Office vacancy in Salt Lake City metro climbs
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Office vacancy rates in the Salt Lake City metro area reached 19.5% in the second quarter of 2024, a nearly 3% increase since late 2019 before the pandemic transformed office norms, according to Moody's.
Why it matters: Typically, vacancy rates rise in economic downturns. But it's outside the normal pattern that they've been going up for the past few years as the economy has remained on solid ground.
State of play: The office vacancy rate downtown was about 24% during the second quarter of 2024, per an economic report compiled by Downtown Alliance.
- High-end workspaces downtown remain in demand, though, because employers are leasing sites near restaurants, retail, and live performance venues to attract and retain talent.
- The vacancy rate for those workspaces was about 19.6%.
Yes, but: The pandemic seems to have permanently changed the way many Americans work, and companies don't need as much space as they once did.
- Some buildings are converting their underused offices into living spaces.
- At least six older office buildings in downtown Salt Lake are being converted into multi-family housing complexes, per the report, in the wake of Utah's housing crisis.
Zoom out: Nationally, these vacancy rates are likely to continue to climb for the next few years, peaking at the end of 2026, per Moody's projections. If the economy moves into a downturn, things could get even worse.
The bottom line: There's "just going to be pain over the next coming years," he says.