Utah market soars, but lack of inventory stalled further growth

Utah's commercial real estate market is expected to fare well in 2014.

The Utah chapter of the NAIOP, the Commercial Real Estate Development Association, met Jan. 7 and discussed 2013's results and the forecast for 2014. Leaders from commercial real estate companies showed optimism but still hesitance about its future, as they are still reeling from the economic crash.

Last year, there were record cash flows that hadn't been seen since before the economic crash, and the state's commercial real estate markets topped $1.3 billion, the Salt Lake Tribune reported. Experts note, though, that the market would have performed even better, but it was held back by lack of inventory. 2014 should be as healthy or even healthier, however.

The meeting of the state's NAIOP – formerly the National Association of Industrial and Office Properties – demonstrated a mix of emotions.

"The years '08 and '09 were the most unpleasant years that I've spent at the company," NAIOP member John Cushman, board chairman for New York-based, privately held Cushman & Wakefield, a global commercial real estate services company, told the Tribune. "We had to take good businesses and carve them down to the bone."

Healthy gains, positive forecast
In 2013, out-of-state buyers made up nearly two-thirds of the commercial deals in Utah that were larger than $10 million. One of the major factors was that many workplaces are striving to have hip new offices that help in recruiting young, hungry talent. The Tribune also reported that several national retailers announced plans to open their first operations in the state.

Utah's job market also is expected to grow, which means many companies may look to move to the state in order to maintain an educated, skilled workforce. Darin Mellott, senior research analyst for CBRE Group told the Tribune that in 2014, the state will experience lower unemployment, rising home values and more companies setting up shop there.

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