Utah Industrial Market Attracting More Institutional Money

Cole Corporate Income Trust announced this week the purchase of seven new assets including a 150,000 square foot distribution facility leased by Fedex Ground in Salt Lake City. Why should Salt Lake be on the radar for national institutional money? Although Salt Lake City is only number 48 in terms of size of population in the rankings of metropolitan areas, it is ranked number 14th in square feet per person of national warehouse markets on the path of goods movement.  Due to Salt Lake’s position on this pathway, moving materials to manufacturers and from manufacturers to retailers, it contributes to keeping demand for warehouse space high and vacancies low. It is also one of the reasons why Industrial Real Estate in Utah will continue to attract institutional investment.

Fiscal Cliff Resolution?!

Congress has given the markets some much needed clarity in regards to the fiscal cliff and taxes. Some of the highlights in the news from the recent congressional action include:

• A permanent extension of the Bush tax cuts for the middle class
• An increase in taxes for couples earning over $450,000 (individuals earning $400,000) from 35% to 39.6%
• An increase in the dividend and capital gains tax rates for couples earning $450,000 ($400,000 for individuals) from 15% to 20%

o    (plus a 3.8% surcharge for the Affordable Care Act (aka Obamacare)

• An increase on estate tax from 35% to 40%, with an exemption up to $5,000,000 per couple
• A permanent fix to the Alternative Minimum Tax with an index to inflation
• An extension of the unemployment benefits for another year
• No extension of the temporary 2% payroll tax cut from the Bush era

One of the biggest benefits of the decisions of the last few days is some decisions were made and market uncertainty in some regards has been eliminated. Still left on the agenda for congressional action:

• No resolution to the $110 billion  in spending cuts that was to be enacted January 1, 2013 as part of sequestration (postponed for two months)
• No increase to the debt ceiling, which also needs to be addressed in two months

SIOR of the Year Award Luncheon

We would like to send a big congratulations to our own Michael Jeppesen for the successful execution of the first ever “Utah SIOR of the Year Award Luncheon” this past Wednesday. As president of the Utah SIOR chapter, Michael came up with the idea for the event as a way to bring recognition to the accomplishments of some of the Utah SIOR Chapter Members. The event brought together who we believe to be the best in class of the Utah Real Estate Market including, SIOR Chapter Members, Developers, Owners, and fellow Real Estate Practitioners. 

We could not be more proud of Michael and his success with this first ever event!

Client Highlight - Permalok

Industrial Intensification

This week I read the Best Practices for the Intensive Use of Industrial Land Discussion Paper written for the Vancouver Industrial Market.  The paper discusses the challenges faced as populations grow and land is scarce for industrial development, developers and communities must become more creative to better utilize industrial sites and make them more efficient.  While Salt Lake and Utah still have plenty of commercial and industrial real estate available for the near term these ideas and practices are affecting many markets across the world and with our growth rates it isn’t too soon to begin planning ahead.

The paper touts the benefits of this intensification explaining that it provides “the opportunity to accommodate increased economic and employment activity on a limited land base, more efficient use of lands and resources, reducing impact on the environment, using transportation infrastructure more efficiently, extending the lifespan of available industrial lands, and reducing the pressure to convert agricultural and rural lands to industrial uses.”Take a moment to peruse the discussion paper here and explore the world of evolving industrial buildings.