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News release

SALT LAKE CITY, UT

As U.S. Office Market Builds Confidence, Salt Lake City Blazes Through Construction Lull

In the third quarter 2013, Salt Lake City mirrors the national shift to a landlord-favorable market, driven by the booming construction industry


Salt Lake City, Nov. 05 2013 — The third quarter 2013 marks the first time in seven years that the United States office market can look more confidently toward 2014 with leasing activity, pricing picking up at a faster pace, and more sustainable rates across the nation. Salt Lake City, one of the Jones Lang LaSalle’s corporate offices continues to grow its new, yet leading reputation as reflected in the strong third quarter completing nearly 40 transactions totalling 255,059 square feet.

The national Third Quarter 2013 Outlook Report’s trends ring true in Salt Lake City:

  • Rental rates:
    o    National: Nationally, office rents are up, and concessions are down – even in secondary and tertiary markets – turning the office market into landlord-favorable territory
    o    As stated above, Salt Lake City reflects a slightly different result as office rents have fallen slightly in the third quarter 2013. Despite this dissimilarity, Salt Lake City experts say the office market is shifting toward a landlord-favorable market with few concessions being offered
  • Rent:
    o    National: Growth of 1.4 percent was the highest quarterly jump of the recovery, annualizing at a rate of 5.6 percent
    o    Salt Lake City rents have fallen -1.0 percent , however this decline is not expected to continue
  • Absorption levels:
    o    National: The U.S. continues with the 14th consecutive quarter of occupancy growth, the last two quarters above historic norms
    o    Salt Lake City’s third quarter 2013 absorption was positive. A total of 650,638 s.f., pushing vacancy further down and shedding a positive light on 2014

“There is resurging strength in the U.S. office market, buoyed by improving fundamentals and a pick-up in expansion activity across diversified industries and geography,” said John Sikaitis, Director of Office Research for the Americas at Jones Lang LaSalle.

Increasing construction activity, which represents expansion, proves particularly true in Salt Lake City where over 485,000 s.f. of space are under construction, 32 percent of which are pre-leased. As a whole, the U.S. office construction pipeline is beginning to pick up, surpassing the 50-million-square-foot mark for the first time in six years.

Significant transactions in the third quarter 2013 for the Salt Lake City office:
Orient Overseas Container Line: Jim Balderson and Jesse Mangum represented the corporate headquarter relocation of Orient Overseas Container Line (OOCL) in a transaction totalling 48,870 s.f.

Medicity: Mark Alexander, Jim Balderson and Jesse Mangum represented Medicity on its 25,000 s.f. relocation. Medicity leased the top floor of 257 Tower.

Mardian Crane: JLL represented Mardian Crane in the purchase of the former Cal Brown Auto Facility. The transaction totalled 12,000 s.f. on a 4.00 acre site.

RPS Composites: Wick Udy assisted the move of RPS Composites, a national composite company out of Canada, into their new facility in North Salt Lake City at a transaction total of 22,000 s.f.

Looking ahead to the fourth quarter and beyond, Sikaitis says, “The U.S. office market is poised to maintain its recovery as the geographic spread widens. Keep an eye on external economic influences particularly on the U.S. political front as potential thwarts to the current momentum.”

“The majority of leases completed require significant tenant finish build-out which is supported by Jones Lang LaSalle’s Project and Development Services team.” Jim Balderson said. He added: “With businesses experiencing growing demands to open expansion facilities following a strict timeline and budget, it has been crucial for the Jones Lang LaSalle Salt Lake City team to have Project and Development Services be integrated into the real estate process.” John Cracraft, Senior Vice President of Project and Development Services commented, “We remain bullish on Salt Lake City and the entire Wasatch front. We are growing our presence to include Project & Development Services by adding project managers that will focus on managing client projects and supporting our growing brokerage team in Salt Lake City.”

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.