Competition for housing in and around St. George’s has always been intense, but with most commercial property vacancy rates at or below 1% in 2022, competition between businesses is expected to intensify.
Commercial space in Southwest Utah is tighter than ever, with office and retail vacancy rates around 1%, according to a new mid-year report from NAI Excel. and industrial spaces below 1%. He regularly posts updates on commercial real estate from Las Vegas to the Wasatch front.
There is some uncertainty about the future of the market given rising interest rates, high construction costs and currency inflation, but the combination of rapid population growth, educational opportunities and quality of life in the St. George area means it remains as attractive as ever. NAI chief operating officer Jon Walter said the companies are looking to relocate or expand in the area.
Walter said a number of major projects are currently under construction, including large medical offices and a massive expansion of commercial space in the Quail Creek industrial area, which could help meet some of the demand. growing space, but the market remains very tight.
“There is still a serious shortage of properties to buy,” he said. “It’s very difficult to move into an existing building. It’s getting easier and easier to find land, but there are still a lot of challenges.
All that scarcity is driving up rents, with offices costing $17 a square foot. Retail space is even more expensive, at over $20 per square foot.
The lack of space reflects long-term trends in the area’s housing market, with median home prices up more than 25% over the past year and rents for condos and other multi-family units rising. by 14% between the end of 2021 and mid-2022. The NAI report shows that more than 1,000 new units are under construction.
A major factor moving forward could be the federal government’s continued efforts to combat the effects of inflation, Walter said. He noted that recent efforts to shrink the economy have led to higher interest rates for borrowers and that some businesses are unlikely to go ahead with expansion plans unless it has. financially meaningless.
Still, the demand for new space suggests the area remains attractive for business.
Southwestern Utah has seen the fastest new job growth in the United States over the past year, and despite a general slowdown in the national economy, the state continues to find new places work for workers.
Utah’s nonfarm payrolls increased 3.5% in the 12 months from July 2021 to July 2022, creating more than 56,000 new jobs. The statewide unemployment rate is just 2%.
“High inflation and now two straight quarters of declining gross domestic product (GDP) typically accompany declining employment,” said Mark Noord, chief economist at the Labor Services Department of the Labor Services Department. Utah. “But employment growth was strong in July. This is not the case at the national and state level.
David DeMille writes about southwestern Utah for The Spectrum & Daily News, the St. George-based USA TODAY Network newsroom. @SpectrumDeMille Or contact him at [email protected] To support and perpetuate this work, thank you Subscribe today.