Mountain West Commercial Real Estate Releases Q2 2024 Market Report
Mountain West Commercial Real Estate (MWCRE), a full-service commercial real estate brokerage, releases its Q2 2024 Market Report, providing key performance indicators and market metrics for metropolitan areas across the Intermountain West.
Highlights:
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- Even with the almost weekly announcements of retailer store closures and bankruptcies throughout 2024, available retail space is in short supply. Vacancy ranged from 1.5% (Eastern Idaho) to 5.2% (Las Vegas) across the Intermountain West in Q2 2024 with six markets sub-3.0% vacancy (Billings, Boise, Eastern Idaho, Logan, Provo-Orem and Salt Lake City). Construction starts for the MWCRE coverage area for the first two quarters of 2024 is muted relative to the first two quarters of the last five years and under-construction square footage was at 2.7 MSF, above the 2.3 MSF five-year quarterly average.
- Industrial vacancy remains near recent highs for several markets (Billings, Boise, Las Vegas, Logan, Provo-Orem and Salt Lake City), but vacancy did subside from Q1 2024 to Q2 2024 for five of the nine market areas (Billings, Ogden, Provo-Orem, Salt Lake City and St. George) as several of the markets absorb a historic wave of new construction that delivered over the last several quarters. The construction pipeline is greatly diminished compared to the last few years and rent growth remains strong despite elevated vacancy, albeit tempered from the double-digit rent growth experienced in many markets from 2020-2023.
- In some positive news for the beleaguered office market, vacancy declined slightly or held steady from Q1 2024 to Q2 2024 for six of the nine market areas (Billings, Boise, Ogden, Provo-Orem, Salt Lake City and St. George). For most markets, rent growth has been flat since 2022. The Billings, Boise, Eastern Idaho, Logan, Ogden and St. George office markets are experiencing much lower vacancy (2.9%-5.9%) than Las Vegas, Provo-Orem and Salt Lake City (10.8%-11.6%) and slow rent growth in the former markets is much more a case of a lack of new Class A space in the market than an abundance of supply.
- Through the first half of 2024, investment transaction square footage is more in line with 2019-2020 levels for Idaho, Montana, Nevada and Utah as elevated interest rates continue to squelch activity. If the Federal Reserve cuts rates in September 2024 – as many investors are now anticipating – it is likely to spur movement after two consecutive years of declining activity.