Q4 2018 Salt Lake City Market Report
Led by a growing and vibrant business environment, the Salt Lake City Office Market continues to experience strong demand from both new and existing companies, particularly in the technology sector. This demand has resulted in record breaking construction for Class A Suburban Office space and market-wide net absorption of nearly 1.2 million SF of space. This demand combined with ever increasing construction costs and land values has driven asking lease rates to their highest level ever. Existing Class A suburban buildings are asking $28-$34/SF, full service and the newest Downtown high-rise, expecting to break ground later this year, anticipates asking lease rates approaching $40/SF.
Moving forward, over 2 million SF of office space is currently under construction and will be added to the inventory in 2019/20 with additional projects planned to break ground later this year. We anticipate lease rates will continue to increase while vacancy rates could flatten or even increase modestly in some property categories as new product enters the market. Net absorption in 2019 should again exceed well over 1 million SF, provided the overall economic environment remains healthy. Occupiers in need of space should have more facility options in 2019 should again exceed well over 1 million SF, provided the overall economic environment remains healthy. Occupiers in need of space should have more facility options in 2019, but at higher overall costs.