Excitement, power and dynamic are common words used to define many of the country’s urban areas. More so now this is evident. Nationally, major urban office markets are experiencing strong performance with low vacancies. This is largely attributed to low employment rates and the rise of the Millennial workforce.
So, where does Salt Lake City fall on the continuum? Indicators such as construction, corporate growth, and demographic factors show Salt Lake City is right in-step with national trends.
We can all agree over the past decade our city has grown exponentially, gaining a visually enhanced skyline in the process. Focusing on density, in less than 10 years, we have seen the construction of four residential towers: 99 West, Richards Court West, Richards Court East, and The Regent. Additionally, within that timeframe, we have seen the construction of two office towers: 222 South Main and 111 South Main.
Developers are vying to capture significant tenants to break ground and be the next office tower added Salt Lake City’s skyline. Will it be Boyer Company’s 151 State or Patrinely Group’s 650 Main. Held Properties’ 400 South Forum will come out of the ground, but will it be as a hotel or office tower? It will be exciting to watch. Of note, the pipeline is healthy with both approved and proposed projects. Comparatively, the amount and frequency of completed, current and future developments in our market is substantial, supporting the desire to work/live/play in an expanding Central Business District (CBD).
The five-year historical vacancy average for Salt Lake City is around 12%. Year-end vacancy in 2012 was 15% compared to 12% in 2016. Mid-year 2017, vacancy was around 12%. This drop is even more phenomenal when you take into consideration that since 2009, nearly a million square feet has come online, with majority of space immediately absorbed. The growth of the Salt Lake City office market is undeniable.
What is the story behind the numbers? What is spurring increased office development? Who are the people in-filling that space? The answer is impressive. Data tracked and provided by EDCUtah shows from 2012 to 2016 170 companies either expanded or relocated to Salt Lake City. Bringing 57,765 new jobs with over $4.6 billion capital investment to Salt Lake City.
Additionally, the tech boom of Utah’s Silicon Slopes has had an incredible impact on our economy, spurring growth and development (in all sectors) along the Wasatch Front. The boom has been so prolific, Park City is experiencing an increase in start-ups with officials noting the “town’s lifestyle helps industry draw top talent,” according to a recent Park Record article.
We are well-aware Utah and Salt Lake City have favorable demographics. Our young, highly-educated population is lending to the Millennial workforce being drawn to downtown. What some may not be aware of is the significant in-migration of workforce. Even more significantly is the age group. You guessed it, Millennials. Salt Lake City was recently ranked #15 as “The Cities Where Millennials Are Moving” by Time.
This is just a segment of the bigger picture. We are aware of the many accolades Salt Lake City continues to receive. As our city evolves, future accolades raving about culinary experiences, night life, arts and culture may not be too far out. The recent announcement of Downtown SLC Presents is focused on “turning its downtown core into a hub for arts and culture events that will attract visitors from far and wide,” as reported by a recent Salt Lake Tribune article.
We can safely say, “YES.” Salt Lake City does have cachet. Our renaissance city has something special. It is exciting to watch and be part of the evolution and new vibe being created…Salt Lake City cannot help but be a beacon.
By Chris Kirk, Managing Director, CBC Advisors