are some of the retailers that entered the market last year.
Infill in many centers that have suffered large- and mid-box vacancies has hit full stride in leasing up their challenging spots. Tenants like Savers, Whole Foods, Deseret Industries, CVC Pharmacy, Gold’s Gym, various theaters and others have helped significantly reduce retail vacancy in the area.
Retailers and developers in Salt Lake City, as in other cities, are fighting to regain their lost market share to online retailers. They are updating to attractive designs and colors, and adding tenant upgrades that bring in major traffic generators like Apple and H&M. Many have also found that adding entertainment components has successfully increased business.
Nationwide, entertainment has become a critical portion of any larger development, and Salt Lake City is no exception. In the past few years, several new developments in Salt Lake City started with their theaters, which were open long before the rest of the center was complete.
Overall, Utah’s business climate ranks highest in the nation and continues to have a very positive effect on retail in the market.
By Steven Bogden, Director Strategic Planning, Coldwell Banker Commercial Intermountain. This article original appeared in the March 2014 issue of Western Real Estate Business magazine.