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After record success in 2015, the commercial real estate market in Utah has continued to enjoy success during the first quarter of 2016.
The state’s real estate’s retail sector is doing well as asking rates on shopping spaces — fueled by demand from home-grown and national chains of retailers, grocers and restaurants seeking to expand — are at an all-time high. Improvements are also underway at several regional shopping centers and malls in Riverton, Spanish Fork and Lehi.
Additionally, brick-and-mortar shopping outlets continue to perform well despite expanding e-commerce. The success of the retail commercial space has also increased the success of industrial buildings as a large number of them are devoted to order-fulfillment, warehousing and distribution.
At the same time, millions of square feet of new office space are also going up in Utah, fueled by job growth and large employers relocating to the state. Key hot spots — downtown Salt Lake City, southwest Salt Lake County and the so-called Silicon Slopes along the Salt Lake-Utah County border — are rapidly developing.
Meanwhile, lease rates for high-end offices, recently topped $30 per square foot for the first time in some locations, including Salt Lake City’s downtown business core.
For those looking to invest in commercial real estate or expand and diversify their financial portfolio, the current market trends should be encouraging. One of the strongest and most persuasive reasons to invest in commercial real estate over residential rentals is the earning potential. Commercial properties generally have an annual return off the purchase price between 6% and 12%, depending on the area; compared to the typical range of 1% to 4% for single-family home properties.
If your or your company are looking to expand in or enter the Utah market and need to lease or purchase commercial retail, office or industrial space, contact me today for expert advice and access to some of the hottest listings along the Wasatch Front.
Chris Falk is a Certified Commercial Investment Member (CCIM)—one of the most comprehensive commercial real estate designations, held by an estimated 6% of commercial brokers nationally. As a commercial real estate broker, Chris has handled over 600 transactions exceeding $475MM. Born and raised in Utah, Chris understands the unique qualities of the region and the great capacity for business opportunities in Northern Utah, including Davis, Weber and Salt Lake Counties. Chris is the premier, go-to agent for businesses and developers interested in this dynamic area.
