COUNTIES: DAVIS COUNTY.

• Author: Falk, Chris

INTRO

With an abundance of housing opportunities at a lesser cost, and drivetimes to downtown and the Salt Lake International Airport of 20 minutes or less, Davis continues to flourish and expand in all commercial markets. The growth has placed heavy burdens of needed infrastructure on the county and it has responded in turn with the expansion of Highway 89 and the West Davis Corridor. Once complete, these new major thoroughfares only promise to more immediately connect the county to the southern markets.

OFFICE SUMMARY

The Davis County office market grew a much-needed 112,766 square-feet during 2020; however, it was absorbed very quickly with only 8,000 square-feet still available at yearend. For another year, large-block space was non-existent both in availability and in delivery of new assets. Larger and national credit tenants both out-of-state and locally are still hoping for large-scale opportunities to be announced in 2021 as they look to leave the coastal or urban areas. Overall, business moved forward as usual in Davis County as tenants made deals throughout 2020-however, many chose to stick to shorter terms or renewals as they held out during COVID-19 with Class B product performing the best.

INDUSTRIAL SUMMARY

The industrial market remained stable in Davis County, mainly constrained by a lack of available product with a vacancy rate of 1.20 percent. To alleviate some of the strain, nearly 1.1 million square feet is currently under construction throughout the county-however, 85 percent is already preleased and more developers will need to build spec development to meet the demand of users looking to enter the county. Amazon has expanded their footprint into Davis County with a delivery station in North Salt Lake and Lifetime Products is building a 659,500 square-foot warehouse in Clearfield that is scheduled to deliver late 2021. Lease rates increased marginally across all product types.

RETAIL SUMMARY

Davis County retail has fared rather resistant through 2020 in comparison to other counties along the Wasatch Front. Direct vacancy crept up to 4.4 percent during the second quarter of 2020 but dropped down to 4.1 percent by the end of the year with market rents still making a modest increase throughout the year. Some food retailers opened new locations to meet strong consumer demand for drive-thru or carry out, such as Beans & Brews, Crumbl, and Zao. Other retailers are shifting business from in-line strip suites to stand-alone drive-thrus or offering direct delivery. For Davis County, Station Park continues to attract top of the line retailers-Purple, Ramen Haus, Massage Envy, and Hotworx all opened or will open locations soon. Grocery retailers did well while other more specialized retailers such as department stores or clothing stores have suffered significantly in 2020.

OFFICE LEASE RATES PSF RANGE $10.84 - $18.90 NNN YEARLY PSF DIRECT VACANCY 8.10% CAP RATE | STRAIGHT AVG. 7.74% LAND VALUES PSF $9.50 INDUSTRIAL LEASE RATES PSF RANGE $0.64 - $0.78 NNN MONTHLY PSF DIRECT VACANCY 1.20% CAP RATE | STRAIGHT AVG. 6.72% LAND VALUES PSF $6.19 RETAIL LEASE RATES PSF RANGE $14.83 - $21.54 NNN YEARLY PSF DIRECT VACANCY 4.10% CAP RATE | STRAIGHT AVG. 7.00% LAND VALUES PSF $6.97 IRON COUNTY

Words: TRAVIS PARRY

SIOR, CCIM, PARTNER | LINX COMMERCIAL REAL ESTATE

IN SPITE OF ALL THE TURMOIL associated with the 2020 COVID-19 pandemic, Cedar City and Iron County wrapped up 2020 with some bright economic indicators moving into the new year. While the county's tourism industry took a severe hit with the shut-down of the Utah Shakespeare Festival and the Larry H. Miller Utah Summer Games, other sectors of the county's diverse economy surged. We saw strong population growth, record-breaking enrollment at Southern Utah University [SUU], high new job growth, and record-shattering residential construction.

Iron County joined Washington, Tooele, and Utah counties as the four fastest-growing counties in the state from 2019 to 2020 with a 2.67 percent county-wide increase. The Cedar City micropolitan area was nationally ranked fourth in annual percent growth. SUU's enrollment growth was, by far, the highest among Utah's public universities in a year when half of the colleges and universities saw a decrease in enrollment.

Iron County followed Utah and the rest of the country with job losses early...