Salt Lake County Sees Job Growth of 3.7% in Q3 2018 — the Highest in the Nation
SALT LAKE CITY, UT — October 23, 2018 — Ranked sixth nationally for economic opportunity, Salt Lake County maintained its precedent of outperforming the U.S. economy through Q3 2018. Year-over-year, the county saw unemployment dwindle from 3.4% to 3.0% – a 40-basis point (bsp) drop. Meanwhile, Salt Lake County saw total employment climb to 740,000 while Utah, as a whole, saw job growth of 3.7% during the last year – the highest such rate in the nation.
Most notably, according to Cushman and Wakefield Research Analyst, Culum Mills, vacancy dipped by more than half year-over-year, down more than 340 bps; a strong indication of the exorbitant demand for the county’s industrial product. Net absorption was very strong for the quarter with multiple leased deliveries driving absorption up to 2.7 million square feet (msf) year-to-date. At $0.47 per square foot (psf), average asking rate maintained its recent trend of resting in the high $0.40 psf, but climbed by more than 400 bps from Q2 2018. Leasing activity for the county was also significant during Q3 2018 at 1.5 msf, passing the 5.0 msf mark for the year.
Sales activity for the quarter was stout at 592k sf bringing the total square footage sold for the year to 1.7 msf. Exponentially growing, Salt Lake saw over 1 msf of industrial construction completed during Q3 2018 alone, bringing the total square footage delivered for the year to nearly 2.5 msf. Completed construction is overwhelmingly comprised of warehouse space and has been absorbed rapidly, with over 80% of delivered square footage occupied.
With nearly 4.0 msf currently under construction, industrial inventory growth will be significant for the foreseeable future. About 90% of the construction is speculative,and about two-thirds of the projects are slated for 2018 completion. The bulk of square footage both delivered and under construction during Q3 2018 were concentrated in the North West Quadrant (Salt Lake City’s Western edge, including approximately 28,000 acres of land*) with some spillover into the Central West Quadrant. Despite the volume of construction activity, land is an increasingly scarce commodity. Mills forecasts increases in land prices across urban Utah in the coming years. Furthermore, as rents increase to match demand, Mills also says to expect user property sales to become more elusive. Specialty product such as spaces with rail service, food grade space, spaces with fenced yard, and auto related properties will continue to see upticks in demand. Overall, historic levels of construction activity, strong absorption, and significant leasing activity paint an optimistic picture for the future of Salt Lake County’s industrial stakeholders.
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For more detail, access the full report here https://cushwk.co/2AsjQxn
*North West Quadrant Market Plan https://bit.ly/2OPCqYX
Research Contact: Culum Mills
Cushman & Wakefield
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Cushman & Wakefield
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