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Salt Lake City Office Five Fast Facts | Q2 2023

Rebecca Lloyd • 7/26/2023
The overall vacancy rate, including sublease, increased year-over-year (YOY) from 17.8% to 22.5% in Q2 2023.
  1. VACANCY, SUBLEASE AVAILABILITY REMAIN ON THE RISE 
    With the uptick in vacancy over the last year, the Q1 2023 overall average asking rent for all classes decreased $0.69 per square foot (psf) or 2.6% year-over-year (YOY) to $25.92 psf on an annual full-service basis. However, the overall average rent for Class A increased 2.7% YOY to $29.20 psf on an annual full service basis. 

  2. LEASING ACTIVITY REMAINS SLOW BUT HIGHER THAN LAST QUARTER 
    Salt Lake City leasing activity in Q2 2023 remains slow, with only 539,500 sf of new deals signed. This is a 12% decrease YOY from Q2 2022, but a 40% increase from Q1 2023, which saw only 385,000 sf of new deals signed. 

  3. OVERALL ASKING RENTS INCREASE, CLASS A ASKING RENTS DECREASE 
    The overall average asking rent for all classes increased $0.16 or 0.6% YOY per square foot (psf) to $25.84 psf on an annual full-service basis. However, the overall average asking rent for Class A decreased 3.6% YOY to $28.97 psf. 
  1. NET ABSORPTION CONTINUES TO TREND NEGATIVE  
    Absorption continues to be heavily impacted by downsizing and tenant move-outs, resulting in 687,000 sf of negative net absorption in Q2 2023. 
  1. UNDER CONSTRUCTION PIPELINE IS SLOWING SIGNIFICANTLY 
    The office construction pipeline is slowing significantly, partly due to tightening lending conditions, with 648,468 sf currently under construction across eight projects, and only 39% pre-leased. 

5FastFacts_Q2-2023SaltLakeOffice-2

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