Research & Forecast Report

UTAH COUNTY | INDUSTRIAL

Mid-Year 2019

Industrial Snapshot Market Indicators

The Utah County industrial market is enjoying continued strong Relative to prior period Current Year Over Year
demand for flex and industrial space but near historic low
inventory levels of both large and small blocks of space, making VACANCY 2.61%
it difficult to satisfy demand. Vacancy rates adjusted to 2.61
percent this quarter from 2.44 percent in the first quarter of the YTD ABSORPTION 768,303 SF
year, partly attributable to delayed new construction deliveries.
Vacancy rates may continue to inch upward upon completion of
CONSTRUCTION* 1,241,569 SF
the remaining 1.2 million square feet of industrial space
currently under construction, but these minor changes in
inventory and vacancy rates won’t affect overall market RENTAL RATE** $0.59 NNN
fundamentals or achieved rent rates for new product. *Change in under construction
**For existing product — does not include asking rents currently under construction
Construction increased since last quarter, from 679,252 square
feet to 1,241,569 square feet currently. More than 75 percent of
current construction is taking place in the North quadrant, while
the majority of the 843,018 square feet of completed
construction year-to-date is located in the South quadrant. A
significant portion of current construction is owner/occupied or Under Construction
build-to-suit. As the costs of construction and land continue to 1,241,569 Total Square Feet
increase, however, some developers may be less likely to move
forward with breaking ground as currently scheduled. 3%

Asking rates dropped slightly from $0.62 NNN first quarter to 21%
$0.59 NNN currently with a few large blocks of space in the North
market skewing these numbers down. Sale prices remain strong
as active investor interest, profitable owner/users and reluctant Central
sellers settle prices in near record territory.

Overall lease rates and sale prices have been following a linear South
increase over the last six years. As new, high efficiency product
76%
comes online, current tenants may vacate inefficient spaces for
new ones to lower operating costs. Landlords of second-
generation space may need to offer concessions, tenant
improvement allowances or lower lease rates to fill empty
spaces.
Overall Historical Asking Lease Rates (NNN)
By Square Feet
$0.80
$0.63 $0.59
$0.58
$0.60 $0.49 $0.48
$0.45
$0.40

$0.20

$0.00
2014 2015 2016 2017 2018 2019

2014 2015 2016 2017 2018 2019

1 Utah County Research & Forecast Report | Mid-Year 2019 | Utah | Colliers International
Research & Forecast Report

UTAH COUNTY | INDUSTRIAL

Mid-Year 2019

Market Overview
By Quadrant

Quadrant Total Bldg SF Avail % Direct Vac % YTD Absorption Lease Rate
Utah County Central 13,062,768 2.57% 2.29% 110,255 $0.64
Utah County North 13,180,368 3.73% 3.19% 468,706 $0.65
Utah County South 12,255,640 4.70% 2.21% 189,342 $0.50
Utah County West 47,630 30.28% 30.28% 0 $0.75
Overall 38,546,406 3.68% 2.61% 768,303 $0.59

Historical Vacancy Rates YTD Completed Construction

By Percentage 843,018 Total Square Feet

6.00%
4.90% 31%
5.00% North
3.80%
4.00% 3.44%
2.86% 2.85% 2.61% Central
3.00% 2.40%
2.00% South 64% 5%
1.00%
0.00%
2013 2014 2015 2016 2017 2018 2019

2013 2014 2015 2016 2017 2018 2019 Market View Map
By Submarket

Significant Transactions
YTD 2019
NORTH
Square Feet Quadrant Tenant/Landlord Lease/ Sold

124,803 North Ace Intermountain Recycling Center Sold CENTRAL

WEST UTAH
80,000 South Maple Mountain Enterprises Leased LAKE

54,648 Central Premier Employee Solutions Leased

44,770 North Asea Leased

SOUTH
32,090 North TKS Co-Park Manufacturing Leased

2 Utah County Research & Forecast Report | Mid-Year 2019 | Utah | Colliers International
 Population
Utah has a strong internal birth rate that increases the
statewide population year-over-year, but a steady increase in
immigration over the last several years is having more of an
impact than ever before. For the past several years, economic
growth in Utah has added between 40,000 and 60,000 people
to the state each year, with an annual population growth rate
of 1.9 percent.
Source: Department of Workforce Services
Manufacturing
Utah County is an excellent location for manufacturing, with a
vibrant workforce, affordable utilities, access to the Union
Pacific rail lines and national interstates, and room to grow.
Some major manufacturers in Utah County include Blend Tech,
Klune Industries, SAPA, DoTerra, UIS, Wavetronics, Temkin
International and IM-Flash.
Source: Utah Valley Economic Partnership

FOR MORE INFORMATION CONTRIBUTOR

Megan Grangroth Kathy Sturzenegger Jaden Malan

Office Research | Utah Communications Coordinator Industrial Specialist
+1 801 453 6822 +1 801 947 8300 +1 801 947 8381
megan.grangroth@colliers.com kathy.sturzenegger@colliers.com jaden.malan@colliers.com

Colliers International | Utah

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