2018 was another very strong year for Utah's economy and the office market in general. Utah continued to rise to the top of national rankings, with continued global attention and awareness by outside companies and investment dollars. The Utah job market made strong strides for market diversification and job growth fueled by robust economic conditions. Utah leads the nation in tech growth. Proximity to a world-class outdoor environment and a renaissance energy in the capital city reveals a developing urban workforce and lifestyle, all of which contribute to Utah's evolution from a tertiary to secondary market.
SALT LAKE COUNTY OVERVIEW
2018 delivered a solid year for the Salt Lake County office market which continues to be one of the strongest in the nation. Companies expanding or moving to the market favored leasing space in the southern portion of the county, taking advantage of new construction and access to talent. Subleasing space was less of a major trend in 2018 as in the year prior, as many tenants chose to occupy the space they had set aside to absorb.
The suburban skyline along I-15 continued to expand in 2018 as Mountain America Credit Union moved into their recently completed 11-story 327,600 square-foot corporate headquarters location in Sandy, alongside the new Hale Theatre. 136 Center Building 1 was also delivered which kicked off the first of several planned office buildings within close proximity to the prison.
The Sugar House submarket expanded its office offering with the redevelopment of the former Shopko site. The 170,000 square foot University of Utah Sugar House Clinic located at 40 Park Avenue continues to progress in construction, with a planned delivery date of October 2019. 60 Park Avenue is offering 150,000 square feet of Class A office space for lease.
Downtown Salt Lake City has seen an increase in tenant attention as tech companies continue to explore expansions into Utah. The downtown urban landscape, vibe, and labor-force is ever-evolving as evidenced by The Gateway landing several large office tenants.
Salt Lake County key office market indicators of absorption, vacancy, lease rates, and new construction all trended in a positive direction indicating a strengthening of the overall market.
Net-positive absorption more than doubled in Salt Lake County in 2018--from 639,160 square feet at the beginning of the year to 1,433,399 square feet at year-end. The majority of absorption occurred in Class A...