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Industrial Real Estate

Salt Lake County's industrial sector has seen continued growth in 2006. Overall industrial vacancy for 2006 was 7.4 percent. In 2006, developers continued to build speculative buildings targeted for not only smaller users, but also for big box retailers.   Almost 3.7 million square fee of new industrial space was built in Salt Lake County during 2006. Several new industrial projects came online including a Costco Distribution Center and Kraftmaid Cabinets' western distribution facility. 

Commerce/CRG reported in their 2006 year-end review, that Utah's robust economy encouraged industrial development throughout Salt Lake County. New construction projects were evenly split between owner/users and speculative developers.  A significant rise in lease rates can be traced to the high cost of new construction.  This increase in lease rates has prompted many small users to find facilities to purchase.

Prices for quality developable land continue to rise.  Industrial land values have increased more than 25 percent over the past year.  For more information, visit Commerce CRG website.

Growth in the Rocky Mountain Region will continue to create a need for additional industrial space in the Salt Lake Valley. Because the transportation crossroads of I-80 and I-15, Salt Lake is positioned to capture additional distribution centers, as well as companies looking for a western-based manufacturing hub and/or office services.  Utah is expected to maintain its status as the vibrant leader of a robust region in 2007, a fact that will continue to benefit and fortify the industrial market in Salt Lake County as well.

Research Parks:

Salt Lake County is home to the University of Utah's 320-acre Research Park (the twelfth largest in the nation). The park has 6,000 employees, 37 private tenants, 51 University of Utah departments and a 200-room conference center hotel and restaurant facility. The park is home to dozens of University of Utah-spawned companies such as Evans & Sutherland, Sarcos and Myriad Genetics.

Industrial Parks:

There are a dozen, well-planned industrial parks in the Salt Lake market. The lease rate for building space in the parks varies, depending on the location and quality of space. Lease rates averaged $.37 per square foot NNW across the market.

Industrial Rents & Construction

Building Size 2006 Rents 2006 Construction
0-5,000 S.F. $0.41 0 S.F.
5,001-20,000 S.F. $0.43 197,212 S.F.
20,001-50,000 S.F. $0.34 469,800 S.F.
50,000 S.F. + $0.34 3,021,401 S.F.
Total Square Foot Increment $0.37 3,688,413 S.F.
Source: Commerce CRG/Cushman Wakefield 2006 Year-End Market Review. 
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