Summit County.

• Author: Anker, Tim
• Position: COUNTY REPORT

The commercial real estate market in Park City continues to strengthen and lease rates in every sector are increasing at steady levels. In addition to a strenuous entitlement process, local municipalities are spending record amounts to purchase open space in order to extinguish existing development rights, thus keeping inventories in check. The city's purchase of Bonanza Flats and Treasure Mountain alone will total over $100 million. Significant assets to trade during 2018 include the Rossignol Building and Park City Tech Center land at Kimball Junction as well as the Bonanza Park purchase by Park City Municipal. In addition to current investment offerings like Park Meadows Plaza and Holiday Village, look for additional assets to hit the market early in 2019 while seller's look to capitalize on historically low CAP rates in advance of rising interest rates.

OFFICE

LEASE RATES PSF

$16 to $28 NNN

VACANCY

4.6%

CAP RATE

5.75% - 6.75%

LAND VALUES PSF

$10 - $22

OFFICE SUMMARY

Office vacancy dropped from 5.3% at YE 2017 to 4.6% at the end of 2018 with the majority of that vacancy in the Prospector/Kearns submarket at just over 8%. General office space continues to be a scarce commodity in the Kimball Junction area, particularly in Class A properties. The biggest news in the office market this year comes in December with the sale of the Park City Tech Center development being sold to Dakota Pacific Properties who purchased the Skull Candy building in 2017. The nearly 1.2 million square feet of entitlements remaining in the development could nearly double the size of the entire office market unless the buyer chooses to renegotiate with Summit County the scale and use clause of the development.

INDUSTRIAL

LEASE RATES PSF $8 to $16 NNN

VACANCY 2.7%

CAP RATE 6.5% - 7.0%

LAND VALUES PSF $14 - $18

INDUSTRIAL SUMMARY

Although industrial vacancy rates fell from 8.8% at YE 2017 to just 2.7%...