The Salt Lake City office of CBRE announced that both office and industrial properties demonstrated continued improvement during the first half of 2012.
According to the CBRE Q2 MarketView Report, leasing activity of industrial space in Salt Lake County increased 21 percent in the second quarter, as more than 1.9 million square feet of industrial space was leased compared to 1.6 million square feet in the second quarter of 2011. Combined, industrial sales and leasing activity increased 11 percent in the second quarter compared to same quarter in 2011 (based on square feet leased).
What’s more, in the past 18 months, more than 1.5 million square feet of industrial space has been preleased by major companies including On Trac, a regional overnight package delivery service company; Sun Products, a manufacturer of household products; and International Paper.
According to Rad Dye, Senior Vice President at CBRE, “The supply of big box warehouse space has been down over the last few years. Tenants are quickly preleasing much of the newly constructed space that has come on the market.”
In another positive sign, the office market reported several favorable trends: net absorption was positive, vacancy decreased and lease rates essentially held steady. The vacancy rate for office space fell to 15.4 percent in the second quarter, down from 16.4 percent at the same time last year. Improvement in the office market can be attributed to a resilient and growing local economy.
According to a recent joint report by the Salt Lake Chamber and CBRE, healthy job growth in the Salt Lake metro area is expected to continue. Across all sectors, job growth should approach the state’s long-term average of around 3 percent. Financial services employment is expected to grow by 2.6 percent during 2012, while professional and business services should expand by 5.1 percent over the same period; such growth will produce healthy demand for office space.