FEATURE ARTICLE, MARCH 2006

A Taste of Salt Lake Real Estate

The biggest market in the Beehive State is all abuzz with commercial real estate activity. Western Real Estate Business contacted Commerce CRG for highlights of the Salt Lake City market:

“On the industrial front, the most active is the large distribution sector. Natomas Creek has one building of 348,000 square feet nearing completion and building permits for another 1,500,000 square feet starting in the second quarter of this year. Natomas Creek purchased seven buildings from Ninigret Park, totaling over 1 million square feet.”

“A new trend is the manufacturing [firms] coming into the Salt Lake Valley. Kraftmaid is building more then 750,000 square feet to manufacture kitchen cabinets.”

— Mike Farmer, Industrial Specialist

“Absorption of office space in 2005 was 1.5 million square feet, more than what was absorbed for 2002 through 2004 combined. Total vacancies have dropped by 6 percentage points in the past 12 months to 11.35 percent.”

— Rich Nordlund, Office Specialist  

“Salt Lake County was a ‘darling' for out-of-state real estate investors last year, and it isn't expected to change in 2006. Investments in Salt Lake County real estate blew the doors off in 2005, by an astonishing 235 percent, exceeding 1.5 billion last year. Our cap rates and returns are the most attractive in the West.”

— Kip Paul, Investment Specialist

• example: Chattanooga, Tennessee-based CBL & Associates Properties' fourth quarter 2005 acquisition of Layton Hills Mall for $121.4 million

Chad Moore, retail specialist for Commerce CRG, cited the following Salt Lake area market activity:

• the last two phases (600,000 square feet) of Foursquare Properties' Jordan Landing project nearing completion

• the Quarry Bend project — a 100-acre mixed-use development featuring 400,000 square feet of retail space

• another 400,000 square feet of retail at the Costco-anchored project in American Fork, Utah

• IKEA's announcement that it will open a store in the Salt Lake Valley and MediaPlay's exit from Utah

also:

• Westwood Development Group's announcement that it will develop a 1 million-square-foot lifestyle center called Sundance Commons in Pleasant Grove, Utah

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