The office property markets remained strong in Utah, Salt Lake County and downtown Salt Lake City in 2007.
Several reports issued in the past few days use "bright star," "sustained demand" and "successful" among the glowing terms to describe that real-estate sector, with office vacancy rates hovering between 11 percent and 12 percent.
Coldwell Banker Commercial's year-end report for the state's commercial real-estate market was glowing.
"Overall, every market sector finished with solid performances," Gary Knight Mangum, managing director and principal broker, said in the report. "The retail market experienced one of the best years the intermountain region has ever seen, new office buildings continued to dot the valley and investors continued to look at Utah's landscape as one of extreme opportunity."
CBC's office report indicated an 11.7 percent vacancy rate for the overall market "still among the lowest vacancy the Utah office market has seen during recent years" and absorption above 1 million square feet, up from nearly 775,000 square feet in 2006.
Net absorption is the amount of square feet leased in a specific geographic area over a fixed period after deducting space vacated in the same area during the same period.
"Looking back, 2007 was indeed a strong, stable year that finished with solid results and measured up to the record successes of 2005 and 2006," CBC said of the office sector.
"There is no doubt that 2007 was a successful year for Utah's office market, surpassing 2006. Increased construction and new starts, as well as rising property values and low vacancy rates, prove that Utah is still experiencing the benefits of one of the nation's strongest economies."
Commerce CRG's year-end report indicated that downtown office space remains in high demand. "We face a two-year wait for the end of the downtown office-space shortage." Hamilton Partners' tower at 222 S. Main, with 420,000 square feet, is due to open in two years.
Demand remains above the 10-year average, the report said.
Fifteen new buildings with a total of 1.5 million square feet were completed in 2007 in Salt Lake County. "Businesses chowed down on 1,153,000 square feet of it well above the annual average of the past decade," the report said.
Total vacancy grew only 0.48 percent, to 10.76 percent, in the county. Class A vacancy in the central business district was at an all-time low early in the year, and "Class A tenants appear unwilling to settle for Class B facilities," Commerce CRG said.
CB Richard Ellis reported that the county's office vacancy rate grew in 2007 "but remains at a historically low level." The agency pegged the county vacancy rate at 12 percent at the end of the year, up from 11.3 percent at the end of 2006. The downtown rate was 11.5 percent, up from 10.8 percent a year earlier.
The agency reported that more than 1.1 million square feet of new office space was completed in 2007.
NAI Utah Commercial Real Estate reported net absorption of nearly 1.5 million square feet for 2007 in what it called "another year of solid growth and absorption."The NAI report put the current overall county vacancy rate at 11.04 percent.
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