Office vacancies up in Salt Lake County

SALT LAKE CITY — The amount of vacant office space in Salt Lake County reached a six-year high during the third quarter of 2010.

The Salt Lake City office of commercial real estate firm, CB Richard Ellis, announced Wednesday that as of Sept. 30, the office vacancy rate in Salt Lake County was 17.4 percent. That's up from 14.6 percent during the same period a year ago.

There is about 5.3 million square feet of vacant office space in the county, compared to 4.3 million square feet of vacant space at the same period last year, according to the CBRE Market Report.

In 2004, the office space vacancy rate hit a high of 20 percent, the report stated.

"The vacancy levels of the office market reflect the impact of the nation's recession on our state's economy," said Vic Galanis, CBRE office specialist.

Ironically, the report stated that the average asking lease rate in Salt Lake County increased to $19.47 per square foot compared to $19.25 per square foot in the same quarter last year. Increased availability of premium office space has resulted in a lease rate hike.

At 23.9 percent, the Central Valley East area — including Millcreek and South Salt Lake — had the highest office vacancy rate in the county, while Research Park, located near the University of Utah, registered a 2.8 percent vacancy rate, the lowest.

Galanis said the higher vacancies would likely lead to better rates for prospective tenants for the next several months at least.

"It appears that there won't be a marked improvement in occupancy levels in the first half of 2011 and landlords will continue to have to offer aggressive terms and conditions to secure new tenants," he said.

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