Salt Lake City Office Investment Forecast
Absorption Trends Rapidly Move Toward 2019 Levels;
Investment Activity Suggests Sustained Buyer Fervor
Vacancy is descending more quickly than in many other metros. Salt Lake City has been one of the most resilient employment markets in the country when faced with pandemic-related disruptions, aiding office fundamentals. The metro has progressed well below peak vacancy seen in early 2021, and has recorded rent growth in both 2020 and 2021, a trend that will accelerate in 2022. Tenant demand has been strongest in the metro's largest office submarkets, like Downtown Salt Lake City and north Utah County. The portion of Utah County known as the “Silicon Slopes” has seen steady leasing activity in recent quarters, highlighted by software firm Domo agreeing to fill an additional 150,000 square feet on top of the nearly 30,000 square feet it already occupied in the same American Fork business park. At the same time, net absorption has been consistently positive on a quarterly basis in the CBD since early 2021. While most new projects will be opening in these two locales, overall construction is down substantially, providing leverage for vacancy drops and stronger rent climbs in 2022.