Saturday, July 28, 2018

Vacancy Rates

Recently saw the Q2 commercial vacancy rates for Salt Lake County, broken down as residential, office, retail, manufacturing, and warehouse.  It looked like a very rosy picture, with low vacancy rates all around.  Personally, I think they smell.  Like mackerel in the moonlight, they shine and stink.  Manufacturing and warehouse are low because they're being converted into the other areas and aren't being replaced.  Multifamily residential is low because people can't afford to buy.  As for office, there are thousands of square feet that are leased but are currently unoccupied (ostensibly because the lessee needs room for expansion, but we'll see how much of that happens) or are being used for on-site storage.  As for the retail numbers, someone is lying.  They pass neither the eyeball test nor the smell test.  Drive around the valley and look at the empty space.  Doesn't matter what kind of retail it is, the vacancy rates are high.  Anybody who thinks otherwise is living in a cave.  It's like just about every other bit of news about our "booming" economy: It only works by being highly selective with the data and then not examining the analysis very much.

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