As I talk with investors from around the country, many are looking at Utah for the first time. These investors are weighing the stability of their property investment with the potential for growth. While Utah has historically not seen the extreme pricing shifts that other markets in the country have, it has continued to provide strong, stabilized growth for those willing to place their money there.
Commercial real estate in Utah continues to outperform the national economy. Utah boasts significantly lower unemployment and vacancy and has performed steadily through some turbulent times. The national media has recognized Utah for its economic performance in recent years:
In addition to these accolades Utah was recognized in the July/August issue of Business Facilities Magazine as one of the best overall states in this industry with #1 rankings for “Best Business Climate” and “Quality of Life” and top 10 ranking in several other categories.
I have provided a segment of the 2011 Forbes Article Below:
“Utah repeats this year as Forbes Best State for Business and Careers in our sixth annual look at the business climates of the 50 states. No state can match the consistent performance of Utah. It is the only state that ranks among the top 15 states in each of the six main categories we rate the states on.
Utah highlights include energy costs 31% below the national average and employment growth that has averaged 0.6% the past five years. Compare that to the U.S. as a whole where job growth has averaged negative 0.6% since 2005. Utah’s 5% corporate tax rate is well below western neighbors Arizona, Idaho and New Mexico. Utah ranks sixth in a new Tax Foundation study that looks at the tax burden on business in each state across different industries. As part of the ranking, we included the study which will be released to the public in the coming months.
Businesses are getting the message on Utah. Procter & Gamble, ITT, Home Depot and Boeing all announced expansions in Utah this year. The Goldman Sachs office in Salt Lake City is its second biggest in the Americas with more 1,000 employees and significant expansion expected over the next four years.
Technology companies particularly have had Utah on their radar as an affordable alternative to California with overall business costs in Utah 10% below the national average. Adobe Systems, eBay, Electronic Arts and Oracle have all expanded in Utah in recent years.
Companies are also attracted by Utah’s population growth which is one of the fastest in the country and provides a burgeoning workforce. “Utah has a young, dynamic economy with a vibrant high-tech sector,” says Mark Zandi, chief economist of Moody’s Analytics.
The Utah story is far from over. Job growth is projected to be 2.4% annually through 2015 according to Moody’s, sixth best in the country (for more states with strong job growth forecasts, see “The Best States for Jobs“).”
It is interesting to see many investors from around the country looking at Utah for the first time for property investment. Many are adding Utah to their property investment horizon and many more are expected to in the coming years. If you do not already own property in Utah it may be a place that you want to check out.
I appreciate you taking the time to visit this Utah Property Investors. The intent of the blog is to congregate all of the information that a property investor in commercial real estate would need to know in order to make educated decisions on acquiring or disposing of commercial real estate in Utah.
Over the coming year the blog will address the following topics:
I hope that you will use the information, insight, and ideas as a valuable resource in your business.
Brandon L. Wood, CCIM
President | Principal Broker
The Northwood Group
Quarterly, we receive construction cost estimates from Bonneville Builders. While it is difficult to make accurate estimates without an understanding of the specific project, it is helpful to have some ballpark figures to run as estimates, especially as you are looking at potential re-tenanting costs, etc. when considering a commercial real estate investment deal. Click on the link below for the table. I hope that you find this helpful.