Office vacancies dip
6th consecutive quarter that the rate for S.L. County has declined
In this year's fourth quarter, the county's office vacancy rate fell to 10.81 percent — excluding sublease space — down from 15.25 percent in the fourth quarter of 2004. It was the fifth consecutive quarter that vacancies have dropped, according to a report by Commerce CRG, a Salt Lake-based brokerage firm.
For the 12 months ended Dec. 31, roughly 1.5 million square feet of office space was absorbed, matching a record set in 2000 and nearly doubling the amount of space absorbed in 2004, the report said.
New office construction in 2005 included six buildings with more than 400,000 square feet. The buildings had a 95 percent occupancy rate after completion.
That trend is good news for commercial real estate developers like Illinois-based Hamilton Partners, which plans to build a 22-story office building at 222 S. Main in downtown Salt Lake City in 2006, according to Ken Shields, asset manager for Hamilton.
The new tower would add 350,000 square feet of new space to the Salt Lake market.
Shields said lease rates are up at the company's two other downtown Salt Lake office buildings, the Broadway Centre at 111 E. Broadway and the Newhouse Building at 10 Exchange Place. Occupancy in those buildings is above 95 percent.
Bill Martin, co-managing partner of Commerce CRG, said the Salt Lake market is healthy, with many out-of-state companies looking to relocate in the state.
"There are a lot tenants that are looking around," Martin said. "It's getting a little tricky to find some bigger spaces, and that's the reason they're building these six new buildings."
Mike Richmond, a leasing agent with Commerce CRG, said average asking lease rates for all classes of office space have increased to $17.58 per square foot in 2005, up 30 cents from $17.28 per square foot a year ago.
The strongest leasing activity, Richmond said, is in the southeast quadrant of Salt Lake County, near 6200 South and 3000 East, where suburban office parks like the Cottonwood Corporate Center, Millrock Park and Old Mill are drawing tenants.
The report noted that industrial space vacancies in this year's fourth quarter declined to 7.27 percent from 8.49 percent in the fourth quarter of 2004.
E-mail: danderton@desnews.com
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