June 12, 2023
In the ever-evolving world of U.S. real estate, Salt Lake City has made an impressive splash. Recently, the Kenan Institute of Private Enterprise positioned Salt Lake City as the seventh fastest-growing area in America, joining high-profile locations such as Austin and Seattle. The city even outshined real estate heavyweights like Los Angeles and Manhattan in PricewaterhouseCoopers and Urban Land Institute's 2023 Emerging Trends in Real Estate report.
Salt Lake City's dynamic real estate prospects have attracted attention, particularly its flourishing data center market. As the U.S. anticipates a 10% annual growth in data center demand until 2030, Salt Lake City is strategically positioned to ride this wave. Utah's low electricity rates provide an ideal environment for these energy-intensive facilities, indicating potential for even more growth in this sector.
Despite an impressive leasing of 3M SF of industrial space in Q1 2023, there's a growing disparity between supply and demand in Salt Lake City's industrial sector. Only 28.3% of the 1.3M SF of newly delivered industrial space was leased upon delivery, revealing an exciting challenge for the market.
While nationwide office vacancy issues persist, Salt Lake City continues to chart its unique course. With a stable direct vacancy rate of 12.3% in Q1 2023, the city's office leasing landscape is seeing a surge in smaller users, signaling new opportunities for landlords and brokers alike.
The multifamily sector continues to exude strength and resilience. Following record-setting multifamily investment sales volumes in the first half of 2022, industry professionals remain positive despite recent interest rate hikes and market uncertainties. As Rawley Nielsen, President of Investment Sales at Colliers Salt Lake City, shared, Salt Lake City's population growth creates a pressing need for continued development.
"Despite new supply coming online, Salt Lake County demand remains high and should stay strong. Salt Lake City is transforming with developments that will reshape the skyline,” Nielsen remarked.
From the flurry of activity in the data center and industrial markets to the steadfast growth of multifamily sector, Salt Lake City is an undeniable powerhouse in commercial real estate. Stay with Offerd for the latest multifamily market trends, as we continue to provide informed insights and expert advice in this dynamic landscape.