03/07/2014
The commercial markets in southern Utah continue to improve. As of September 2016 our industrial market vacancy factor has dropped to less than 3%. Retail Vacancy (for quality space) is less than 5% and office vacancy (again for quality space) is less than 10%. There is no significant construction of new space in the market for any segment which is pushing rental rates up. We anticipate that rental rates for Industrial will reach over $.55/sqft/mo, rates for retail are averaging (for quality space) around $1.65/sqft/mo, with a high of over $3/sqft/mo for some spaces, and Office rates are now pushing $1.35/sqft/mo on average with some high end office spaces in the $1.45/sqft/mo range. Quality space is hard to find and rental rates will continue to go up.
Landlords: If you are a Landlord, you would be wise to carefully evaluate your prospects and make sure your agents are not stuck in the past as far as rental rates go.. for office space you should definitely be in the $1.15 to $1.25 on a net basis (doesn't include CAMs) range for good space, higher for high quality space. Retail should be in the $1.45 to $1.65 range on a net basis with CAMs running around $.25 to $.30 /sqft/mo. Industrial space should be in the $.45 range on a net basis, and for infield quality industrial/flex space, you should be looking at rates even higher.
Tenants: If you are a tenant, now is the time to lock in your lease terms for at least a 3 year term.. you might want to consider even longer, but it is hard to forecast where we will be that far out in this market. If you have a lease coming up for renewal within the next couple of years, I would strongly suggest you approach your Landlord about an early extension of your lease.. This will help you lock in a lower fixed rate and protect your operating expense upside in the future.
If you are considering a relocation or thinking of expanding into the southern Utah market, NOW us the time to act!
Give us a call - Jeff Reber or Greg Whitehead at 435-656-8238
