Although vacancy rates increased as a result of new construction, the Salt Lake market ended the year with 161,785 square feet of positive absorption. The positive absorption occurred despite the negative absorption in the downtown area of almost 350,000 square feet. However, the suburban market was much stronger, yielding more than 500,000 square feet of positive absorption more than offsetting this loss.
Lawson said the outlook for 2013 is one of renewed confidence and steady growth. Market indicators for Salt Lake are solid, but the shadow of domestic and foreign economic uncertainty may create stagnation in many professional services markets.
Locally, a number of new construction projects will break ground in the Salt Lake market, with several large companies moving into new build-to-suit or owner-occupied buildings.
Vacancy and lease rates are expected to remain steady throughout 2013, with corporate expansion within existing buildings being offset by the addition of the new construction.
Looking forward, Lawson said he is “cautiously optimistic” about the progress being made in the commercial real estate sector.
“By any standard, you have to say this past year was substantially better than the year before, which was somewhat better then (2010),” he said. “ If you look at the (trends), you are seeing growth. What we can (see) is very solid, sustainable growth at a higher rate than experiencing today.”
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