WESTERN SNAPSHOT, NOVEMBER 2004

Salt Lake City Industrial Market

Farmer

The Salt Lake City industrial market is seeing a move to build more big box distribution space, says Mike Farmer, industrial specialist for Commerce CRG in Salt Lake City. “The construction business in general has been slow to non-existent in building big box [space] for the last 3 years,” he says. “Now it is coming back. Class A distribution space has been slowly absorbed over that span of time and now there is little to be leased. Next year there will be several projects exceeding 100,000 square feet.” Farmer adds that land sales in the market have increased to accommodate such development.

Two new large industrial parks are under development at this time — the 700-acre Westport Park at 5600 West and I-80 and the 400-acre Ninigret Technology Park at 4000 West and California Avenue. Forest City Development and Randy Abood are the developers, respectively. Farmer says that the Westport’s design will cater to large users requiring 25 acres or more while Ninigret will accommodate tenants needing 5 acres or more of industrial space. “Westport is targeting third-party logistics companies distributing over a large area,” he says. Abood’s project follows the 180-acre first phase of Ninigret Park.

Farmer says that the Salt Lake market is best suited for distribution tenants, followed by manufacturing firms due to the available labor, utilities and transportation options. The majority of Salt Lake City’s industrial development is taking place in the northwest quadrant of the city. “This area has no residential development and its boundaries are freeways and major traffic arteries,” says Farmer, calling the north Salt Lake submarket the one to watch because of its employee base and excellent access to the interstate highway system. “This allows easy ingress/egress of both employees and goods.”

Salt Lake County’s overall industrial vacancy rate is around 9.5 percent. Rental rates range from $0.25 per square foot per month to $0.29 cents per square foot per month NNN on properties 50,000 square feet or larger.

Hamilton Partners is new to Salt Lake City’s industrial scene and will be developing multiple products for 2005 delivery. There is no single major industrial tenant absorbing a majority of space in the market. Several major leases have been signed at 2500 South 3200 West including 80,000 square feet by Owens & Minor, 80,000 square feet by Huish Detergents and 200,000 square feet by O.C. Tanner Co. At Ninigret Park, In-Line Plastics leased 80,000 square feet and Malt-O-Meal Company expanded by 156,000 square feet.

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