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Market Report

Salt Lake City Office Investment Forecast

2020 Outlook

Absorption Aligns With Construction Volume; Influx of Out-of-State Investors Drives Pricing

Employment growth continues to warrant sizable supply additions. Home to a well-educated workforce and a regionally lower cost of doing business, the Wasatch Front remains a focal point for expanding corporations. Many of these growing firms concentrate on tech, finance or professional services, which heightened demand for available office space and newly built properties. As a result, the metro vacancy compressed 270 basis points during the four-year span amid the completion of nearly 11 million square feet of space. In 2020, a steady flow of project deliveries is once again lined up, as more than 3 million square feet is finalized, driven by supply additions in Draper and South Jordan. While construction activity remains elevated this year, most of what is slated for completion is well leased. The lack of available, newly developed space coupled with steady hiring velocity by office-using firms will fuel demand for existing floor plans in 2020, translating to a slight adjustment in vacancy for a second consecutive year.

 

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