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A well-diversified economy with rapidly growing tech and financial service sectors, Salt Lake City is continuing to enjoy the healthy demand growth its seen over the past few years. Rent growth has slowed substantially over the past several years from the strong gains seen in 2016 and posting moderate gains. Developers continue to target the metro's southeast, which is undergoing substantial economic and population growth, and seeing major office-using employment gains from the tech sector. On top of over a million SF that has delivered in Sandy or Draper since 2014, over 700,000 SF combined is currently underway in the two submarkets, representing over two-thirds of the metrowide pipeline. While the largest projects underway metrowide are built-to-suits, most of what is underway is speculative.  

QUARTER:  FIRST 2019
NET ABSORPTION:  1,900,000 SF
VACANCY RATE:  6.4%
AVERAGE RENTAL RATES:  $22.27/SF

The Salt Lake City metro continues to see healthy job and population growth, but despite the area's solid demographic and economic gains, the retail market is still seeing signs of softness. Rent gains have rebounded from declining in 2018 but remain moderate. Vacancies have compressed but remain elevated from the lows seen earlier this cycle after several large-block spaces have hit the market. Sales activity increased in 2018, with a couple of significant trades.   

 

 

QUARTER:  FIRST 2019
NET ABSORPTION:  1,200,000 sf
VACANCY RATE:  4.3%
AVERAGE RENTAL RATES:  $18.35/SF

 The Salt Lake City industrial market is experiencing healthy growth along with the increasing population in the metro and popularity of e-commerce. Construction activity continues to grow, particularly for logistics properties. Nearly all of the more than 5 million SF under construction is logistics. Supply additions, along with softened demand recently, have put pressure on vacancies, which have increased slightly but overall remain tight. Rent growth has increased to see strong gains after slowing to more moderate levels in 2018. Investment activity is off to a modest start in 2019, following a solid 2018 that saw the number of transactions rise.  

 

QUARTER:  FIRST 2019
NET ABSORPTION:  2,200,000 SF
VACANCY RATE:  4.2%
AVERAGE RENTAL RATES:  $6.66/SF