A lot of cities ... built way too many office buildings. The developers (in Utah) are a lot like the state. We pay our bills as we go. —Craig Thomas, senior vice president for CBRE
SALT LAKE CITY — For the first time since the recession began, development and construction of commercial real estate is on the rebound nationally, and Utah is among the leading states.
Utah ranked 6th in the U.S. in 2011 for direct spending across all categories of commercial real estate, the Commercial Real Estate Development Association reported Tuesday. That's a leap from Utah's 2010 placing — No. 26. Only West Virginia saw a bigger jump, from No. 48 to No. 3.
According to the study, $3.6 billion was spent in the development and construction of office, industrial and retail buildings statewide in 2011, which supported 77,550 jobs.
"It's not just one thing, it's a bunch of things," said Craig Thomas, senior vice president for CBRE, a commercial real estate firm. "We have been able to come out of this economic downturn faster."
Thomas said a lot of businesses have migrated from California "because they can't afford to do business there." Thomas cited multimillion-dollar facilities built by companies like Ebay, EMCCorp and Adobe that have chosen to come to the state as evidence. The young, educated workforce is another draw for companies to relocate to Utah, Thomas said.
The City Creek development, a $1.5 billion mixed-use project in downtown Salt Lake City that opened in March, also played a major role in commercial growth last year.
Developers in Utah are prudent, Thomas said, and the state is not facing the same problems other states are. "A lot of cities ... built way too many office buildings," he said. "The developers (in Utah) are a lot like the state. We pay our bills as we go."
Thomas predicted the commercial real estate market in the state will continue to be strong.
"The next 10 years in Utah will be its best ever," he said.
Texas led the survey with $7.9 billion in spending followed by New York, West Virginia, California and Arizona.
Stephen S. Fuller, professor and director of the Center for Regional Analysis at the George Mason University, who authored the study, said 2011 was a "transition year" for the U.S. economy and the construction sector.
"The U.S. economy shifted from a federal stimulus to private-sector driven growth pattern and construction spending grew accordingly," Fuller said.