Office 2Q2018 SLC
Continued Strength and Recognition
The Salt Lake County office market continues to be one of the strongest in the nation as increased market activity proves it has yet to reach its fullest potential.
An increasing number of tenants are looking for generous floor space, anywhere from 20,000 to 50,000 square feet. Currently, absorption rates recorded a net positive 447,884 square feet, with the largest amount of absorption in Draper at 199,198 square feet. Vacancy rates in Salt Lake County decreased by 3.16 percentage points from second quarter 2017 to 10.40 percent currently. The amount of new construction coming to the market is keeping pace with increased demand.
The overall weighted average asking lease rate increased slightly from this same time last year, landing at $23.89 full service overall. With over 1.4 million square feet of additional office space currently under construction and expected to be completed within the next two quarters, the adjusted asking lease rate for class A properties should increase significantly, ranging from $26.00 to $31.00 full service gross. Vacancy rates will also increase slightly as new construction projects are completed.