Downtown rents are headed up
Residents and businesses will have to pay more for the new digs, as the days of $225,000 condominiums and office space averaging $21.21 per square foot will soon be gone.
At a Downtown Economic Forum on Wednesday, an event hosted by the Salt Lake Chamber's Downtown Alliance, 300 business and government leaders heard updates on the Central Business District, which Salt Lake City Mayor Ralph Becker called "the financial, the religious and the community center for our state."
Since 2005, downtown has lost 600,000 square feet of office space, with the demolition of the Key Bank Tower for the LDS Church's City Creek Center and the conversion of almost half of the Triad Center from office to educational space for Brigham Young University.
Downtown now counts about 12.7 million square feet of office space, said Jim Wood, an economist with the University of Utah's Bureau of Bureau of Economic and Business Research.
Two new office buildings will fill most of the gap. The Gateway is designing its sixth office tower, to be completed in 2009, with 100,000 square feet of office space. And Chicago-based Hamilton Partners is building a 22-story skyscraper at 222 S. Main with 460,000 square feet of office space, also scheduled to be finished in 2009.
That's as much as 65 percent higher than the downtown average of $21.21 a square foot per month, and as much as 35 percent higher than similar state-of-the-art "Class A" office space, now going for $25.99 a square foot.
The prices are necessary to recoup the construction costs of copper, steel and concrete, Bingham said.
Thus far, the LDS Church has not announced the cost of its retail or residential space. But the numbers announced Wednesday caused Mark Gibbons of City Creek Reserve Inc. to joke to the audience that "we hope to see growth ... in the sense of those prices."
In the blueprints for City Creek, the LDS Church and its real-estate partners have a "place holder" for a office building. But they have no plans to build it just yet, Gibbons said Wednesday, and the church will not have any additional office space beyond the four buildings it currently owns in the area.
In Salt Lake City last year, 64,950 people worked downtown — a number that hasn't grown much from 2001, when 64,400 people worked downtown, likely because of the reconstruction. In 1990, 49,150 people worked downtown.
Downtown "is first and foremost an employment center for the state," said Wood.
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