Industrial Sector

The industrial real estate sector saw a notable decline in the number of mega leases of 1 million square feet or more signed in 2023 compared to the previous year. Factors such as economic uncertainty and reduced demand for additional inventory played a significant role in this trend. Among the top 100 industrial leases, only 43 met the mega lease threshold, down from 63 in 2022. Despite this decline, there were notable shifts in tenant composition, with third-party logistics operators gaining traction while traditional retailers saw a decrease. However, there is optimism for 2024, with expectations of increased demand for mega distribution centers as economic conditions stabilize and construction activity rises.

Economy

In 2023, the resilient U.S. economy defied recession predictions, navigating challenges like rising interest rates with strong labor markets and consumer spending. Utah mirrored this trend, maintaining robust economic performance throughout the year, marked by its highest labor force participation rate since 2010. However, high housing costs posed challenges for renters and prospective homebuyers, potentially impacting Utah's middle-class prosperity. As 2024 unfolds, the U.S. economy faces uncertainties in inflation, interest rates, labor markets, household wealth, federal debt, geopolitical events, and consumer sentiment. Despite these challenges, Utah's Economic Council projects continued growth in 2024, anticipating slowing inflation, moderate job market expansion, and potential residential construction rebound.

Blog from Matthew Simmons

Welcome Holcim!

I am so excited for the completion of the new rail served 650,000 square foot HolcimUS manufacturing facility at Copper Crossing! This development has set a new high-bar in the market with cutting edge technology, innovative environmental products/design and sustainability. We feel lucky and very grateful to be on the team with the incredible industry leaders at Riverbend Management, Inc. and Big-D Construction on this project.

Is the Party Really Over?

Is the party really over???

If 2021-2022 were the years of the big feast, then 2023 was the year of the leftovers, and 2024 will be the year of taking inventory, re-stocking and getting ready for the next big party!

I love this chart that our data wizard Jay Flynn put together for us.

It shows the number of deals by year and by size increment, with an overlay of vacancy by year. Check this out and let me know what you think it forecasts? Regardless, I am dusting off my old ABBA vinyl for a disco shindig in 2025!

Trend to Follow

Utah's population has surged to 3,456,482 in 2023, marking a 1.65% year-over-year growth from 2022. Notably, the dynamics of population increase have shifted since 2021, with net migration emerging as the primary driver of Utah's growth.

In the years 2022 and 2023, 39% of the new population was concentrated in Utah County, while Salt Lake County accounted for 24.7%. The noteworthy rise in net migration serves as a crucial barometer of the state's economic strength and quality of life. Utah's allure lies in its favorable economic conditions and stunning mountainous landscapes, prompting a transition from natural births as the primary growth factor to net migration taking the lead.

The Kem C. Gardner Policy Institute plays a pivotal role in providing insightful research on our state, contributing significantly to our understanding of population trends and statistics. Positioned strategically, Utah is attracting considerable interest, and the prospect of the state's prosperity is both promising and exciting.