ST. GEORGE — According to NAI Excel, a significant player in commercial real estate, Southern Utah will continue to be the place to live, work and play.
In an interview with the St. George News, Wes Davis, NAI senior vice president explained why.
“We are tracking the trends during the past 10 years as well as looking forward,” Davis said. “Looking at the overall market segment in commercial real estate we anticipate things to continue to be strong. Vacancy continues to decrease, rental rates continue to go up and any investment properties that are properly priced typically have multiple offers.”
Even if there were a 5-10% correction in the local commercial real estate market, Davis added, he doesn’t believe it will be “all bad.”
“Most of our contractors are out far enough on the demand that they have for work,” he said. “I don’t think a correction would have a terrible, negative impact.”
NAI Excel is part of the NAI Global network, with more than 400 offices and 7,000 employees covering nearly every major market nationally and across the globe.
The transformation in the country’s economy from 2010 to 2020 has been tremendous. Utah has been a beneficiary as businesses and people are attracted to the Beehive State and Southern Utah because of favorable economic policy and quality of life.
Data suggests that the St. George metro area added 3.6 million square feet of office, retail and industrial buildings along with more than 48,000 residents since 2010. The Kem C. Gardner Policy Institute projects during the next decade another 65,000 people will move to Washington County.
Although new construction paused following the Great Recession, it is considered at full capacity. More than 95 million square feet of office, retail and industrial construction has been built out from Salt Lake City to Las Vegas during the past decade.
Even with significant development during the last 10 years, population growth has outpaced commercial construction, according to NAI. This, the company said, may be partially the result of the large oversupply of space in 2010.
Available inventory in 2020 remains tight, and population growth continues to increase. Looking forward to 2030, if people continue to move into the region, NAI anticipates commercial construction to increase as well.
Industry experts say that population growth, while it brings many positive benefits, can drive housing costs up and create a supply and demand dilemma.
Davis said Southern Utah is on a path to alleviate the problem of attainable housing.
“In addition to the new apartment complexes coming, we are going to see several new townhouse projects in various parts of the county,” Davis said. “I think we are going to see a wide array of pricing structures based on amenities, size, garages versus no garages, St. George versus Hurricane and other areas.”
Although Davis is pessimistic of new home prices in the $100,000 to $200,000 range, he is optimistic on continued strength in the housing market.
“I think what we need is a complete change in mindset,” he added. “There is a place for people who have been here for 20 or 30 years, but as we see St. George growing and developments with a different way of thinking, like Desert Color, CareFree Homes coming in from Texas, Visionary Homes coming in from northern Utah … it will provide opportunities and submarkets that may not have been traditionally serviced by long-time established developers and construction groups.”
People are discovering that Southern Utah is the place to live, work and play, Davis said.
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