Salt Lake City Commercial Office Space for Rent

Q4 2025

Salt Lake City Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Salt Lake City commercial real estate (CRE) market is navigating a period of stabilization and recalibration as 2025 concludes. The Office sector is finding its footing, with vacancy rates beginning to stabilize after a period of adjustment, particularly in the Class A segment [1, 2]. Industrial markets remain robust, with healthy leasing activity and vacancy rates holding steady despite new supply additions [4, 5]. Retail is a standout performer, characterized by low vacancy and strong demand for neighborhood centers [3]. Multifamily is tightening as construction activity moderates, leading to renewed rent growth and high occupancy [6, 7].

TenantBase Proprietary Data [8] highlights the distribution of active tenant demand over the last 90 days (113 total deals):

  • Retail/Storefront led market activity with 57.52% of all searches [8].
  • Warehouse was the second most active sector at 24.78% [8].
  • Office accounted for 18.58% of total search volume [8].

Office Market

Market Overview Salt Lake City's office market is showing signs of recovery, with vacancy rates leveling off and leasing activity picking up, particularly for smaller, high-quality spaces.

  • Vacancy & Availability: The overall vacancy rate stands at approximately 17.8%, with Class A vacancy slightly lower as tenants upgrade their space [1]. Availability remains elevated but is showing signs of tightening in prime submarkets like Downtown and Sugar House [2].
  • Net Absorption: Net absorption turned positive in Q3 2025, driven by tech and professional services tenants [1].
  • Rental Rates: Asking rents have stabilized at $26.50 per SF full-service, with Class A rates holding firm above $30.00 per SF [2].
  • Market Drivers: TenantBase data indicates a preference for flexibility, with 35.00% of office inquiries seeking leases of Less than one year and another 35.00% seeking 2-3 Year terms [8].

TenantBase Activity [8]

  • Demand Share: Office accounted for 18.58% of total search volume [8].
  • Lease Term Preference: Demand is split between short-term flexibility and mid-term commitments:
    • Less than one year: 35.00% of deals [8].
    • 2-3 Years: 35.00% of deals [8].
    • 5+ Years: 20.00% of deals [8].
  • Size Requirements: The average lower size requirement for office space is 1,500 SF for short-term leases, reflecting a market driven by smaller tenants [8].

Industrial & Warehouse Market

Market Overview The Salt Lake City industrial market remains a key logistics hub, benefiting from its strategic location and strong regional economy.

  • Vacancy & Rent: Vacancy held steady at 4.8% in Q3 2025 [4]. Asking rents continue to rise, averaging $0.85 per SF (NNN) for warehouse distribution space [5].
  • Demand & Supply: Leasing activity is healthy, with 3PLs and manufacturing users driving demand [4]. The construction pipeline is active but moderating, which should help keep vacancy in check moving forward [5].
  • Leasing Highlights: TenantBase data shows steady demand for mid-term leases, with 27.27% of warehouse inquiries for 2-3 Year terms and 27.27% for 3-5 Year terms [8].

TenantBase Activity [8]

  • Demand Share: Warehouse accounted for 24.78% of total search volume [8].
  • Lease Term Preference: Demand is spread across lease terms:
    • 2-3 Years: 27.27% of deals [8].
    • 3-5 Years: 27.27% of deals [8].
    • Less than one year: 18.18% of deals [8].
  • Size Requirements: The average lower size requirement for warehouse space is 7,500 SF for 2-3 year terms, indicating demand for mid-sized distribution space [8].

Retail Market

Market Overview Salt Lake City's retail sector is thriving, with strong population growth fueling demand for goods and services in both urban and suburban corridors.

  • Vacancy & Availability: Retail vacancy is extremely tight at 3.5%, one of the lowest rates in recent years [3]. Availability is scarce in prime centers, driving competition among tenants [3].
  • Rental Rates: Rent growth is robust, rising 3.8% year-over-year to an average of $21.50 per SF (NNN) [3].
  • Construction: New retail development is focused on grocery-anchored centers and mixed-use projects in high-growth areas like Lehi and Herriman [3].

TenantBase Activity [8]

  • Demand Share: Retail/Storefront activity dominated with 57.52% of all search volume [8].
  • Lease Term Preference: Retail tenants show a clear preference for stability:
    • 3-5 Years: 32.26% of deals [8].
    • 1-2 Years: 19.35% of deals [8].
    • Less than one year: 16.13% of deals [8].
  • Top Locations: Tenant interest is highest in Salt Lake City (8 deals) and West Valley City (6 deals) [8].

Multifamily Market

Market Overview The multifamily market is stabilizing as it absorbs a wave of new supply, with occupancy rates holding firm and rent growth poised to return.

  • Vacancy & Occupancy: Vacancy is estimated at 5.8%, slightly elevated due to recent completions but trending downward [6].
  • Rents: Rents have flattened or dipped slightly by 0.2% year-over-year, averaging $1,525 per unit, as landlords use concessions to lease up new properties [6].
  • Construction: The construction pipeline is thinning, with starts down significantly from their peak, which will support tighter conditions in 2026 [7].
  • Investment: Investor interest remains strong, with sales volume picking up as pricing expectations adjust [6].

2026 Outlook

Looking ahead to 2026, the Salt Lake City market is positioned for continued growth and stability.

  • Multifamily Recovery: As new supply tapers off, multifamily vacancy is projected to compress, supporting rent growth of 2-3% in 2026 [6].
  • Industrial Strength: The industrial sector will continue to benefit from regional growth and logistics demand, with rents expected to rise further [5].
  • Retail Resilience: Limited new supply and strong consumer spending will keep retail vacancy low and rents rising [3].

Sources

  1. Newmark: Salt Lake City Office Market Overview Q3 2025
  2. CBRE: Salt Lake City Office Figures Q3 2025
  3. Marcus & Millichap: Salt Lake City Retail Market Report Q3 2025
  4. Newmark: Salt Lake City Industrial Market Overview Q3 2025
  5. CBRE: Salt Lake City Industrial Figures Q3 2025
  6. Yardi Matrix: Salt Lake City Multifamily Market Report – September 2025
  7. Berkadia: Salt Lake City Multifamily Report Q3 2025
  8. TenantBase Proprietary Market Data (Salt Lake City - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.