ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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ADVISOR
COMMERCIAL REAL ESTATE 2019
THE
UTAH: AN EVOLUTION STORY
STATE OF THE MARKET | THE LAST MILE
ADVISOR
THE
A Year of Growth
With many significant milestone accomplishments on the horizon, such as COMMERCIAL REAL ESTATE 2019
an expanded international airport, a world-class inland port and continued
Chairman | Utah
real estate development across key business sectors throughout the state, Brandon D. Fugal
Utah currently faces critical decisions that will shape its ability to compete brandon.fugal@colliers.com
nationally and internationally for generations to come.
Managing Director | Utah
Progress assuredly presents many challenges — adequate infrastructure, Blake Rigby
population increase, transportation planning and affordable housing blake.rigby@colliers.com
to name a few. However, Utah can firmly plant roots within the global
CONTENTS
CEO | Utah
marketplace as a leading U.S. market if we continue to embrace proven Lew Cramer
business fundamentals and effectively navigate impending obstacles in the lew.cramer@colliers.com
way of growth. The state has proven time and time again that it has what
Public & Media Relations | Utah
it takes to compete at the highest level when the private and public sectors Bryan Welch
foster an atmosphere of collaboration. (801) 947-8300
bryan.welch@colliers.com
02 A YEAR OF GROWTH
A Year of Change A message from the leadership team at Collier’s International. 36 POST MILLENNIAL
The next wave of retail shoppers are what the Retail Industry
Utah was built on a legacy of industry. A dedication to excellence, strong Leaders Association calls the (R)Tech shopper: consumers who
economic fundamentals and innovative business practices within the public 04 UTAH: AN EVOLUTION STORY
Salt Lake City hasn’t always been a hub for major global
want to shop anytime, anywhere, in any way. That means brick-
and-mortar stores need to find a way to integrate digital space with
and private sectors have created a dynamic marketplace for companies
businesses, but over the past decade, Utah real estate has physical space.
looking to expand operations within the state. The Utah community of transformed itself from a relatively unkown tertiary market into a
today will certainly not be the same 30 years from now. thriving secondary market.
Tremendous progress brings significant change. We at Colliers AN ANNUAL PUBLICATION BY
COLLIERS INTERNATIONAL
40 THE LAST MILE
The last mile is the stage of shipping that gets the product to
believe that in order to achieve extraordinary results you must put forth
extraordinary effort. Consistent growth does not happen by mere chance.
10 EXPOSED
Along the Wasatch Front, trends in collaborative open format office
the consumer’s home and it’s the most expensive segment of
a product’s journey. Disruptive technologies such as mobile
It requires collaboration and foresight. It necessitates advanced tools and spaces have been driven by the state’s robust tech sector. Here’s computing, machine learning, cloud computing, cloud services,
how many large businesses are experimenting with open/closed artificial intelligence, and the internet of things can help.
resources. office hybrids.
A Year of Opportunity 46 ON LOCATION
By providing the most powerful proprietary intelligence, tools and Contributors
John Adams
14 MIX AND MATCH
Many traditional retail spaces are being redeveloped into mixed-use
Commercial real estate plays an important part in cinema. Local
properties have had notable roles in over 1,000 movies, television
resources to the Utah market, Colliers remains committed to facilitating Jacob Andra buildings that combine living spaces with officing options, shopping, productions, and advertisements, and have even brought additional
growth, optimizing change and providing opportunity to commercial and Heather Beers entertainment, and a plethora of dining experiences. revenue streams and notoriety to Utah.
Ana Bentz
community partners.
With a global footprint of over 15,400 professionals and more than 500
Lindsay Bicknell
Elainna Ciaramella 18 THE RIGHT ROUTE
Port congestion is a huge problem facing both the Ports of Los
50 CLINICALLY SMART
New technologies and legislation have created an environment
offices in 69 countries, Colliers International is the fastest growing publicly Tyler Cocker
Brandon Dalton Angeles and Long Beach. There’s a growing urgency to move cargo where medical clinics and independent practices can’t afford to be
traded commercial real estate firm in the world — delivering results for away from seaports and into distribution, and inland ports like the on their own unless they are in the hyper-specialized realm of care.
Kelsie Foreman
clients on a local, regional, national and international basis. Not only does Sarah Ryther Francom one planned for Utah can help facilitate this.
Colliers integrate the resources of real estate specialists worldwide, but we Elle Griffin
remain committed to serving clients with a hyperlocal and entrepreneurial Lana Howell
Brian Hugo 24 NOWHERE TO GO 54 DEATH. TAXES. REAL ESTATE.
Multiple provisions of the 2018 tax reforms stand to benefit
mindset. Rachel Madsen Utah currently has more households than available housing units. commercial real estate directly, and though the final details have
Our over 200 professionals, located across Utah’s various submarkets, Amanda Nogales And those available housing units are ever increasing in value, yet to be worked out, those looking to buy, sell, or rent commercial
Emma Penrod making them unaffordable to a percentage of the population. This space will likely benefit from broader tax cuts and deductions.
think differently and implement creative strategies to accelerate client has led many to speculate that the next generation will face a
Eric Peterson
success with a true, full-service real estate approach. It is an exciting time to Dana Sohm bonafide housing crisis.
live and do business in Utah. Kathy Sturzenegger
Bryan Welch
58 AIMING HIGH
The scope of Salt Lake City’s airport expansion goes far beyond
We look forward to serving you!
Donnie Welch 28 THE BURBS
Outside of Salt Lake City and Lehi, Utah has several suburbs that
essential upgrades, such as security, capacity and safety: travelers
will see improvements in convenience, functionality and efficiency—
Kassi Cox Whale
are home to big, vibrant businesses. Companies like Overstock, improvements that will have a major impact on the state for years
CHG Healthcare, Pluralsight, and doTERRA are just a few examples to come.
Published In Partnership with: of big businesses that have planted roots in the 'burbs.
Your partners,
62 COLLIERS INTERNATIONAL
34 A NEW CURRICULUM
These are no Animal House-style dormitories. Colleges and
Colliers International provides investment sales, landlord and
tenant representation, property management, valuation and
Brandon Fugal, Chairman universities around the country are renovating student housing consulting, and advisory services for world-class industrial,
Blake Rigby, Managing Director facilities with their target market in mind. investment, multifamily, office, and retail properties worldwide.
Lew Cramer, CEO Copyright 2019 by Colliers International. All rights reserved. Every
effort has been made to ensure the accuracy of the information
herein. However, Colliers International is not responsible for any
omissions or errors that might occur. Reproduction in whole or
part of any text, illustration or photography without express written
68 STATE OF THE MARKET
Taking the pulse of major markets throughout the state of Utah.
permission of the publisher is prohibited.
2 | THE ADVISOR THE ADVISOR | 3
UTAH:
AN EVOLUTION STORY
BY ANA BENTZ
There was a time when you wouldn’t think of Salt STRONG FUNDAMENTALS
Lake City as a hub for major business. But over Great culture and picturesque surroundings were a
the past decade, Utah has transformed itself into few of the reasons why global software giant, Adobe,
a thriving commercial market similar to the likes invested in Silicon Slopes. "[Utah has] proven to be a
of Silicon Valley. Elite-level businesses from solid business decision," says Jonathan Francom, vice
around the globe increasingly consider the state president of employee and workplace solutions at
an attractive alternative to gateway markets on Adobe. "Adobe chose to establish a long-term presence
the east and west coasts. Leading companies and in Utah due to the region's vibrant communities,
investors want to work, live, and play in Utah. But business-friendly environment and its highly-educated
what exactly makes the environment so appealing? and skilled talent base."
With a business-friendly climate and an atmosphere
QUALITY OF LIFE of great cultural and recreational opportunities, it's
"Utah has been, and continues to be, a great home no wonder why Utah is competing with other major
for us," says Anita Grantham, chief people officer at markets throughout the United States. Grantham
Pluralsight, Inc. According to her, Pluralsight chose to noted that with so many successful companies making
make a presence in the state back in 2004 due to the their homes in Utah, it's no longer just a fly-over state.
overall experience Utah brought the company and "We have investors, customers, team members, and
their people. "Both our team members who are from technologists from all over the world coming to Utah to
Utah and who have relocated here love the lifestyle meet with the exciting businesses here."
Utah offers them. They get to enjoy Utah's low cost-of- Utah Governor, Gary Herbert, does not see an end
living and high quality of life, spending time outdoors to this tremendous growth anytime in the near future.
with friends and family, all while doing meaningful and He attributes Salt Lake City's commercial success to
fulfilling work in their careers." a young, driven, and entrepreneurial workforce that
Founded in Farmington, Pluralsight bootstrapped continues to grow throughout the state. Gov. Herbert
its way to becoming one of the most promising tech says he is proud of the culture that Utah and Salt Lake
unicorns nationally — receiving approximately $200 City offer to businesses and employees, before noting
million dollars in series funding and filing for IPO in that the culture here is "an unparalleled quality of
early 2018. Just like Pluralsight, the list of homegrown life, opportunities for growth and forward-thinking
Utah businesses achieving critical acclaim on a global policies that do not encumber growth and success but
scale is rapidly growing. encourage it."
Local organizations aren't the only groups looking
for a long-term Utah home base. In 2017, a survey ECONOMIC DIVERSITY
from Salt Lake City's Downtown Alliance discovered Utah offers more than just thrilling outdoor activities
that when organizations were deciding whether to and stunning mountain views. Incredible stability, low
relocate, establish or continue growing in Utah, their unemployment rates and a pro-business government
number one concern was creating work-life balance are just a few of the factors attracting new employers.
for employees. In other words, in the toss-up between Utah's dynamic business fundamentals have captured
choosing an affordable location or an enjoyable one, the eyes of corporate executives within the aerospace,
enjoyable typically wins out in the end. However, in the agricultural, financial, healthcare, manufacturing and
case of Utah, it is entirely possible to find both. real estate industries, just to name a few.
4 | THE ADVISOR THE ADVISOR | 5
111 S. Main, Salt Lake City. Photo courtesy of Dana Sohm
“ ESTABLISHING a presence in Utah was a top priority
to further our market-leading position and provide a strong
platform for future growth in the region.
Dylan Taylor, CEO, Colliers Real Estate Services
Colliers' Salt Lake Office Colliers' 111 S. Main office, Salt Lake City Colliers' Utah County Office
Leading multinational investment bank and financial services Utah was an important stepping stone in the company's future.
company, Goldman Sachs, is among the list of businesses that have "Establishing a presence in Salt Lake City was a top priority to
found success in Utah. Goldman first entered Utah in 2000 with a further our market-leading position and provide a strong platform
Labor Comparison: Major Industry Breakdown
handful of employees. Now, the company operates its second largest for future growth in the region." Taylor says that entering the
office in the Americas and fourth largest office worldwide from thriving Utah market has brought Colliers countless opportunities
Salt Lake City. The office employs over 2,350 employees, which to leverage and expand talents and services, not only locally but
accounts for nearly 7 percent of its global workforce. nationally and internationally as well. "Companies are beginning 2.7%
5.9%
At a press conference announcing the company's 2010 expansion to turn to secondary and tertiary markets, and the Intermountain
to Utah, Goldman representative Jeff Schroeder said, "We are in a Region's ongoing transformation shows no signs of stopping. 21.7%
hundred cities around the world and roughly 29 or 30 countries. Continued growth and expansion remain high priorities on our 6.7% Education & Health Services
Salt Lake has the fastest growth rate. We've been pleased with what list as we strengthen and diversify operations across the globe
we've seen. I'll tell you, one of the reasons is the way the community to better serve and accelerate the success of our clients and Trade, Transportation, & Utilities
comes together." David Lang, managing director of Goldman Sachs professionals."
added, "We've had a history of success here in Salt Lake City. We Colliers International indeed leads the way as one of the most Professional & Business Services
8.8% Utah has the most diverse economy
hire fabulous people, very talented people, highly-educated people." innovative and entrepreneurial companies in the world. The
objective will always remain the same: to elevate commercial in the nation while also maintain- Leisure & Hospitality
POISED FOR GROWTH opportunity for companies looking to optimize operations and ing industry expertise in many
Global real estate services and investment management company, expand market share. Colliers' strong commitment to enhancing industries, such as aerospace, life Manufacturing
Colliers International, has heavily set its focus on Utah. With more business will undoubtedly benefit Utah well into the future.
sciences, and finances. Utah also Other: Natural Resources, Other Services,
than 13,000 professionals operating in 69 countries, Colliers offers
commercial real estate services on a local, regional, national, and AT A CROSSROADS 9.0% has one of the fastest growing IT Public Administration, Unclassified
international basis. In early 2018, the firm entered Utah through Colliers, Goldman Sachs, Adobe, and Pluralsight all exemplify the industries in the nation. 20.4%
acquisition. It is both the largest and top-performing full-service fact that Utah has evolved. The state no longer is overlooked as a
Construction
commercial real estate brokerage in the state. tertiary market. In fact, it has become a destination place with all
Financial Activities
Colliers has begun introducing and growing international service the necessary elements required to build a world-class hub for
capabilities throughout Salt Lake City, connecting the market with global commerce.
10.6% Information
businesses looking to expand opportunities worldwide. But what There are many reasons why international companies and
makes Colliers so unique is a dedication to maximizing potential investors are attracted to Utah, but it all boils down to one thing:
within the communities they serve while staying committed to Utah is a wonderful place to start and grow a business. And as long 14.3%
socially and environmentally responsible business practices. as innovative, forward-thinking organizations make headquarters
Colliers' overall strategy focuses on doing the right things for here, Utah will continue to experience economic success for
clients, people, and communities every single day. decades to come as the state transforms from, as Gov. Herbert says,
Dylan Taylor, CEO at Colliers Real Estate Services, says choosing "'The crossroads of the west' to 'the crossroads of the world.'"
6 | THE ADVISOR THE ADVISOR | 7
UTAH PROVIDES A HIGH
UTAHQUALITY
PROVIDES
OF ALIFE
HIGH QUALITY OF LIFE
WHY UTAH?
WHY UTAH?
Logan
Brigham City
Utah is a national leader in highUtah job is a national leader in high job
Ogden
growth, low unemployment, low growth,
cost of
low unemployment, low cost of Layton
doing business, and talented labor. doingUtah
business, and talented labor. Utah
UTAH
Salt Lake City
regularly tops rankings among best regularly
statestops rankings among best states West Valley City
Sandy
Park City
Vern
for business, careers, living, health,
for business,
and careers, living, health, and Lehi
Orem
Utah
an is a Utah The
is a Utah The
boasts a Highly Utah
Opportunities
boasts a Highly
for Opportunities
Utah contains
fora Utah contains a
Provo
quality of life. Utah provides anquality
array of life. Utah provides array Duchesene
of employment opportunities in of various Young & in
employment opportunities High-Growth
various Young
Economic
& High-Growth
Conditions Economic
Educated
Conditions
& Skilled Educated
Jobs & &Careers
Skilled JobsMultilingual
& Careers Multilingual Nephi
industries, and offers its residents
industries,
numerousandlifestyle
offers its residents numerous lifestyle
State in Utah
Stateare Great in UtahWorkforce
are Great in Utah
Workforce
are Plentiful in Utah
Population
are Plentiful Population
Price
options that range from quiet rural
options
Utah is a national leader in high job growth, low
settings
that to
range
thriving
from quiet rural settings to thriving
urban centers. urban centers.
unemployment, low cost of doing business, and talented labor.
Green R
AMONG THE TOP STATES AMONG THE TOP STATES
2nd 235 35
ONE OF THE FASTEST RANKED
ONE OF THE FASTEST MORE THAN
RANKED MORE THAN
3.6% 120
3.6% 120
Utah regularly tops rankings among best states for business, IN THE U.S. FOR JOB GROWTH OVER
IN THE U.S. FOR JOB GROWTH OVER Richfield
Most of Utah's population resides Most
along The Wastach
of Utah's population resides
along The Wastach
15.2% 15.2%
GROWING STATES IN THE U.S. GROWING STATES IN THE U.S. Moa
careers, living, health, and quality of life. Utah provides an
Front, roughly 150 miles of Front,
contiguous
array of employment opportunities in various industries, and
communities, running predominantly
roughly
communities,
offers its residents numerous lifestyle options that range from
cities
north-south
and
150 miles of contiguous cities and
running
alongpredominantly north-south along nd
the I-15tocorridor
quiet rural settings thrivingandurbanthecenters.
western theslope
I-15 corridor
of the Wasatch
and the western slope of the Wasatch BEST STATE FOR
OVERALLINCREASE
ECONOMY
BESTHIGHER
OVERALL
STATEEDUCATION
INSTITUTIONS
FOR
ECONOMYIN UTAH
HIGHER EDUCATION
UTAH’S JOB GROWTH RATE
INSTITUTIONS IN UTAH LANGUAGES
UTAH’S JOB GROWTH RATE LANGUAGES
range, from Brigham City toPOPULATION INCREASE POPULATION Cedar City
Most ofMountain range, from
Utah's population Brigham
resides alongMountain
City
The to Wastach
Nephi. Nephi.
2010-2018 2010-2018
861(:6 %(67 861(:6 %(67
1$7,21$/'$7$%$6( 2017-2018
1$7,21$/'$7$%$6( 2017-2018
SPOKEN IN UTAH SPOKEN IN UTAH
67$7(65$1.,1* 67$7(65$1.,1*
2)6&+2/$56+,36 86%85($82)
2)6&+2/$56+,36 86%85($82)
'(6(5(71(:6 '(6(5(71(:6
Front, roughly 150 miles of contiguous cities and communities, (65,%$2 (65,%$2 /$%2567$7,67,&6 /$%2567$7,67,&6
Utah is world-renowned
running predominantly north-south alongfor itstheUtah
bounty of public lands for its bounty of public lands
I-15iscorridor
world-renowned St. George St. Geo
and recreation
and the western slope of theopportunities
Wasatch Mountain and range,
ranging recreation
from from opportunities ranging from mountain
mountain
48% 48%
UTAH IS EXPERINCING UTAH IS EXPERINCING
30.6 30.6 15% 15%
MEDIAN AGE OF MEDIAN
UTAHAGE OF
NAMED UTAH NAMED ABOUT ABOUT
#2 #2
Brigham City wilderness
to Nephi. to desert landscapes. wilderness
Utah has to fivedesert
national
landscapes. Utah has five national TOTAL POPULATION WORKFORC
TOTA
3.2 1.33
OVERWHELMING JOB GROWTH IN OVERWHELMING JOB GROWTH IN
parks, six national
Utah is world-renowned for itsforests,
bounty numerous parks,lands
of public state
six national
parks and
and forests, numerous state parks and CONSTRUCTION, CONSTRUCTION,
recreation areas,
recreation opportunities andfrom
ranging overmountain
a dozenrecreation
ski resorts.
wilderness areas, and over a dozen ski resorts. FINANCIAL, FINANCIAL,
to desert landscapes. Utah has five national parks, six national THE YOUNGEST STATE IN THE YOUNGEST STATE IN
BEST STATE OF UTAHNS
BEST STATE HAVE OFHEALTH &
UTAHNS HAVE HEALTH
OF UTAH & SPEAK
RESIDENTS OF UTAH RESIDENTS SPEAK
Utah isstate
a geographically diverseareas,
Utah
state, is encompassing
a over
geographically a diverse state, encompassing a
forests, numerous parks and recreation
convergence of three distinct geological
and
convergence
a
regions:
of three
THE U.S. BY MEDIAN AGE
thedistinct geological regions:
(65,%$2 the
THE U.S.FOR
BY MEDIAN AGE
BUSINESS OBTAINED POSTSECONDARY
FOR BUSINESS
CERTIFICATES
TECHNOLOGY
OBTAINED POSTSECONDARY TECHNOLOGY
A LANGUAGE OTHER MILLION
A LANGUAGE OTHER MILLIOM
dozen ski resorts. (65,%$2
IN 2018 IN 2018 OR DEGREES CERTIFICATES OR DEGREES
SECTORS THAN SECTORS
ENGLISH AT HOME THAN ENGLISH AT HOME
Utah is Rocky Mountains,diverse
the Great Basin,
RockyandMountains,
the Colorado the Great Basin, and the Colorado )25%(6 87$+*29
)25%(6 87$+*29
87$+*29 7+(6$/7/$.(75,%81(
87$+*29 7+(6$/7/$.(75,%81(
a geographically state, encompassing a UTAH’S POPULATION BY GENERATION
UTA
convergencePlateau.
of three distinct geological regions: Plateau.the Rocky Silent & Greatest
5.2% Silent &
ABOUT ABOUT born 1925 and earlier born 1925 a
420 420
4th 469 69
THERE ARE MORE THAN THERE ARERANKED
MORE THAN OVER
RANKED OVER
48 48
Mountains, the Great Basin, and the Colorado Plateau.
246 246
MORE THAN MORE THAN
The beehive
The beehive is the symbol
is the state state symbol
of Utah.The
of Utah.
beehive
The TheisMormon
area's the state symbol of Utah. The Mormon Baby Boomer
born 1945 - 1964 15.6% bornBaby
19
first settlerssettlers
used the used
industriousness.
industriousness.
the symbol
symbol
The beehive isThe where
to represent
to represent
beehive
settlers
hard work hard
used
isindustriousness.
all workers where
work
and
all workers
cooperate
and to represent hard work and
the symbol
in The beehive is where all workers th Generation X
born 1965 - 1979 17.6%bornGen
19
cooperate
the construction in the construction
of something much bigger of cooperate
than something
themselves,inmuch
the construction
bigger THOUSAND
of something much bigger THOUSAND
BEST STATE FOR THOUSAND
BEST STATE FOR THOUSAND
THOUSAND THOUSAND
THOUSAND
Millennial
THOUSAND
born 1980 - 1994 born28
19
as a model forthan themselves, as a model forthan
a properly run society. a properly
themselves,run society. MORE PEOPLE IN UTAH
as a model for a properly run society. MOREVENTURE
PEOPLE INCAPITAL
UTAH VENTURE
DEGREESCAPITAL
AWARDED DEGREES AWARDED
JOBS ADDED TO JOBS ADDED TO
SPANISH SPEAKERS SPANISHZSPEAKERS
THAN THERE WERE IN 2010 861(:6 %(67
THAN THERE WERE IN 2010
67$7(65$1.,1*
861(:6 %(67
IN 2015
67$7(65$1.,1*
IN 2015 IN 2018
UTAH’S ECONOMY UTAH’S ECONOMY IN 2018
86&(1686%85($8
Generation
born 1995 -2012
86&(1686%85($8 2
Gen
born 19
(65,%$2 (65,%$2 '$7$86$,2 '$7$86$,2
81,9(56,7
EXPOSED
CLOSING THE OPEN
OFFICE DEBATE
FROM CLOSED TO OPEN OFFICE LAYOUTS, UTAH BUSINESSES
CUSTOMIZE ENVIRONMENT TO FIT WORK CULTURE.
BY ERIC PETERSON
Once upon a time, the notion was held that an office only needed to be functional.
It could be a windowless cubicle dungeon, dimly lit by the insect-like buzz of a
sputtering neon bulb and that was good enough. It helped the company’s bottom
line by virtue of thrift—or cheapness—depending on where you sat in the building.
Nowadays, managers (thankfully!) realize that an inviting office space, rich with
amenities that energize employees, do more to the standard office than make a
company profitable. Along the Wasatch Front, trends in collaborative open format
office spaces have been driven by the state's robust tech sector but that trend also
extends beyond tech companies. Many large businesses are experimenting with open/
closed office hybrids, while other businesses make their mark by repurposing historic
buildings or engaging directly with their surrounding locales.
Brandon Fugal, chairman at Colliers International | Utah, says it's exciting to see
Utah's dynamic growth in all business sectors, from technology and financial services
to the biosciences and aerospace industries. With so much good business in the state,
it's also driving a need for companies to get the most out of their workspace, not just
for the sake of efficiency, but also for obtaining the right talent.
THE RIGHT OFFICE ATTRACTS THE RIGHT TALENT
"With a tight labor market and record low unemployment, and employee recruitment
and retention being the highest priority, companies are exploring new ways of
enhancing their office environments in order to differentiate themselves from their
competitors," Fugal says.
Amenities from cafeterias to on-site gyms are appealing for employees, making
work seem more like a home than an office, and employers are seeing the benefits in
an office where their employees can file their reports, make their calls, grab a bite to
eat, or get in a workout on site between meetings.
"It's an opportunity for employers to effectively increase productivity in their
employees by adjusting the space to people's moods and it also extends the hours," says
Cynthia Foster, national director of office services at Colliers International. "Because
if people are feeling healthy, social, and fed they don't need to leave the office."
10 | THE ADVISOR THE ADVISOR | 11
“ WITH A TIGHT LABOR MARKET AND RECORD LOW
unemployment, companies are exploring new ways of enhancing their office
environments in order to differentiate themselves from their competitors.
Brandon Fugal, Chairman at Colliers International | Utah
OPEN OFFICE SPACES FOR YOUNGER
EMPLOYEES
Another trend that has taken hold—
especially with tech companies—are open
office formats with shared work tables and
spaces to help foster collaboration, a selling
point, especially for millennials and Gen-Z.
"With the younger workforce it's about
coming together for informal meetings,"
says Chris Kirk, managing director at
Colliers International Utah. "Booking a
conference room can be very formal but
sitting in an open area on couches by a
window with a cool view can be every bit as
productive and a little bit more casual, fun,
and creative."
Fugal also points out that many Entrata Headquarters, Lehi. Photo Courtesy of Layton Construction
companies are learning how to incorporate
both open and collaborative spaces with
more private spaces for special meetings
and projects. Mountain America Credit HISTORIC BUILDINGS FOR CREATIVE EMPLOYEES Kirk points to the law firm of Durham, Jones, and
Union's new 11-story, 330,000 square-foot Other companies are learning how to repurpose older Pinegar that recently moved into the top two floors of the
headquarters in Sandy offer a prime example historic buildings to give them a modern twist. For 111 building in downtown Salt Lake City. Even though it
of this. Plenty of natural light cascades example, Kirk recently helped an architecture firm get into was a higher rent space, through efficiencies in the layout
through floor-to-ceiling glass windows on a historic building complete with exposed rafters, open they were able to reduce their square footage. "Sometimes
the exterior of the office's collaborative ceilings, red brick, and a handful of other contemporary you can upgrade a space but it's not necessarily a major
spaces, but there are also private office finishes. Having a compelling design-oriented workspace financial impact," Kirk says.
spaces throughout the interior space—that was crucial to the architecture firm's culture and Kirk All agree that the conditions are truly aligned for a
and all the amenities one could hope for. found a space that was the perfect meld of what his client dynamic work environment in Utah, with Kirk saying
"This iconic building incorporates not needed. That's the kind of matchmaking that goes into a lot more and more brokers across the country are recognizing
only the finest finishes but also provides of his work at Collier's International. the appeal of working in Utah with its vibrant downtown
occupants everything from secure bike "They want to set the right tone for their employees scenes in Salt Lake City and Provo and its close proximity
storage to a two-level fitness center," Fugal as well as their customers," Kirk says. "They're looking at to the majestic Wasatch range. "Utah is on the radar for
says. their [work environment] as well and are trying to find the people now in a way that it has never been before," Kirk
Other companies like Entrata, a software building and the space that reflects their ethos." says.
company in Lehi, have utilized space in Large tier employers, out-of-state capital, and
a way that dazzles guests and potential TRADITIONAL ENVIRONMENTS FOR TRADITIONAL employees themselves are now eagerly keeping an eye out
clients. In the foyer of the Entrata offices, BUSINESSES for opportunities in Utah. For employees already here the
potential clients will be greeted by a giant None of this is to say that businesses with more traditional workspaces alone are keeping them admiring the sunsets
red double-decker bus and an expansive and timeless workspaces like financial firms and law offices from their towering windows before making another call,
two-story digital wall showcasing engaging aren't also learning how to innovate. Shared workspaces instead of just watching the clock creep toward quitting
and futuristic displays. "Guests are might not always be a good fit and efficiencies and time.
welcomed into a headquarters that is both sustainability are still appealing to traditional employers.
state-of-the-art and inviting," Fugal says.
12 | THE ADVISOR THE ADVISOR | 13
MIX AND MATCH “ IT IS IMPOSSIBLE NOT TO
TRADITIONAL MALLS ARE OUT
redevelop and reinvent retail. The
continuing evolution of retail space has
seen its biggest changes in the last 20 years
MIXED-USE DEVELOPMENTS ARE IN Tim Simonsen, Senior Executive Vice
President and Partner, Colliers International
HERE'S HOW TO TURN OLD INVESTMENTS INTO NEW ONES.
BY KELSIE FOREMAN
If you’ve found yourself perusing the shops at a retail mall looking for a new pair of shoes or jeans,
you’ve probably noticed that your shopping center is looking a little emptier these days. Due to the
rise of ecommerce and Amazon, an increasing number of consumers choose to buy their goods
online, rather than in-store, leaving the traditional shopping mall looking for new ways to innovate.
Consumers today are looking for convenience, a one-stop shop where they can purchase anything
they could ever need. They're looking for more than your stereotypical retail mall. Based on consumer
wants, today's retail malls are in need of massive redevelopments. Ones that transform a traditional retail
space into an area that combines living and working with shopping, entertainment, and dining.
In fact, redevelopments like this are probably the only thing that can save retail malls. For if no
redevelopments are made, business growth within the retail sector becomes stagnant. When asked
what would happen to retail malls that chose to forego any redevelopment, Zach Beaudry, an executive
vice president at Colliers International, ,what would happen to retail malls that chose responds with a
chuckle. "I'd wish them luck. I think they'd have a hard line to hold to stay fluid in the market." It goes
without saying, but in this economy, you either adapt or die.
Tim Simonsen, a senior executive vice president at Colliers International also agrees that change is
necessary for these societal staples and says that, "it is impossible not to redevelop and reinvent retail.
The continuing evolution of retail space has seen its biggest changes in the last 20 years." However, he
adds that retail real estate will always be an "integral part of people's lives."
Photo courtesy of University Place
14 | THE ADVISOR THE ADVISOR | 15
“ IT'S ALL ABOUT GETTING
more people in the space and that's
really what drives retail entertainment.
Jeff Woodbury, Senior Vice President,
Woodbury Corporation
REDEVELOP MALLS INTO MIXED-USE
BUILDINGS
When it comes to redeveloping the retail
real estate space, the solution, it seems, is
to rebrand and redevelop these spaces as an
environment suited for mixed-use. In other
words, shoppers can expect the malls of
tomorrow to house everything from movie
theaters, restaurants, and health clubs, to office
spaces and apartments. Mixed-use spaces are
the perfect solution for the shopper looking for
a convenient one-stop shop.
While discussing the future of retail malls, Stuart Thain, executive vice president of retail, land and "It's all about getting more people in the space and that's really
Simonsen says that the key to developing the investment at Colliers International, explains that Utah's what drives the retail entertainment," says Woodbury. "So if we
ultimate mixed-use space is more than just incredible growth has dictated a need for mixed-use space. have a concert, or we have a yoga class, people will walk through
leasing out retail spaces to health clubs and Thain says, "With the greater Salt Lake City market adapting to the food court and pick something up on the way to the park."
movie theaters. In fact, it requires a much a more urban environment as a result of escalated population Due to the success of the redevelopment of University Place and
more elaborate mix of gaming studios, food growth, more multifamily is being incorporated into mixed-use changes in shopping habits, several other retail malls throughout
halls, water parks, golf driving ranges, concert development as projects look to build synergy through providing the valley are following suit. "In Utah and along the Wasatch
venues, cooking classes, surf parks, and much the right balance of hotels, recreation, parks, office, retail and Front, nearly every major retail tenant is looking to expand their
more. multifamily." footprint and market share with new locations. Utah's economy is
"Developers must create the full array of For a great example of successful mall redevelopment, one only one of the best in the country. That will not change. There are very
goods and services. Restaurants, restrooms, needs to look at University Place in Orem, owned and developed few negative economic factors. If you want great return, Utah is a
gathering places, easy transportation, drop off by the Woodbury Corporation. Originally named University Mall, great place to invest. It is the best place to live and do business,"
and pick up locations, and a safe and secure over the last few years the shopping area has undergone a massive says Thain.
environment for families," says Simonsen. $500 million transformation, complete, of course, with a new Though mixed-use developments don't happen overnight,
"These centers must be 'technologically smart.' name and a little something for every shopper. retail spaces throughout the valley such as The Gateway, Valley
Constant electronic contact between friends The mixed-use development now houses Costco, Trader Joe's, Fair Mall, and The Shops at South Town are making small changes
and family coupled with the right amount of Big O Tires, Massage Envy, Tai Pan Trading, Cinemark movie to improve the success of the retail real estate space wherever
instant ecommerce advertising to capture the theater, and a host of delicious restaurants. Jeffrey Woodbury, the possible.
dollars on site will be critical." senior vice president at the Woodbury Corporation higlights a "The mixed-use mall is not a quick and easy fix," says Mr.
brand-new apartment complex located on-site and mentions that Simonsen. "South Town has been formulating their plan now for
CREATE THRIVING COMMERCIAL CENTERS there will be a hotel added to the property sometime in the next five years. They have been successful in fixing their transportation
It's no surprise that redeveloping a retail mall to year. access with the addition of the northbound I-15 exit directly into
house things such as water parks, golf driving At University Place, you can literally walk out the front door the mall. They have repurposed the former Dillard's box into a
ranges, and go-kart tracks is a daunting and of your apartment and walk to a grocery store, a movie theater, new entertainment venue named Round One."
costly project for developers, but it's one that and more. With everything a shopper could ever need found in But South Town's redevelopment doesn't end there, Mr.
Simonsen says is worth the investment. Both for one convenient location, you'll never have to leave. Simonsen adds that the developers are looking at adding multi-
the mall and the areas surrounding it, as well. family housing, several new restaurants and hotels, and a new
"Mixed-use developments are very EMPHASIZE COMMUNITY SPACES "category killer" hard-goods store in the west end of the retail
beneficial to the thriving retail areas," says While there are a host of new things happening at University space. Some malls are even looking at adding a bit of office space,
Simonsen. "By creating day-time jobs with Place, both the shoppers and the developers at Woodbury are most similar to the office spaces at City Creek Center. With additions
office space; eating establishments which cater excited about the addition of The Orchard, a park-like space located like these, it isn't hard for shoppers to find everything they could
to customer needs morning, noon, and night; outdoors, in the heart of the property. Complete with synchronized ever need, all in one convenient location.
public transportation convenience; hospitality water shows; a plethora of covered seating; within close proximity "We have all heard the adage live, work, and play," says Simon-
choices; and experiential retail venues, guests to the apartment homes; and the ability to host year-round concerts, sen. "This is where mixed-use developments or combinations of
are able to create memories and feel-good times farmer's markets, and other activities. The weekly events held at The developments create places to live, places to work, and places to
with friends and family." Orchard help bring even more people into the mixed-use space. recreate and entertain. All within the same development."
16 | THE ADVISOR THE ADVISOR | 17
THE RIGHT ROUTE
BUILDING AN INLAND PORT
HOW UTAH’S PLANNED INLAND PORT WILL OPEN UP
NEW OPPORTUNITIES FOR THE STATE, AND THE WORLD.
BY ELAINNA CIARAMELLA
Planes, trains, and automobiles, or in Utah’s containers can be loaded onto the dock. Intermodal
case… semi-trucks and rail-lines filled with rail is critical to moving containers quickly and effi-
cargo. All of these are critical to the inland port ciently to an inland port, especially in Utah, where
coming to Utah, which will forever affect the cargo can be distributed quickly and efficiently.
way we do business.
THE ANATOMY OF AN INLAND PORT
THE NEW TRADE ROUTE An inland port, or a dry port, is a hub where cargo
International trade is booming, but North Ameri- is received, warehoused, broken down into smaller
can seaports are ill-equipped to handle the massive batches, and distributed. A true inland port has di-
volumes of cargo, and our infrastructure struggles rect connection to a seaport through Class I rail and
to keep up with the rising demand. As a result, major transportation infrastructure such interstate
there are problems with congested docks, contain- highways. Utah has both – plus a superb airpot hub.
er delays, and increasing supply chain costs. Derek Miller, board chairman of the Utah In-
Since 1980, global trade has increased by 600 land Port Authority Board, said there’s been talk of
percent, directly impacting the front of the supply an inland port in Utah since the 1970s, but a trade
chain―the seaports. And the rise of Amazon and mission to Hong Kong in 2015 is what finally got
other e-commerce companies have put a squeeze on things moving.
the other end of the supply chain―the local distribu- The governor, Miller, Lew Cramer (CEO of Col-
tion hubs. Local hubs are under increasing pressure liers International | Utah) and other leaders visited
from consumers for faster, cheaper deliveries. the Port of Hong Kong, giving them a unique per-
When the Great Recession ended, US imports spective of the issues and opportunities that come
and exports saw tremendous growth, increasing by with a port. That visit was the inspiration for the in-
36 percent and 38 percent, respectively. However, land port, something that would make undisputedly
while seaport infrastructure has grown, it’s failed Utah a center of commerce for the western United
to keep up with the cargo volume, leading to con- States, similar to how Hong Kong has become a ma-
gestion on the already-busy docks. jor hub in the southeast and Asian regions.
Port congestion is a huge problem facing both In 2017, a feasibility study was conducted and,
the Ports of Los Angeles and Long Beach, the bus- “after that, the state legislature got very interested
iest seaports in North America. Due to conges- and created the Port Authority Board to guide the
tion, it’s now taking longer to “turn” a container development along,” says Miller.
due to the increased volume of cargo, leading to
bottlenecking, increased fees, and dreaded ship- THE CROSSROADS OF THE WEST
ping delays. Utah has been known as the crossroads of the West
There’s a growing urgency to move cargo away since it was settled, says Miller. It was true during
from seaports and rapidly into distribution chan- western expansion, the Gold Rush, the building of
nels, and inland ports like the one planned for the continental railroad and the telegraph line. And
Utah can help facilitate this. The faster cargo can because of Utah’s central location, it was true when
be moved and loaded on a train or truck, the faster they built the interstate freeway system.
18 | THE ADVISOR THE ADVISOR | 19TOP FIVE
U.S. Inland Ports
Cincinnati- Tri-State St. Louis Pittsburgh Memphis
Northern Huntington,
Kentucky WV
43 Million 37.5 Million 32 Million 22.5 Million 12.2 Million
annual annual annual annual annual
tonnage tonnage tonnage tonnage tonnage
Utah was blessed geographically and now we’re at the next stage of that, says Miller.
“When we talk about inbound and outbound trade, Utah is in a great position. There’s
a lot that’s done and made in Utah and goes out around the world. Now we have the cross shipment, we can make a big difference in terms of efficiencies and ATTRACTING AN INTERNATIONAL AUDIENCE
opportunity to put in more infrastructure to make sure Utah isn’t just the crossroads of reduce environmental impacts as well, he says. There are a lot of companies in Utah that get product from overseas and
the West, but the crossroads of the world.” There are so many smart port operators around the world. If we can often products get bogged down at the ports. The inland port will allow
“ THE
IF YOU LOOK AT SHIPPING IN
WESTERN UNITED STATES,
The port will make sure things can get in and out of market quicker. When people
order something, they’re counting the minutes not the days. It will solve the issue of
take advantage of their technology, we’ll provide more jobs and a more
effective way of handling the transportation of goods, he says.
cargo to be transported directly from boat to train. It will be a huge ex-
pansion of the Union Pacific intermodal hub in Utah, says Bollow.
cost for Utah’s exporters: the inland port will provide a quicker and cheaper way for “The intermodal hub that we have here has additional capacity. Peo-
you pretty much have to go through Salt Lake
their products to get to market, says Miller. MITIGATING LOCAL CHALLENGES ple think, ‘Why do we need this inland port?’ There’s some truth to that
City. Trade follows trade routes and trade
Right now, our West Coast seaports are at max capacity. “Creating an express lane The congestion between Salt Lake City and Provo is unbearable, he adds. but the overall big picture is by creating an inland port, we attract the
brings jobs, innovation and investment. where goods can go off the boat and onto a train to Utah will solve a problem for our “We need to have smarter ways to use our other rail to handle some of larger guys, such as the Amazons of the world or Alibaba, the Amazon
West Coast ports and for the country.” this transport. It may help us get smarter transportation solutions.” of China. What gives life to the inland ports is the large manufacturing
Lew Cramer, CEO, Colliers International | Utah “Globalization is not going away. There is so much interconnectivity companies like BMW. In my opinion that’s what’s going to drive the cre-
BRINGING INDUSTRY TO THE WORLD in business today...international investments in Utah. Something like this ation of this port.”
Miller said that the inland port will affect IT, aerospace, agriculture, the life science in- is a strong validation that Utah is serious about globalization.” The Salt Lake International Airport will also be affected, and accord-
dustry, and manufactured goods that are exported around the world. But the port is not Lara Fritts, the appointee of the Airport Advisory Board to the In- ing to Cramer, the airport can do a better job of helping the surrounding
just about growing Utah’s markets. It will be a benefit to surrounding states including land Port Board said the inland port will provide opportunities for Utah- business get, and stay, connected.
Wyoming, Montana, Colorado, New Mexico, Arizona, Nevada, and Idaho. “Our goal is based companies, including those in Salt Lake City to export their goods “If you go to Dubai, their airports and railroads are seamless. They
for this port to act as a central point for all those outbound exports,” he says. more efficiently. “We are a very fortunate state in that we export a lot of are a transshipment spot for two billion people within two hours from
Lew Cramer, CEO of Colliers International | Utah and a State Transportation Com- agricultural products like hay and alfalfa. Making the trade more effi- Dubai. If we are smarter and ensure that the transshipment of goods be-
missioner says, “If you look at shipping lanes in the western United States, you pretty cient is a benefit to the state,” says Fritts. tween airport and rail is much better, the impact will be huge. It will be a
much have to go through Salt Lake City. We’re a day’s truck ride from the four major “There are manufacturers that haven’t located here yet that need ac- major positive, and the airport knows that’s coming,” says Cramer
ports of the West Coast.” cess to an inland port who can benefit from it. The business plan I’m The inland port will massively increase the air cargo transported in
He explained how the inland port will enhance Utah’s capacity to be a transship- hoping can identify not only existing opportunities, but who are those and out of Salt Lake City International Airport . Products will come in
ment point for the entire western United States. Given the mountains and rivers in businesses that should be here, that need the port to be successful. Let’s from coastal ports, offload into trains and onto trucks, and a lot of those
the West, most trucks and trains have to come through Utah,” says Cramer. “There are find the inland industries that can locate here and grow here,” says Fritts. orders are gone the next day, says Bollow.
only two places you can take a train. We’re really important for that purpose. Trade Rusty Bollow, a senior industrial and investment broker at Colliers The goods will go straight to the warehouse, to the airport, to be de-
follows trade routes and trade brings jobs, innovation, and investment.” International calls the inland port a game changer. “It will transfer Utah livered the next day. “We’re in the mid of this multi-billion-dollar air-
As a UDOT commissioner, Cramer is a strong believer in simplifying the road sys- from a typical Tier II industrial market into a world-class logistics hub port expansion that will make it so we can accommodate that growth,”
tems in Utah. “We may not just use the inland port in the northwest quadrant, but if and manufacturing center. It will give us the ability to grow in ways that says Bollow.
we take some of these opportunities to say for example Fillmore, we can be a lot more wouldn’t be possible otherwise,” he says. As for the residents anticipating the inland port, Bollow says we’re
helpful in developing the rural parts of Utah. Put your big trucks in Fillmore, reduce The inland port will make it much easier and efficient for companies moving through the processes. “It’s going to happen. It’s just we need to
congestion. You help the rural counties at the same time. There are a lot of good ideas to receive port goods from overseas, specifically in regards to customs be patient, it’s not happening tomorrow.”
that we are considering right now,” he says. duties, Bollow pointed out. The port will allow businesses to take better
Cramer says the inland port will equate to a better speed to market for consumers advantage of the foreign trade zone (FTZ), such as reduced customs du-
in and outside of Utah. If we use electric vehicles or some other smart way to handle ties, taxes, and tariffs.
20 | THE ADVISOR THE ADVISOR | 21Photo courtesy of EDCUtah
THE ADVISOR | 23NOWHERE TO GO
ADDRESSING UTAH'S HOUSING CRISIS
OUR POPULATION IS GROWING, HERE'S HOW
THE HOUSING MARKET CAN KEEP UP.
There’s no doubt about it: housing has become quite the hot-button topic throughout the state of Utah.
Utah’s population is growing at a rate more than double the national average with the second highest job
growth in the nation—and housing can’t seem to keep up. According to the Housing Gap Coalition, Utah
currently has more households than available housing units. And those available housing units are ever
increasing in value, making them unaffordable to many new and low-income potential homebuyers. Even
rental rates have been increasing over the last several years—and in Salt Lake City there are now more
renters than homeowners. Many believe that the next generation is facing a bonafide housing crisis.
BY ELLE GRIFFIN
24 | THE ADVISOR THE ADVISOR | 25Annual Gap: Difference in Households and Housing Units, Utah
14,000 250,000
13,550
12,000
200,000
10,000 9,731
can," he says. Because they can make more
150,000 money on a million-dollar home than they
8,000 do an $80,000 home, the market has become
driven toward more expensive homes.
6,515
The same concept has driven up rents.
6,000
100,000 "[Apartment buildings] require investors,
4,520 4,575 and those investors expect a certain return.
4,000 If they build an 80-unit complex and
charge $1,200 a unit, returns are going to
2,664 50,000 be much higher than if they charge $1,000
2,000 1,445
174.272
150,669
108,382
170,206
164,008
211,115
176,411
111,455
162,288
a unit." Because of this, more than 125,000
88,670
households spend 50 percent of their
income on rent, leaving little remaining
0 0 for food, vehicles, children—or saving for a
2011 2012 2013 2014 2015 2016 2017 1971-1980 1981-1990 1991-2000 2001-2010 2011-2020 house.
SOURCES: US Census Bureau and Kem C. Gardner Policy Institute Housing Units Households WHAT TO DO ABOUT IT
It's a complicated problem to solve. One way
But, according to Mary Street, executive vice president And they definitely don't want to spend time weeding their to change that, Vernon suggests, is to make
and associate broker at Colliers International, the housing flower beds. up the $200 gap at the state or city level.
problem is not just an issue of there not being enough As Street says: "It's my dream to have a garden. Not my Zoning requirements can help by limiting
homes. To her, the housing shortage is actually a shortage in kids' dream." lot size, causing homes to be smaller and
housing that is affordable and desirable. To build a strategy prices to be lower. Housing vouchers, tax
that ensures access to homes for the next generation, we WHAT THE NEXT GENERATION NEEDS Projected Increase in Households in Utah, 2017-2022 breaks or incentives can also help fill the gap
need to keep those things in mind. between what developers would make at a
Housing affordability, of course, is still a much bigger issue. market rate versus what they would make
WHAT THE NEXT GENERATION WANTS "The largest group of people entering the housing
35,000 below it.
Recently, a woman in front of Street at a grocery store was market are the millennial generation," she says. "And the Either way, a better line of
complaining to a friend about her daughter. She said that millennial generation has seen several good curves in the 30,000 communication can't hurt. According to
she had helped her daughter buy a beautiful home, only economy." Not only did they see the country at a time of Street, there's a big disconnect between
to find that her daughter took no pride in it. She never financial crisis, but they also saw the bounce back from the generation that's enacting housing
weeded her flower beds, and so the mother had to go over that crisis. They were able to attain good, high paying jobs.
25,000 legislation and the generation that's actually
to her daughter's home and weed them herself. They've experienced wage increases and a time of great buying homes. "The folks who are most
According to Street, this is exactly the sort of cautionary financial prosperity. 15,000 impacted by this shortage will have to weigh
tale the housing conversation needs to consider going However, many of them are also facing enormous in. They're going to have to run for city
forward. "It's not just a supply and demand question," student loan debt. In the United States, over 44 million council. They're going to have to volunteer
she says. Supply and demand economics assume that if borrowers owe a total of $1.5 trillion—that's twelve zeros—
10,000 in their communities and give counsel
we increase supply, prices will go down, thereby allowing in student loan debt. More than national credit card or auto about what it means to make good, healthy
more houses to become available at more affordable rates, loan debt. Over 70 percent of students who attend four- 5,000 communities. Because as long as we have a
solving the housing crisis altogether. But that's not always year colleges graduate with student loans. Even though debate between one generation's perception
the case. Utah has the lowest student loan debt in the nation, the of what's desirable, and what the generation
The next generation of homebuyers have very different average borrower still owes a massive $19,975. This loan-
0 entering the market actually want, it will
preferences than their Baby Boomer parents. They don't payoff is causing delays in major purchases, including 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 never work. You can't just build more units
want large homes in suburban housing developments with homes, especially as the cost of housing continues to rise. and solve it." And talking about it seems
expansive yards that they're left to take care of. They want Robert Vernon, CEO at the Provo City Housing Housing Units Households like a great start, because, after all, a house
small homes near friends, restaurants and yoga studios. Authority, is dealing with this problem head on. divided against itself cannot stand.
They want high-speed internet and access to open space. "Developers will build as big and as expensive as they SOURCES: Kem Gardner Policy Institute, University of Utah.
26 | THE ADVISOR THE ADVISOR | 27You can also read
