— By Jarrod Hunt of Colliers —
Utah’s industrial real estate market continues to show resilience in 2025, supported by healthy tenant demand and an evolving mix of warehouse, flex and manufacturing product types. Leasing activity remains particularly strong in the 20,000- to 50,000-square-foot range, with a steady stream of local fulfillment and light manufacturing tenants driving mid-sized requirements across the Wasatch Front.
Product Type and Demand Trends
With enhanced industrial tracking now focused by building type, warehouse space stands out as the most active, though flex and light manufacturing buildings are seeing targeted interest. Mid-sized tenants seeking efficient, modern, move-in-ready space continue to account for most lease activity, favoring locations with convenient access to transportation corridors and workforce hubs.
South Market Poised for a Breakout Year
The South Utah County market is positioned for another active year, with a wave of new deliveries and groundbreakings happening this year. The Ritchie Group’s Global Logistics Center near the Spanish Fork Airport is the region’s largest project. It will feature 13 planned buildings comprising 3.3 million square feet, and early leasing interest is encouraging. While the Central market has led to early year absorption, momentum in the South is expected to build quickly as new space is absorbed.
Submarket Momentum and Expansion Corridors
The North County submarket remains a hotbed of activity due to its proximity to Silicon Slopes and tech-centric demographics. However, it is plagued with very limited land availability for industrial product. Saratoga Springs is gaining attention thanks to explosive nearby residential growth and infrastructure improvements. Meanwhile, West Utah County continues to see emerging demand from companies drawn by affordable land availability and strategic distribution access. These shifts illustrate how industrial growth is diversifying beyond Salt Lake City’s traditional core.
Local Tenant Growth and Leasing Activity
Local manufacturing companies like eSupplements and the Candy Co. continue to expand their operations, contributing to overall market strength, job growth and manufacturing investment. Fulfillment, distribution and manufacturing users are particularly active in securing space with functional layouts and cost-effective solutions for their space needs.
Vacancy, Rental Rates, Landlord Strategies
Direct vacancy stands just above 4 percent, with overall vacancy close to 5 percent. This reflects a market that still leans in favor of landlords. Asking rates for quality industrial space average between $0.95 and $1.00 per square foot on a triple-net basis.
Some landlords are offering modest rent abatement concessions, while tenant improvement allowances are present in most transactions. They typically range from $10 to $15 per square foot for small and mid-bay first-generation space with about half that amount for larger footprint distribution deals. The concession packages are quite different on second-generation space (as one would expect).
Investment Activity
Investor interest remains strong, particularly in Utah County, where assets with lease-up or value-added potential continue to attract attention. We are now seeing the merging of ask/offer gaps that nearly stopped all investment deals in 2023 as parties’ expectations leveled off.
Development Outlook
While speculative construction has slowed, more than 3.3 million square feet remain under development. Much of this space is expected to lease up in the coming months, supporting absorption levels similar to those recorded at the end of 2024.
Utah’s industrial market is well-positioned for continued growth in 2025 and beyond with in-state population growth and continued migration of companies to workforce and tax-competitive states. With expanding submarkets, strong tenant demand, and disciplined development, the region remains one of the West’s most resilient and attractive industrial hubs for investment.
— By Jarrod Hunt, Vice Chair of Colliers. This article was originally published in the March 2025 issue of Western Real Estate Business.