Hard hat zone: Utah bucking national trends with commercial construction.

• Author: McFadden, Josh
• Position: Business Trends

While Utah has undoubtedly suffered the consequences of the Great Recession that began in December 2007, the outlook appears to be on the rise, especially when it comes to new commercial construction.

According to Utah real estate professionals and experts, Utah is among the nation's leaders in new building construction--a hopeful sign of a once-again healthy, robust local economy.

"This is an exciting time for Utah," says Brandon Fugal, Coldwell Banker Commercial executive vice president. "In spite of concerns regarding the economy and national political climate, Utah is leading the country on many fronts and offers ideal opportunities to accommodate expansion, strengthen recruitment and reduce operating costs."

According to CBRE Salt Lake City, Utah isn't the only state in the country that is seeing more demand for construction, but it does stand out as one of the faster-growing markets in terms of new construction completions.

Economic Foundation

Largely due to rare pre-lease commitments from major corporate users, along with local developers that are willing to take risks in order to meet projected demands, new construction is booming in Utah.

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Fugal identifies a number of notable, recent examples of large projects that have been completed or are in the process of being completed, including projects at Thanksgiving Point, Station Park in Farmington and Vista Station in Draper.

CBRE points out that new construction is chiefly the result of a healthy local economy and the fact that there are high-demand areas where inventory cannot oblige the requirements of the market.

"Demand for commercial space has increased [in Utah] because organizations see Utah as a place with a resilient and growing economy," says Mark Bouchard, senior managing director at CBRE. Bouchard also points out that, according to the U.S. Bureau of Labor Statistics, Utah has the ninth-lowest unemployment rate in the country and employment growth in the state is at its long-term average of 3.1 percent.

In addition, the U.S. Chamber of Commerce reports that Utah is the nation's fourth-fastest growing state for science and technology jobs.

Because of the myriad differences that exist between markets, it isn't easy making comparisons between Salt Lake City and other markets in the United States. But the statistics do paint a compelling picture.

According to CBRE, the average annual completion rate of new offices ranks Utah the highest out of 63 markets...