BEBR Research Study Shows Slowest Recovery of Any Post-World War II Housing Cycle

A new study out of the Bureau of Economic and Business Research at the University of Utah’s David Eccles School of Business recently found that this most recent housing cycle has shown the slowest recovery of any post-World War II housing cycle.

Published in BEBR’s latest issue of “Utah Economic and Business Review,” the study analyzed the current housing cycle. The study specifically explored the impact of the Great Recession on Utah’s housing industry, comparing Utah with the rest of the nation. The current cycle has had a number of unique characteristics: falling housing prices record levels of foreclosures and underwater mortgages, a shrinking job market and the lowest mortgage rates since the 1950s.

Although Utah’s housing market has struggled, its real estate industry has fared better. Existing home sales in some Utah counties have recovered 80 percent from the pre-recession peak and the median sales price of a home has fully recovered.

For the entire article, including notable findings: BEBR

Study shows economic development value of historic preservation

Preserving historic buildings and sites creates jobs and increases property values, according to a study released Monday by the Utah Heritage Foundation.

The study, conducted by Washington, D.C., real estate and economic development consulting firm PlaceEconomics, found that 7,313 jobs were created annually directly or indirectly by the heritage portion of Utah’s tourism industry. In addition, 4,969 total jobs were created between 1990 and 2012 using federal or state historic tax credits, according to the report.

Sixty-two heritage sites and events were visited and evaluated between November 2012 and June of this year for the study. Based on 2012 data, those sites attracted more than 7.2 million visitors annually and show visitors spending nearly $400 million a year.

Using data from an econometric model called Implan, the study indicates that for every $1 million invested in rehabilitating historic buildings in Utah, 17.7 direct and indirect jobs are created, resulting in $850,554 in direct and indirect salary and wages. The $1 million also generates almost $100,000 in economic activity elsewhere in the economy, as well as $34,217 in state sales tax and indirect business tax, according to the study.

Utah Heritage Foundation executive director Kirk Huffaker said the complete 24-page report will be available next month. Deseret News

Industry making its way back to Southern Utah

Crews are finishing work on the 800,000-square-foot Family Dollar distribution center, an $80 million project expected to open operations this summer. The Family Dollar facility has been touted as bringing in 350 much-needed jobs to Washington County, along with the ancillary benefits that come from having such a large operation.

In addition, local firms that measure the manufacturing industry are seeing a steady decrease in vacancy rates on industrial properties. The rates are back below 10 percent after hovering in double digits for several years according to NAI Southern Utah.

 In Iron County, vacancy rates are still much higher, at 24.6 percent, according to NAI’s research, but rates have improved for spaces less than 20,000 square feet and lease rates are ticking up slightly as well, indicating that things may be trending positively. The Spectrum

Protecting Hill Air Force Base — Utah style

Many in Davis and Weber Counties are closely watching the budget drama playing out in Washington, D.C. and the clock ticking down on the automatic spending cuts that could deeply impact Hill Air Force Base.

The base is the sixth-largest employer in the state and the largest single site employer with 22,000 employees, of which 63 percent are civilian employees. The impact to the state’s economy from the base is huge, $3 billion, and obviously that impact is felt mostly in Davis and Weber counties.

As a state, our hands are tied when it comes to the federal funds that support the base. There isn’t much we can do to protect Hill AFB from federal budget cuts except to urge our leaders in Washington to take responsible budget actions. However, together with my legislative colleagues from Weber and Davis counties, we are taking action to make Hill AFB as attractive and viable as possible by making it a center for aerospace technology. We can’t control the federal funds that go directly to the base, but we can enhance the supporting infrastructure surrounding the base that gives it technological synergy and relevance.

Unlike other states, Hill AFB is surrounded by supportive communities and has tremendous state support. One of the important local projects is the Falcon Hill development. Falcon Hill National Aerospace Research Park is the Air Force’s largest enhanced use lease office park project. This project allows the Air Force to take underutilized land and lease it to a developer offering general public accessibility. Over the past six years in support of this development, the state has funded over $18.7 million in transportation and infrastructure upgrades. We are working to appropriate additional funds this year for redevelopment projects at the North Gate.


A significant portion of the Falcon Hill land contains World War II area storage buildings that over time were converted into offices buildings. After 70 years of use the buildings now pose maintenance, energy, parking and safety problems. They needed to be replaced, but because of budget constraints, the Air Force prioritized runways and hangers, not office buildings.

By leasing this underutilized land to a commercial developer, the Air Force receives revenues it can use to construct new or, repair and maintain other aging infrastructure on Hill AFB. Plus, such commercial buildings on federal land are subject to property tax. These buildings house commercial businesses that generate other tax revenues and add to Northern Utah’s economic growth and job opportunities.

Today, Falcon Hill has its first commercial office building housing the ICBM support contractor’s workforce and meets all the latest anti-terrorism force protection standards and design features. This is the first building of a future complex of five government and commercial facilities that brings together the Air Force and its support contractor side by side.

The state and local communities were able to partner and support this project by helping fund the road construction necessary to access the new commercial space. Particularly at the West Gate entrance to the base, the state’s support has been critical. Not only has the base received a new structure that incorporates the latest threat protection features, its new location allowed for transportation improvements to Northern Utah. Early morning backups onto the freeway no longer happen, with the resulting elimination of a serious transportation safety issue.

This development is a model for the rest of the country because it ensures even greater focus of resources in the future. A large component of the activities on the base is in high technology. We can do more than just protect the existing jobs at Hill AFB, we can grow new opportunities around the base that put the future of Hill AFB; and the related jobs in our hands instead of the federal governments. Standard Examiner

Commercial real estate activity returning to normal

Salt Lake County’s multifaceted commercial real estate industry— made up of retail, industrial, office and apartment markets that don’t always move in tandem — is entering the new year in better shape than in a long time.

It’s not back to 2007, when industries were humming and the recession was yet to hit in full force. But many of the components that the commercial real estate sector uses to measure the sector’s vigor have stabilized over the past two years, and 2013 shows signs of shaping up nicely.

Last week, the commercial real estate and consulting firm released its annual review of commercial real estate action in Utah’s biggest counties. Although the office, industrial and real estate markets are each driven by different factors, the overall level of activity suggests that the industry is returning to normal long-term performance levels. Salt Lake Tribune

Extra Space Storage to Acquire 21 Properties from Partner

Extra Space Storage Inc., a Salt Lake City-based real estate investment trust that operates in the self-storage industry, said it is poised to acquire interest in 28 additional properties for approximately $190 million.

The company said it signed a letter of intent with one of its joint venture partners to acquire that partner’s interest in 21 self-storage properties in 11 states. Those properties, according to Extra Space, contain approximately 1.7 million square feet of rentable space in 13,600 units.

In addition, the company said it has entered into a purchase agreement to acquire seven additional properties in Florida, Maryland, Massachusetts and New Jersey.

Those properties contain about 5,800 units with some 575,000 square feet of rentable space.

The company said it plans to sell 5.2 million shares of its stock in a public offering to fund the acquisitions. Salt Lake Tribune

Utah leads in commercial real estate construction

Reflecting a national trend, Utah is seeing a rebound in the development and construction of commercial real estate, according to a national group.

Utah ranked sixth in the U.S. in 2011 for direct spending across all categories of commercial real estate, the Commercial Real Estate Development Association reported.

That's up from Utah's 2010 ranking of No. 26. Only West Virginia saw a bigger jump, from No. 48 to No. 3.
According to the study, $3.6 billion was spent in Utah last year on the development and construction of office, industrial and retail buildings, which supported 77,550 jobs.

"It's not just one thing, it's a bunch of things," said Craig Thomas, senior vice president for the national association, which represents commercial real estate developers, owners and investors. "We have been able to come out of this economic downturn faster."

He attributed the surge in part to the migration of businesses from California to Utah, citing multimillion dollar facilities built here by companies such as eBay, EMCCorp and Adobe. Standard Examiner

Taco Bell operator looking for more Utah locations

The Salt Lake City office of the commercial real estate brokerage CBRE said it has been chosen by Taco Bell franchisee Mark Peterson to help select the sites for several new locations in Utah.

The Mexican-style fast food restaurant chain will open a 2,500-square-foot store in Payson in May, and several more stores are expected to be announced soon, including one in Herriman, where Peterson already has purchased land.

Russ Harris, vice president and retail specialist at CBRE, represents Taco Bell. "It has been more than 10 years since Taco Bell has opened a new location in Utah," Harris said in a statement announcing the deal with Taco Bell’s franchisee. "They recognize that Utah has a vibrant, expanding economy and is well positioned for growth."

He said the new locations will be in areas with rapidly growing populations. Salt Lake Tribune

Seven Utah contractors make ENR Top 400 list

Seven Utah-based commercial contractors were included 2011 list of the top 400 contractors in the United States, a list published annually by the Engineering News Record.The rankings are recognized in the construction industry as the standard by which construction companies are rated. Layton Construction, the largest contractor in Utah, led the Utah-based companies at number 64, which included Okland Construction (78), Jacobsen Construction (132), Clyde Companies (202), Big-D (204), R&O Construction (243), and Wadsworth Brothers Construction (399).

Utah's construction companies mirror the tough market conditions nationwide, continuing to slide from record-high revenues in 2008. The Cumulative revenue of the top four Utah-based contractors on ENR's Top 400 list fell from $2.94 billion in 2008 to $1.92 billion in 2010, a 35 percent decline. Deseret News