Investment sales soar

Real estate investors are snatching up everything from office buildings and apartments to retail stores and industrial warehouses in Utah, setting a record in total investment transactions in 2005 that exceeded $1.6 billion.

Last year's investment sales showed a 130 percent increase over 2004's sales at $679.8 million, according to a report released Thursday by Salt Lake-based Commerce CRG.

Last year's two biggest transactions were the sale by the Boyer Co. of The Gateway mall in downtown Salt Lake City to Inland Western Retail Real Estate Trust Inc., based in Illinois, and the sale of the Cottonwood Corporate Center, which was purchased by Hines, based in Houston.

Increases in sales were posted across all investment categories, the report said, with significant gains in the office and retail areas.

"Although high demand and rising property values have generated an increase in willing sellers," the report added, "there is still an insufficient supply of product to meet demand."

Office buildings in 2005 made up $488.4 million, or 31 percent, of Utah's total investment sales. Those transactions were followed by retail investments at $453.2 million and apartment purchases at $389.4 million.

Kip Paul, investment specialist with Commerce CRG, said about half of 2005's sales were by out-of-state investors.

"We're probably the single most attractive market in the western United States," Paul said. "When you compare our market to anywhere in California, Seattle or

Portland, our prices are still very attractive."

Paul said Utah has hit bottom and turned the corner, with office and apartment rents now on the rise.

"I think we're just starting our run here," Paul said. "I think we are going to go for at least three years or maybe more."

Other transactions included:

• The purchase of the Questar Corp. building in downtown Salt Lake City by Wells Real Estate Investment Trust II Inc.

• The sale of most of a 178-acre Salt Lake City office, industrial and technology park to Natomas Meadows Two, which does business as Freeport West and is owned by Nevadan Kern Schumacher.