- Overall Vacancy Rises But It’s Still Lower Than Historical Average
The overall vacancy rate, including sublease, increased 100 bps quarter-over-quarter (QOQ), and climbed 180 bps year-over-year (YOY) to 3.8% in Q2 2023. The current vacancy is modestly lower (-30 bps) than the five-year average of 4.1%, and well below the historical high of 8.9% recorded after the last recession in 2011.
- Warehouse/Distribution (W/D) Saw the Highest Leasing Activity
Leasing activity remained active during the second quarter at 1.9 msf, excluding renewals, compared to 1.1 msf in Q1 2023. W/D space accounted for 95% of the total leasing activity in Q2 2023.
- Asking Rents Continue to Rise
The average asking rent for all product types combined was $0.78 per square foot (psf) per month on a triple net basis, a 1.2% increase QOQ and 11.4% YOY.
- Construction Pipeline Remains Active
Salt Lake City’s development pipeline remains active with 6.8 msf across 22 new projects currently under construction, 91% of which are SPEC buildings, with 19 slated for delivery in the second half of 2023.
- Net Absorption Increases Substantially
Tenants absorbed 1.4 msf across all product types in Q2 2023 compared to 800,000 sf during Q1 2023, bringing the year-to-date (YTD) total absorption to 2.2 msf.