Time for another quick update on the St. George area commercial real estate market along with some national trends we are seeing.
Overall the market is still very strong in both leasing and sales activity for retail, industrial, land and office. Each sector has its own nuance so let’s look at each.
Industrial Updates
On the leasing side, we are still seeing rent rate growth, but not at the record pace we have witnessed over the last few years since the recession. Rates are still very strong with good absorption across the board on spaces 2,500-15,000sf.
A few larger spaces have hit the market for lease recently adding to some existing inventory in the 20,000sf+ range with asking lease rates in the $0.55sf NNN range.
We are working on the final lease for Beehive Industrial Beehive Building 1, having absorbed 70,000sf of multi-tenant space in the last year.
On the sale side, we have seen a pretty healthy appetite from buyers. We have sold nearly all of our listings including the former Stock Components building on 3050 E to Straight Stripe (congrats to those guys on a great new facility!), the former Kenworthy Monuments building, a 30,000sf manufacturing facility, and have under contract a 50,000sf manufacturing facility and a 10,000sf industrial building near Costco.
Still looking to buy industrial?
There are a few deals that have just come out to market.
We have a 12,700sf industrial property consisting of a 7,700sf building and a 5,000sf building with residual income.
You could occupy the 7,700sf building and buy the whole property with a net payment of around $2,700- $2,800/mo. I also have a 30,000sf manufacturing building priced at $30sf in Hildale.
Call me if you are interested in either.
Retail Updates
The retail market continues to show growth mainly centered around the new grocery anchored locations. Rents and sales are strong.
Like industrial, the rental growth rate trajectory has tapered somewhat, but is still strong for the Class A/Anchored spaces.
The Red Cliffs Mall came under new ownership recently and should have some exciting news coming up soon on the former Sears space.
We are still waiting on Zupas to start construction in the former Brick Oven space on River Rd & St. George Blvd. Word has it that construction will begin within the next 6-8 following a redesign on the building. Zupas has generated more buzz than any other restaurant in recent memory. We are excited to have them come to St. George.
Office Updates
Office rents continue to climb. We have seen solid absorption across the different classes of office space in the market with the majority of the activity centered in the 1-3,000sf range.
The two co-working spaces in the market have both seen success with the Unicorn Hatch Labs seeing the most activity and demand.
Office sales have also been healthy with a lack of availability of the smaller office buildings for sale causing increased demand.
If you have space and are looking to sell, contact us and we can help.
Land Updates
Land along I-15 in the heart of St. George continues to be a precious commodity. There are very few parcels left between the Bluff Street and Green Springs exits. Those available are commanding increasingly higher prices.
This pressure is helping open up activity on Exits 2 (Southern Parkway), Washington Parkway and the Hurricane exits.
We expect growth to continue on these exits with new retail and office uses to be announced soon with other development to follow.
In town commercial land sales along the busy corridors and near the new grocery anchored developments are robust.
Other Important Updates
What about the hospitality/VRBO sector?
As I have mentioned in the past, we have had over 1,300 keys added to the market in the last 2-3 years along with another 1,300+ rooms.
There are a few more hotels still scheduled to come to market. I think it’s time for that sector to take a breather for a minute and allow the absorption to catch up to the new construction.
I would be very selective if you are considering a new hotel in the market and make sure that the pricing, amenities and location are an exact fit.
On the multifamily side, rents continue to rise. A handful of new projects have been announced to help fill the supply/demand gap.
If you have specific questions or are looking to buy, sell or lease commercial real estate, call us or check out our new website at linxcre.com.
Have a fantastic April!
Travis Parry, SIOR, CCIM
Partner – LINX Commercial Real Estate