Wednesday, October 31, 2012

CBRE Reports Increased Construction of Office and Industrial Properties

Completed construction of new industrial buildings in the Salt Lake market was significant in the third quarter while completed office space also made a comeback, according to a report by the Salt Lake City office of CBRE.

“In response to big box demand for larger, more modern space, Salt Lake County has experienced a significant amount of new multi-tenant industrial construction boom,” said Rad Dye, Senior Vice President at CBRE. “In fact, industrial facilities under construction have not dropped below 500,000 square feet since the first quarter of 2011.”

Currently, there is 1.4 million square feet of industrial space under construction, a 41 percent increase compared to 964,000 square feet of space under construction in the second quarter. Two notable industrial buildings completed construction in the third quarter: Rockefeller E building in Salt Lake City and Cookietree Bakeries building in Murray. Both buildings are single-tenant projects. Furthermore, over the last 12 months, 5,000 manufacturing jobs were created, making manufacturing the second largest job producer in Utah, according to the August jobs report from the Utah Department of Workforce Services. On the office front, completed office properties (multi-tenant over 20,000 square feet) made a significant comeback. Roughly 268,000 square feet of office space was completed in the third quarter up from 104,000 square feet completed in the previous quarter. Two multi-tenant office buildings were completed in the third quarter: Old Mill Corporate Center IV in Cottonwood Heights and Building One at The Interchange in Draper.

A significant amount of office construction is taking place in Lehi. Although not technically in the boundaries of the Salt Lake office market, the area’s proximity to Salt Lake County is a big draw for companies wanting to tap the labor markets of both Utah and Salt Lake counties. Several hundred thousand square feet of office space is underway including two buildings at Thanksgiving Point and the new Traverse Ridge project. Utah Policy