ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International

 
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
ADVISOR
         COMMERCIAL REAL ESTATE 2019
THE

  UTAH: AN EVOLUTION STORY
       STATE OF THE MARKET | THE LAST MILE
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
“ 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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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
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                                                                                                                                                                                                                                                    SPANISH SPEAKERS               SPANISHZSPEAKERS
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                                                                                                                                                                                                                  UTAH’S ECONOMY                UTAH’S  ECONOMY IN 2018
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                                                                                                                                                                                                                     81,9(56,7
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
“ 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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
“ 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
ADVISOR - UTAH: AN EVOLUTION STORY STATE OF THE MARKET | THE LAST MILE - Colliers International
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 |   19
TOP 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.

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Photo courtesy of EDCUtah
                            THE ADVISOR |   23
NOWHERE 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

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Annual 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.

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