Retail Commercial Real Estate in Salt Lake County: Is it Rebounding? And What are the Trends?
Posted By Regional Development
June 28, 2021
One of the industries significantly impacted early in the pandemic was retail. So, how is Salt Lake County retail and commercial retail real estate fairing in 2021?
According to Danny Woodbury, Director of Leasing at Woodbury Corporation, the former narrative of a retail reckoning or “apocalypse now” never happened. While COVID-19 might have helped cull existing weak retailers, Woodbury said, many were successful and adapted to incorporate technology. Retail like sporting goods and home improvement had a strong year.
Along the Wasatch, Woodbury has observed:
- Decreased vacancies
- Stable or growing rents
- Generation of “Clicks to Bricks” retailers
- Sales at malls are 12-15% higher in 2021 than pre-COVID
- Construction costs might be the biggest impediment to new development
“The world is changing and we have to embrace these trends if we want these stores to thrive and generate sales tax,” Woodbury said.
Stuart Thain, Executive Vice President of Retail, Land & Investment at Colliers, said that in the last six to eight months brick-and-mortar stores have made a major resurgence. Fast food and Quick Service Restaurants (QSRs) were saved by drive-thrus and many reportedly did more volume during the pandemic through drive-thrus than before with dine-in and drive-thrus combined.
“A normal QSR or fast food restaurant, if they have a drive-thru, will do 20-40% more business and will allow them to pay the rents being asked in our market,” Thain said.
Raising Canes had one of its biggest openings ever when it recently opened its first location in Utah in South Jordan.
However, land prices in Utah are making it tough for development of new retail projects in addition to the challenge of hiring staff – Thain cited a popular outdoor retailer and a national restaurant chain in Salt Lake County that both cited their staffing was only at 60% despite efforts to hire.
Both Woodbury and Thain asked cities to be fast and more flexible to help facilitate approvals and permits, especially for features that will be more necessary in the future like drive-thrus.