Laura Seitz, Deseret News
City Creek Center, a new shopping and dining destination opening in Salt Lake City on March 22, 2012, will transform the downtown retail landscape.

SALT LAKE CITY — The commercial real estate market in Salt Lake area bounced back in 2011, after a challenging year in 2010.

A report from commercial real estate firm C.B. Richard Ellis showed that Salt Lake County’s office vacancy rate fell to its lowest point in three years due largely to a recovering Utah economy that added thousands of new jobs.

The year-end office vacancy rate fell to 15.3 percent, down from 17.1 percent last year. Additionally, office absorption reached more than 652,000 square feet for the year, more than double the square feet absorbed in 2010. Absorption is the change in occupied square feet for all existing properties during a period of time.

“Over the last year, employment in the key sectors of finance and professional and business services grew well above national averages, fueling office demand,” said Tab Cornelison, CBRE first vice president.

New construction in both the office and industrial sectors buoyed the market this year. Four new multi-tenant office buildings are currently under construction, totaling more than 481,000 square feet. They include: The Gateway 6 office building in downtown Salt Lake City, the Old Mill IV office building in Cottonwood Heights, the Interchange office building in Draper and The Pointe II in Draper.

Cornelison said the development of the billion dollar City Creek project has also had a significant impact on the commercial real estate market in the downtown area. He said the eventual success of the project could shape the city's central business district for years to come.

"Hopefully, the retail establishments in City Creek thrive," Cornelison said. "If that happens, in five years, you won't recognize Salt Lake City — especially after 6 o'clock in the evening."

City Creek could help make downtown Salt Lake City a bustling, vibrant locale similar to other metros like San Francisco, Boston or Chicago, he said.

Another major project announced this year occurred in August when Global online auction marketer eBay stated plans to expand its operations in Draper to include construction of a new state-of-the-art facility and the addition of 2,200 jobs over the next two decades. The facility is expected to open in 2013.

EBay currently employs about 1,400 workers in Utah and operates a major customer service center in Draper that includes support functions such as human resources, finance, account management, call center management, training and legal, along with product and project management. The company also operates a data center in South Jordan.

On the industrial front, there is currently 1.2 million square feet of industrial space under construction, a 44 percent jump since year-end 2010. The availability rate for the county industrial market is at 8.8 percent, up slightly from a year ago.

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Much of the increase was due largely to new speculative construction, the report stated. However, Salt Lake City continued to have one of the lowest industrial availability rates in the nation as many large retailers built distribution facilities, according to CBRE research and marketing manager Stephanie Marthakis.

"Developers are seeing the need arise for that big box space and are willing to take the risk to put up some new buildings," she explained. There are still more projects expected to come online next year, she added.

"It's really just a supply and demand issue," Marthakis said.