Utah County.

Author:Fugal, Brandon
Position:COUNTY REPORT
 
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OFFICE

LEASE RATES PSF $21.74

VACANCY 9.29%

CAP RATE 6% -10%

LAND VALUES PSF $8.00 - $16.00

OFFICE SUMMARY

The Utah County office market experienced an uneven performance across the region's submarkets. At 833,876 square feet of positive net absorption, the North quadrant posted the lion's share of the market's 798,926-square-foot total. Asking rates increased by 3% during the year, ending 2018 at $21.47 PSF/ year full service as an additional supply of newer office space became available in 2018. While office activity in Utah County remained strong throughout the year, the pace increased by year-end 2018, building on more than four years of unprecedented growth.

Several high-profile speculative developments announced in 2018 made headlines throughout the year, with 1,834,453 square feet of office space under construction in Utah County at the close of the year--over 639,788 square feet more than Salt Lake County. 2019 will be a year of adjustment as Utah County folds this new construction into its office inventory and future developments reach completion in the year 2020.

INDUSTRIAL

LEASE RATES PSF $.63 NNN

VACANCY 2.40%

CAP RATE 7% - 10%

LAND VALUES PSF $6.00 - $12.00

INDUSTRIAL SUMMARY

Utah County's industrial market continued to experience a need for quality industrial space throughout 2018. At the end of the year, vacancy had declined to a mere 2.4%--offering little room for tenant activity or net absorption despite roughly 1,112,400 square feet of new product delivered to the market in 2018--the largest amount of industrial space added to Utah County in over three years. Currently just over 718,000 square feet of industrial space Is under construction with rumors that additional industrial parks are scheduled to break ground In 2019.

Leasing activity remained relatively unchanged throughout the year, with net absorption reaching 405,879 square feet, slightly less than the 574,188 square feet of absorption in 2017. Additionally, lease rates reached $0.63 PSF/ year NNN, close to where they fell during this same time last year. With such low amounts of available space, Utah County poses a major challenge to companies looking to expand or relocate. New major speculative developments will be announced during the first part of 2019, potentially helping balance supply and demand.

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