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CONTACT US

BARB JOHNSON, CCIM, SIOR
+1 801 869 8019
barb.johnson@cbre.com
www.cbre.com/barb.johnson
LinkedIn

VIC GALANIS, SIOR
+1 801 869 8021
vic.galanis@cbre.com
www.cbre.com/vic.galanis
LinkedIn

COURTNEY OWENS
+1 801 869 8022
courtney.owens@cbre.com
www.cbre.com/courtney.owens

Strong Finish to 2016 SLC Office Market! 
 

Record Office Development Continues with Many Planned Projects in the Works!

The Salt Lake office market is strong—the market continued to expand in 2016 and additional office development is set to be delivered in 2017. End-of-year statistics show sturdy net absorption, low vacancy, and robust rental rates which increased by 4.54% when compared to year-end 2015. Close to 1.7 million sq. ft. of new office space is currently under construction and announcements for new, planned office projects continue to occur. For four consecutive years, Salt Lake has realized over 800,000 sq. ft. of net absorption. Vacancy remains around 10% which is low, but it did increase by 60 basis points; this makes sense when considering the amount of new construction taking place. Positive year-over-year employment growth continued, increasing from 2.9% to 3.5%, but Utah is experiencing very low unemployment (2.4% in Salt Lake City) which presents a challenge to businesses as they seek qualified, trained workers for their specific industries. The cost of doing business is a great asset to the local business owner; Utah’s cost is 5.3% below the national average and the job growth rate is forecast to be the third best in the nation for the next five years. Strong job growth and low business costs will allow Utah’s economy to remain strong if employers are able to recruit the qualified candidates they need.


The Big Story

Downtown asking lease rates soared by 10.4% year-over-year with average Class A rates ending the year at $29.28 per sq. ft. This was primarily due to the completion of 111 S. Main which drove Class A rates to an all-time high. Another noteworthy story is the continued demand for large blocks of office space and the recent occupancies of large-end users such as Goldman Sachs, Health Equity, InContact, I Solved, SoFi, and the University of Utah. 2016 also saw an increase in tenant improvement costs; the average tenant improvement allowance has increased by 27% since 2013. When selecting an office, tenants prioritize the efficiency, energy, feel, and functionality of their workplace. With low unemployment, business owners continue to focus on creating a culture and environment to attract and retain employees. 

For additional insight into the office market, please call or email Vic and me. We welcome the opportunity to address your specific needs and goals.