Investment market.

• Position: STATE OF THE MARKET - Statistical table

OVERVIEW

With access to inexpensive debt and an increased demand for high-quality investment assets, CAP rates compressed in 2014, more than previously seen in years past. Class A office space sold for around 100 basis points (1.0%) less than the prior year. Investment grade properties sold in the low 7% CAP rates, with some properties experiencing more aggressive percentages. Investors valued metrics such as price per foot, market rents, and management strategy to accurately calculate any risk tolerance and secure prudent investments. While quality products are moving, vacant and distressed properties received hesitancy from the investment community. Market competition for quality product predominantly exists, but has not become hysteric.

A stable and quickly growing tech sector received heightened national and international attention throughout 2014- The focal point of Utah investment, the North Utah County and South Salt Lake County markets or "Silicon Slopes", continues to attract significant amounts of investment capital. These two markets are rapidly merging and will be seamless in a few short years. Adobe, AtTask, Domo, Fusion-io, Mindshare, Money Desktop, Vivint Solar, Xactware, and others lead this charge.

Although some institutional investment groups still classify Utah as a tertiary market, many large firms demonstrated confidence by purchasing Utah properties throughout 2014--KBS, Hines, Unico, SIR Properties, Kite Properties, and Prologis just to name a few. Organizations with varying levels of investment capital have begun to diversify their portfolios by increasing the percentage of funds allocated to commercial real estate investment. The financial sector quietly absorbed Utah office space, in turn promoting job growth. Goldman Sachs, Discover Financial and American Express have established a significant presence within the Salt Lake market. Consistent additions to a growing employment base and substantial office space expansion at Goldman Sachs have not gone unnoticed by the financial world in general. Utah shopping centers also became a point of interest. Excell Trust and TriGate Capital committed in excess of 223 million dollars into retail shopping center acquisitions along the Wasatch Front.

Demand for Class A multifamily properties continues to increase despite market valuations nearing all time highs. Multifamily inventory is projected to grow 2.9% in 2015 as new construction breaks ground throughout the Salt Lake...