SALT LAKE CITY — New construction and strong leasing reignited Salt Lake County's retail market in the second quarter of the year, a new report states.
According to real estate services firm CBRE, the new construction and leasing reversed a slow start to the year and spurred the best single quarter for market growth in over five years.
Mountain View Village, a new 285,000-square-foot retail development in Riverton, was the largest contributor to the growth, the Q2 MarketView Report said, adding that 73 percent of the development has been leased.
The report noted, however, that although the Riverton project was a boost to the market, no additional major projects are expected to break ground this year.
In a statement, JR Moore, CBRE's first vice president, noted that although construction has tapered off for the year, there is still 1.38 million square feet of big-box space available in Salt Lake County, which offers great potential for redevelopment or repurposing.
The report also noted that 2.4 million square feet of new industrial construction was completed during the second quarter, 63 percent of which was speculative space, meaning that construction began before any tenants had committed to lease space within the developments.Comment on this story
"Industrial construction and leasing has been phenomenal during this cycle," Tom Dischmann, CBRE senior vice president, said in the statement. "At mid-year there was 4.2 million square feet under construction, which is a substantial total for our market. This is even more impressive when considering that 2.9 million square feet of new product has already delivered year to date. This total for the first half of the year surpasses the annual delivery totals for four of the last seven years."
In addition, the report noted over the last year office vacancy in downtown Salt Lake City decreased 14.1 percent in the second quarter due to steady lease activity and a lack of downtown development.
Although the market is healthy, the report said the current dynamic has affected tenants seeking large blocks of space.