This story appears in the 2024 Advisor, a publication sponsored by Colliers Utah.
The fast-growing aerospace and defense industry is in a symbiotic relationship with Utah’s commercial real estate industry—each is serving to benefit the other, as growth is pointed steeply upward for both.
That’s good news. Brandon Fugal, chairman of Colliers Utah, the largest commercial real estate firm in the state, shares what Utahns can expect.
“Utah’s defense, aerospace and intelligence sectors drive significant economic development and expansion,” he says, adding that they anticipate future growth and expansion in these same sectors.
At Colliers, Fugal has the privilege of working with Northrop Grumman and BAE Systems on recent expansions at Falcon Hill Aerospace Research Park in Hill Air Force Base (HABF), one of the largest of its kind in the country. In addition, Colliers represented large aerospace and intelligence firms like OmniTeq and VirnetX as they relocated their headquarters to Farmington in 2023.
According to Fugal, Falcon Hill will continue as a center of gravity for future aerospace and defense expansion with hundreds of acres still being master planned on HABF, including both inside and outside fence opportunities.
A mutual dependability
What’s good currently will get better. According to Chris Stewart, former Utah congressman and recently appointed chairman of 47G, the growth taking place now will inevitably lead to improved scenarios. 47G (formerly Utah Aerospace & Defense Association) is the first convening body for aerospace and defense companies in the Beehive State, partnering with the Utah Governor’s Office, World Trade Center Utah, the Utah Legislature and others.
While the state’s economy has been largely tied to the agricultural, energy and tech industries in years past, ups and downs caused by factors like weather or recession have plagued each. The aerospace and defense sector may actually prove to be more dependable than all three put together, pointing to an expected increase in economic stability.
“If you look at defense spending, it doesn’t really trend downward,” Stewart says, adding that any downturn in the economy is not likely to affect the aerospace and defense industry in any noticeable way. Defense spending remains generally consistent year after year, and that’s not expected to change.
“We’ve seen examples where the unfortunate war in Ukraine has led to increases in spending in the defense industry here that some businesses have benefited from,” he continues. “The bottom line is, although we can’t discount the concern of [a recession], aerospace and defense are insulated from that concern. That’s good news for the state of Utah.”
Aaron Starks, 47G’s president and CEO, echoed Stewart’s outlook on the near future. Whether it’s Northrop Grumman’s expansion into Box Elder County or the reinvestment in Ogden Regional Airport, commercial real estate needs are increasing in all cases. Office space will be necessary in the former, and commercial revitalization will accompany the latter.
Wherever expansion and development in the aerospace and defense sector occur, the real estate market will follow.
“I’m confident that more of our economy will be shaped by the aerospace and defense industry than by any other over the next few decades,” Starks said, noting that aerospace and defense currently accounts for a healthy 20 percent chunk of Utah’s economy—$19.3 billion in economic activity from the defense sector alone, according to a report by the Kem C. Gardner Policy Institute.
Solving engineer drought
Aerospace and defense growth throughout the state is expected to lead to more job opportunities, and attracting engineers to the state has been an ongoing problem. Traditionally, supply hasn’t always met demand, and growing engineering capabilities in Utah has been a top priority since 47G’s inception, Starks said. He pointed to Weber State University’s Noorda program as a huge asset to the next generation of aspiring engineers.
“We’re starting to see universities and colleges change their curriculum to help meet the requirements of this industry,” he said, noting an uptick in support from higher education.
A workforce leader
Looking beyond commercial real estate, Starks believes the growing aerospace and defense sector will allow for growth in other ways, especially in creating additional jobs. According to Starks, this is integral to the future of Utah’s economy, and roles will largely focus on deep tech, including aerospace defense, cybersecurity, machine learning and data analytics.
“This is the tech industry in Utah,” he said. “As we look at the next decade, we want to create a movement of people coming into the industry from university and college campuses—the next generation of talent being recruited. As an industry, we want to resonate with the median age of our state, [which is] 30 years old, so we can win talent from competing industries.”
The goal is for Utah to be known nationwide as the world’s premier ecosystem for aerospace and defense companies, where entrepreneurs in this space can grow their companies through access to talent, capital, commercialization, research and development, and tax incentives.
As the industry becomes more prominent, more commercial real estate will flourish throughout the state. It’s simply a matter of time at this point.
“If I’m on a plane, flying out of Atlanta, Georgia, five years from now,” Starks said, “and I hear the passenger in the seat next to me tell me how great Utah and all of the amazing work taking place within aerospace and defense here is, I’ll know I accomplished my job.”
