30 Women to Watch
The Best-laid Plans
Between the Lines
A Vote for Change
Desert in Bloom
Commercial Real Estate
A Taxing Situation
In It for the Long Haul
TriFecTa Design: An Eye for the Extraordinary
All in the Family
Left to Your Own Devices
They still don’t have a ton of jobs down there, but it’s the quality of life and it’s a market that is easy to figure out. So we are getting the investors very well sorted out on foreclosures and short sales. It’s quite robust.
EDWARDS: The Family Dollar distribution center is almost a million feet in Fort Pierce. It’s finished now and they are going to do a ribbon cutting for that in the next few weeks. By contrast, Viracon, which is an architectural glassmaker there, has decided to mothball that plant and restructure the whole thing. So there’s a bunch of folks out of work, conveniently at the same time that Family Dollar is hiring right down the street. We are seeing that growth, but not a large-scale industrial project in St. George in almost three years. So it’s really nice that things are showing signs of life now.
SHIELDS: We’re reselling the former Holiday Inn in St. George, which I sold a couple years ago, for probably 30 percent more. And it’s completely backed by increase in gross revenue. That tells you that the tourists are coming back. It’s a substantial increase over what it was. Other hospitality people are experiencing the same thing, which is always a good tell of what is going on with the economy, because those folks spend money.
BOYER: We are working on a small retail hospitality project in St. George and we have seen tremendous interest from the hotel groups. Several new hotels will be built in this location. And then also a lot of restaurants that have been on the sidelines, watching what St. George was going to do—they are coming out of the woodwork and showing interest as well as other entertainment and retailers.
EDWARDS: Cedar City is showing some signs of life, having been hit probably the hardest by the Las Vegas downturn. Cedar had a lot of absentee owners and resort properties, and it’s finally seeing some signs of life. A new industrial project, GAF Roofing, is building a new 50-person operation, which is a big deal for Cedar City. And there’s others, as well.
CHILD: Moab is really busy. Putting a new mini convention center in there, and hotel rooms are going for $250 a night.
Kip, weigh in on the investment side. From your perspective, how are things at this point?
PAUL: The peak of the market in terms of volume was in 2007. The market did about $1.7 billion in sales, which was just an astounding number for us. Not that anybody expects it to return to those type of numbers, but in 2012 the market did $850 million, so about 50 percent of where we were. And in the first quarter of 2013, it did $323 million. So if we can continue that same trend, and that’s a big “if,” we would do about $1.2, $1.3 billion, which in our mind is very much back to a stabilized, fluid, orderly market.
We really don’t have any bad news to report. It’s all positive, it’s all great. It’s a matter of can we find product while, at the same time, looking over our shoulder wondering if we can keep the momentum going.
GRIFFIN: I’d be curious to know the effect on pricing.
PAUL: Values are up, cap rates are down. The first quarter of ‘13 over the first quarter ’12, there’s about half a percent decrease in the cap rate. So prices are absolutely up.
Steve, maybe you can talk about what you are seeing.
PETERSON: Right now we are seeing a lack of product, and particularly in class A office space in the suburbs and the East Bench. There’s also an upward trend on the asking rates. In 2012 Beckstrand put out a 200,000-square-foot building in the Cottonwood district and filled that
up immediately at $33 or $34 a foot effective rate.
Cottonwood Corporate is up to an asking rate of $29 to $30 a foot. We are looking at expanding and finding a location to build an additional building in the suburbs. Due to demand, we have tenants that are 98 percent full and don’t have any room for growth, and we need to accommodate growth for a few of our tenants. So we are finding that part of the market quite strong.
We are also intrigued by the industrial market, and we think there’s a sweet spot there. There’s a lot being done with the bigger boxes, and there’s a 600,000-square-foot building coming up out of the ground in West Valley City. We think there’s a sweet spot from about 50,000- to 150,000-square-foot buildings, so we are working on a project in that area.
Scott, maybe we could ask you to comment on what’s happening at River Park.
BENNION: We are having some of the same challenges that Steve is in terms of occupancy and finding space for growing tenants. We are at 96 percent full, running out of room as well. We broke ground two weeks ago on our last building, 72,000 square feet. And, we had a lot of interest in tenants either wanting to relocate within the park or come into the park at that location.