Salt Lake City Office Market
Office occupancy in the first half of 2023 contracted by 19,364 square feet. Net absorption losses have slowed down in recent quarters but are expected to continue throughout 2023 and into 2024 with many companies reducing footprints at renewals by an average of 42.6% or searching for reduced square footage for new space.
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Net absorption in the first half of 2023 measured 2.6 MSF, down over 35% from 2022 on an annualized basis and more in line with the net absorption experienced during the pre-pandemic years of 2017 to 2019.The 9.7-MSF construction pipeline trended downward for the third consecutive quarter; construction deliveries are historically high, while new construction starts are sharply decelerating. Vacancy increased to 3.3% as deliveries modestly outpaced net absorption. Asking rent growth was flat from the fourth quarter of 2022 to the second quarter of 2023, down 1.3% from $10.17/SF to $10.04/SF.