Monday Report
Utah Real Estate Snapshot August 4th, 2008

Bonneville Research Website






Salt Lake County

Office Market
  • Vacancy: 11.29%
  • Average Lease Rate: $19.98
  • Completed Construction: 163,282 SF
Industrial Market
  • Vacancy: 5.62%
  • Overall Lease Rate: $0.41
  • Completed Construction: 1,887,976 SF
Retail Market
  • Vacancy: 7.83%
  • Rents: $21.18
  • Completed Construction: 627,246 SF
  • Absorption: 354,013 SF
Multi-Family Market
  • Vacancy: 4.6%
  • Rents: $793
  • Construction: 485 Units

Utah County

Office Market
  • Vacancy: 10.50%
  • Lease Rate: $8.00 - $22.00
Industrial Market
  • Vacancy: 3.37%
  • Lease Rate: $0.48 - $0.85
Retail Market
  • Vacancy: 4. 26%
  • Lease Rate: $8.00 - $32.00

Weber County

Office Market
  • Vacancy: 23.44%
  • Lease Rate: $12.47 - $14.13
Industrial Market
  • Vacancy: 7.47%
  • Lease Rate: $0.40 - $0.44
Retail Market
  • Vacancy: 12. 71%
  • Lease Rate: $13.56 - $15.74
Multi-Family Market
  • Vacancy: 11.0%
  • Rents: $668

Davis County

Office Market
  • Vacancy: 12.3%
  • Lease Rate: $12.85 - $15.12
Industrial Market
  • Vacancy: 11.08%
  • Lease Rate: $0.51 - $0.55
Retail Market
  • Vacancy: 9. 76%
  • Lease Rate: $13.56 - $15.74
Multi-Family Market
  • Vacancy: 0.76%
  • Rents: $675

Summit County

Office Market
  • Vacancy: 8.12%
  • Lease Rate: $15.00 - $28.00
Industrial Market
  • Vacancy: 0.43%
  • Lease Rate: $10 - $18
Retail Market
  • Vacancy: 3.66%
  • Lease Rate: $17.00 - $45.00

Washington County

Office Market
  • Vacancy: 11.0%
  • Lease Rate: $13.20 - $18.00
Industrial Market
  • Vacancy: 6.0%
  • Lease Rate: $2.75 - $5.75
Retail Market
  • Vacancy: 5.4%
  • Lease Rate: $12.00 - $28.00

Source: Commerce CRG, Mid-Year Report

Foreign clothing shops to grow in U.S. malls

  • Moderately priced, international apparel retailers are expanding their portfolio in U.S. malls as American chains such as Ann Taylor and Talbots close stores. H&M, lululemon athletica, Zara, Mango and Who.A.U all plan to open new locations.

Source: Retail Traffic Online

Retail Construction Hits A Red Light

  • Consumers are checking discretionary spending and, seemingly everyday, new retailers come out with announcements that they are filing for bankruptcy, shuttering stores and constraining expansion plans. As a result, construction is coming to a screeching halt at projects across the country as developers reevaluate proposed centers' economic viability.
  • Poag & McEwen Lifestyle Centers scrapped plans to build Boise, Idaho's first lifestyle center, a 200,000- square-foot, $50 million project. The developer initially had planned to open the center in 2009. Now the project no longer appears on the company's list of new developments on its Web site. Poag & McEwen did not return calls seeking comment.

Source: NREI Newsline

Reduced Credit Availability Stalls Hotel Construction

  • As hotel owners and investors continue to fight a slowing economy and the declining availability of credit, the lodging industry faces a number of challenges that it hasnˇ¦t seen since the months following 9/11.
  • Diminished access to credit for hotel projects is creating a drag in the pipeline, according to a second- quarter construction pipeline report from Lodging Econometrics. The Portsmouth, N.H., hotel research company reports 381 project construction starts, totaling 47,107 rooms, at the end of the second quarter, down by 78 projects and 4,757 rooms compared with the first quarter.
  • In another sign of changing developer sentiment, Lodging Econometrics finds that there has been a high level of project cancellations. In the second quarter, 327 projects totaling more than 48,000 rooms were canceled. This is the highest number of cancellations since the fourth quarter of 2001 following the aftermath of 9/11, when the lodging industry went through one of its darkest periods in recent times.

Source: ICSC Online


Utah Real Estate Report - Office, Industrial, Retail & Multi-Family

  • Who is up?
  • Who is down?
  • Who is just holding their own?

Commodity prices dive!

Bob Springmeyer

Bonneville Research

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    Bonneville Research
    • Biggest dive for commodities in 28 years
    • Commodities prices suffered their largest monthly drop in 28 years in July as crude oil prices nose-dived more than $20 from an all-time high of $147.27 a barrel.
    • The Jefferies-Reuters CRB index, a global commodities benchmark, lost 10 per cent, its largest monthly decline since it fell 10.5 per cent in March 1980, amid worries about lower economic growth damping demand for raw materials.
    • Natural gas - down 31.4%
    • Corn - down 19.2%
    • Petroleum - down 9.7%
    • Copper - down 5.2%
    • Global Business Confidence
    • The global economy continues to skirt recession according to the business confidence survey. While the U.S., European and Japanese economies are contracting moderately according to the survey results, the Asian economy continues to experience growth that is near its potential and South American growth is just below potential. Pricing pressures remain very elevated and businesses remain anxious about their weak sales. Hiring intentions and investment spending are soft but remain stable.
    • The Conference Board Consumer Confidence
    • The Conference Board index of consumer confidence rebounded slightly in July, rising to 51.9 from June's 51.0 (revised from 50.4). The expectations component of the index led the gain, while the component measuring sentiment about the present situation fell fractionally. Assessments of labor market conditions deteriorated further.
    • GDP
    • Real GDP increased 1.9% in the second quarter at an annualized rate, below the consensus expectation for 2.4% growth. Over the past year, real GDP has increased 1.8%. Growth was 0.9% in the first quarter, revised downward from 1% last month. Relative to the first quarter, trade and consumer spending were positives for growth; there was also a smaller decline in homebuilding. Somewhat offsetting these positives was a large drop in inventories. Thursday morning's release also included the annual revisions to the GDP data. These show that output fell in the fourth quarter of 2007. Average annual growth for 2004 to 2007 was revised downward by 0.1 of a percentage point, to 2.6%. The data point to an economy that is struggling but still expanding.
    • Agricultural Prices
    • The All Farm Products Index of Prices Received by Farmers rose 1.9% in July from a month earlier. The crops index increased 1.6% and livestock prices were up 0.7% Farmers received higher prices for cattle, soybeans, broilers and sweet corn. Prices fell for eggs, wheat, tomatoes and cucumbers. The farm price index is 16% higher than in July 2007. Food commodities prices were up 1.3% on the month and 17% for the year. The July Index of Prices Paid by Farmers was up 1.1% this month from June and is 18% higher than a year ago. Farmers paid more for potash, phosphate materials, nitrogen fertilizers, mixed fertilizer and diesel fuel. Feed concentrates, feeder pigs, trucks and other machinery were less expensive.
    • Monster Employment Index
    • The Monster Employment Index recorded a sharp decline in July, dropping six points to 157. Seasonal factors likely played a part in the decrease. The index fell by 14.2% from a year ago, a greater rate of annual decline than June's 12.4% fall, which indicates further weakening in the nation's labor market. In addition, all nine census regions reported a decrease in online job availability over the month, as did 16 of the 20 industries tracked by the index.
    • Employment Cost Index
    • Employer costs rose 0.7% in the second quarter, matching the gain of the first quarter. Wages and salaries increased 0.7%, while benefit costs rose 0.6%. These increases extend the moderation in labor compensation, a trend that is expected to persist throughout the remainder of the year. Thursday's report is good news from a policy perspective, since tame wage pressures will enable the Federal Reserve to hold rates unchanged.
    • Jobless Claims
    • Initial claims for unemployment insurance rose sharply to 448,000 in the week ending July 26, compared with the previous week's 404,000. The increase puts claims at their highest point since 2003. This surge in initial claims overstates the weakness in the labor market, as the government's recently extended unemployment benefits. Not all unemployed workers file for benefits, therefore, the increased awareness brought on by the extension could be leading those laid-off to file for the first time. That said, the labor market remains fragile and the environment for hiring remains restrictive.
    • Case-Shiller Monthly Home Price Index
    • House prices declined in May. Both the 10-city and 20-city composite S&P/Case-Shiller house price indices posted record year-ago declines, although each posted a smaller percentage decline on a month-ago basis than in April. The 10-city composite index dropped 16.9% from March 2007 and the 20-city composite fell by 15.8%. However, from April to May, the 10-city index dropped by about 1%, a smaller monthly decline than April's 1.5% fall. The 20-city composite also slowed over the month, dropping a modest 0.9%. Prices in 13 metro areas fell from a month ago.
    • MBA Mortgage Applications Survey
    • The MBA market composites finished down for the week ending July 25. The market index fell by 14.1% for the week. Most of this fall was due to the refinance index, which fell by 22.9%, but the purchase index also lost significant ground, with a 7.8% loss. Activity on the demand side of mortgage markets remains at a near comatose level because of the continued deflationary trend and relatively high contract rates.
    • Chain Store Sales
    • Chain store sales increased 1.2% in the week ending July 26 according to the ICSC. This solid gain followed four consecutive small gains and was the largest weekly gain since early June. However, year- over-year growth rose only slightly to 2.6% as sales rose strongly in the comparable week last year. Nonetheless, growth was the strongest of the year. Store traffic reportedly improved except for apparel retailers.
    • Natural Gas Storage Report
    • Working gas in underground storage rose by 65 billion cubic feet during the week ending July 25, below consensus expectations of a 69 bcf build. At 2,461 bcf, inventories were 357 bcf lower than a year ago and 12 bcf below the five-year average for this time of year.
    • Oil and Gas Inventories
    • Crude oil inventories fell by 0.1 million barrels for the week ending July 25, according to the Energy Information Administration, less than expectations of a 1.6 million barrel decline. Gasoline inventories fell by 3.5 million barrels, contradicting estimates of a 0.2 million barrel build. Distillate supplies rose by a robust 2.4 million barrels, surpassing expectations. Refinery operating capacity inched higher to 87.2% from 87.1%. Total domestic petroleum demand rose. This report is bullish.

    Source: 2008

    • Lumber Liquidators
    • Lumber Liquidators operates 134 locations nationwide in 42 states.
    • The company, which is the largest direct retailer of hardwood flooring, with products sold to individual homeowners and contractors, occupies spaces of 5,000 sq.ft. to 6,000 sq.ft. in strip centers, warehouse spaces or flex spaces.
    • Growth opportunities are sought nationwide during the coming 18 months, with representation by The Greenberg Group.
    • Preferred demographics include a trade-area population of 200,000.
    • For more information, contact
      • The Greenberg Group,
      • 1200 West Broadway,
      • Hewlett, NY 11557;
      • Web site:
    • Lowe's Home Improvement
    • Lowe's Cos., Inc. trades as Lowe's Home Improvement at 1,560 locations nationwide.
    • The centers, offering appliances, home décor items, outdoor supplies and furniture, building products and tools, occupy spaces of 165,000 sq.ft. in freestanding locations and power and strip centers.
    • Growth opportunities are sought throughout the Midwest during the coming 18 months.
    • A land area of 165,000 sq.ft. and a garden center are required for freestanding locations.
    • For more information, contact
      • Lowe's Cos., Inc.,
      • 1952 McDowell Road, Suite 101,
      • Naperville, IL 60563;
      • Web site:
    • Ace Hardware
    • Ace Hardware Corp. trades as Ace Hardware at 4,700 locations nationwide and internationally.
    • The hardware stores occupy spaces 10,000 sq.ft. to 15,000 sq.ft. in freestanding locations, endcaps and strip centers.
    • Growth opportunities are sought nationwide during the coming 18 months. Typical leases run five years with options.
    • A vanilla shell is required.
    • Preferred demographics include a population of 10,000 within one mile earning $40,000 as the average household income.
    • For more information, contact
      • Ace Hardware Corp.,
      • 2200 Kensington Court, Oakbrook, IL 60523;
      • Web site:
    • Panchero's Mexican Grill
    • Panchero's Franchise Corp. trades as Panchero's Mexican Grill at 53 locations throughout CO, FL, IA, IL, MD, MI, MN, NC, ND, NE, NJ, PA, SD, TX, VA and WI.
    • The Mexican restaurants occupy spaces of 1,800 sq.ft. to 2,500 sq.ft. in freestanding locations, lifestyle, power and strip centers, regional malls and urban/downtown areas. Plans call for 20 openings nationwide during the coming 18 months.
    • Typical leases run 10 years with two, five-year options.
    • A vanilla shell and specific improvements are required.
    • Preferred demographics include a population of 20,000 within two miles earning $55,000 as the average household income.
    • Major competitors include Chipotle and Qdoba.
    • For more information, contact
      • Nanette Boyer,
      • Panchero's Franchise Corp.,
      • 2475 Coral Court, Suite B,
      • Coralville, IA 52241;
      • Web site:
    • Kitchen Collection
    • The Kitchen Collection, Inc. trades as Kitchen Collection at 200 locations nationwide.
    • The stores, offering a variety of cookware, bakeware, small appliances, marble, ceramics and gadgets for kitchen tasks, occupy spaces of 3,000 sq.ft. to 3,300 sq.ft. in outlet centers.
    • Growth opportunities are sought throughout the existing market during the coming 18 months. Typical leases run five years.
    • A vanilla shell and specific improvements are required. .
    • For more information, contact
      • The Kitchen Collection, Inc.,
      • 71 East Water Street,
      • Chillicothe, OH 45601;
      • Web site:

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    Note from Bob Springmeyer:

    As some of you may know I am the Democratic Candidate for Utah Governor.

    I chose community activist and retired SBA official Josie Valdez to run as my lieutenant governor.

    We now have a staff, lawn signs, bumper stickers available.

    It is my hope that I can continue to send out the Monday Report weekly without interruption.

    The Monday Report has always reflected my business and economic development values.

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    Bob Springmeyer

    The good education, good jobs, good health and good government candidate for Utah Governor

    Election Date: November 4th, 2008

    November 4th, 2008

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