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Industrial Real Estate

Salt Lake County's industrial sector continues to be healthy in the first half of 2008. Overall industrial vacancy for 2008 is down to 5.62%  due to continued strong demand. Activity levels have declined in buildings 5,000 to 50,000 square feet.  However, lease activity in large facilities has almost doubled since 2007. 

Commerce/CRG reported in their mid-year 2008 report that sales prices for industrial properties have risen dramatically due in part to an undersupply in all size categories.  Prices are up by an average of 28% during the first half of 2008.

Nearly half of the industrial market activity in 2008 has occurred in buildings larger than 100,000 square feet.  This demand for larger distribution facilities is reflective of the changing national distribution patterns where companies are bringing products closer to their markets because of higher fuel costs.  Salt Lake's central location in the West makes it an ideal place for distribution to western markets.

Two large lease transactions this year include cosmetic distributor Sephora with 311,904 SF leased and online retailer Overstock.com with 686,865 SF in a new project.  For more information, visit Commerce CRG website.

Growth in the Rocky Mountain Region will continue to create a need for additional industrial and distribution space in the Salt Lake Valley.   Utah is expected to maintain its status as the vibrant leader of a robust region in 2008, a fact that will continue to benefit and fortify the industrial market in Salt Lake County as well.

Research Parks:

Salt Lake County is home to the University of Utah's 320-acre Research Park (the twelfth largest in the nation). The park has 6,000 employees, 37 private tenants, 51 University of Utah departments and a 200-room conference center hotel and restaurant facility. The park is home to dozens of University of Utah-spawned companies such as Evans & Sutherland, Sarcos and Myriad Genetics.

Industrial Parks:

There are a dozen, well-planned industrial parks in the Salt Lake market. The lease rate for building space in the parks varies, depending on the location and quality of space. Lease rates averaged $.41 per square foot NNW across the market.

Industrial Rents & Construction

Building Size 2008 Rents 2008 Construction
0-5,000 S.F. $0.52 0 S.F.
5,001-20,000 S.F. $0.47 113,028 S.F.
20,001-50,000 S.F. $0.46 192,980 S.F.
50,000 S.F. + $0.36 1,581,968 S.F.
Total Square Foot Increment $0.41 1,887,976 S.F.
Source: Commerce CRG 2008 Mid-Year Market Review
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