According to a report from the International Council of Shopping Centers, retail property sellers accepted lower offers, and bankers loaned out more money to buy, develop and refinance retail properties in the first quarter of 2010 than in the same quarter in 2009, according to the Mortgage Bankers Association. Some $3 billion worth of retail properties priced at $5 million or more were sold in the U.S. during the quarter, up 40 percent from $2.2 billion a year ago. But this is far below the first quarter of 2007, when some $19 billion was traded.
The average price per square foot for the quarter was $147, down 3 percent from the first quarter of 2009. In first-quarter 2007 the average was $181 per square foot. First-quarter 2010 cap rates rose considerably, to 8.3 percent, versus 7.4 percent a year ago and 6.6 percent for first-quarter 2007.
But the availability of loans has eased. The average loan was $14.5 million in the quarter, compared with $11 million a year ago.
Contrast that with the report in the Deseret News this morning about Salt Lake's office rates. According to CB Richard Ellis' Mid-Year Report, vacant office space in Salt Lake County increased to a six-year high in this year's second quarter.
By the end of June, the office vacancy rate in Salt Lake County was 17.3 percent, up from 14.2 percent in mid-year 2009. At present, there is roughly 5.2 million square feet of vacant office space in Salt Lake County, up from 4.2 million square feet of vacant office space a year ago, according to a media release from CBRE.
That means landlords are offering incentives, such as lower lease rates and increased tenant improvement allowances, according to Mark Bouchard, senior managing director of CBRE's Salt Lake office.
The increase in vacant office space can be traced to tenants' downsizing their space requirements, according to Tab Cornelison, office specialist with CBRE. As leases expire, companies give up unoccupied space.
Murray and West Jordan had the highest office vacancy rate at 23.5 percent, according to the report. The Research Park region had the lowest vacancy rate at 2.9 percent. Downtown Salt Lake City's Central Business District ended the quarter with a slightly-above-average 18.5 percent vacancy rate.
(Source: Rebecca Palmer, Deseret News)