Commercial real estate market improving, report says

FILE Demand for top flight office space in the Salt Lake Valley is growing, according to two reports detailing the Wasatch Front commercial real estate market during the second quarter of the year.

Scott G. Winterton, Deseret News

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SALT LAKE CITY Demand for top flight office space in the Salt Lake Valley is growing, according to two reports detailing the Wasatch Front commercial real estate market during the second quarter of the year.

Both CBRE and Coldwell Banker Commercial released their respective studies on trends in the office, industrial and retail real estate sectors. A common theme was increasing demand as the states fiscal potency continues to remain among the best in the country.

The Coldwell Banker mid-year 2014 report states that steady yet positive changes are expected to occur over the remainder of the year. Class A office space in the downtown central business district showed improved viability for tenants looking for enhanced amenities, new construction and better transportation.

Expect to see the downtown office market remain unchanged throughout the year while tenants look for upgrades and renovations to be made in Class B and C buildings, the report states.

Class A buildings have high quality standard finishes, state of the art systems, exceptional accessibility along with a definite market presence. Class B properties have finishes that are fair to good for the area and systems that are adequate. Class C buildings compete for tenants requiring functional space at rents below the average for the area.

The overall progress observed in the Salt Lake office market offers good reason for optimism through the remainder of 2014, explained Lew Cramer, Coldwell Banker Commercial president and CEO.

The report notes that the average asking lease rate for the Salt Lake office market registered at $21.85 per square foot, a slight hike of 1.4 percent from last years overall average. Of the three top segments, Class A space showed the highest rate gains climbing 2.4 percent from 2013 to a current average asking lease rate of $24.58 per square foot. The increase came despite upward movement in the overall vacancy rates in the office market.

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Commercial real estate market improving, report says