Downtown SLC office sector lags, but nightlife and new residents are making up for it

Signs that the pandemic shift to hybrid work isn’t going away anytime soon — if ever — are easy to spot across downtown Salt Lake City.

On any given weekday, one in three office workers who commuted to the central business district in late 2019 are instead working remotely now, pushing vacancies in commercial offices to new highs.

A story published Monday by The Salt Lake Tribune found vacancy rates around 25% for nearly 12.4 million square feet of office space available across downtown, along with widespread subleasing and slowed construction of new office buildings.

That number has climbed as high as 30% and 50% in parts of Salt Lake County as major employers put spaces up for sublease or sale and some industries lay off workers. Combined with interest rate hikes and widespread economic uncertainty, the office sector’s deepening downturn with all those empty cubicles and meeting areas could take years to improve, real estate brokers say, for Salt Lake City and other urban areas across North America.

Yet the heart of Utah’s capital is proving to be decidedly unlike other downtowns in other key regards.

An ongoing geolocation study of 62 U.S. and Canadian cities indicates that regular visits between December and February to an array of points of interest downtown — ranging from businesses, shops and offices to landmarks, parks and community hubs — are at 139% of their pre-pandemic levels.

Based on data from 18 million smartphones, the analysis by the Institute of Governmental Studies at the University of California in Berkeley shows no other large or midsize city in North America did better in that three-month period.

The analysis found that only Salt Lake City and four other places had central business districts with visits exceeding pre-pandemic levels: Bakersfield, Calif., at 118%; Fresno, Calif., at 115%; Columbus, Ohio, at 109%; and El Paso, Texas, at 106%.

First published in June 2022, the ongoing study of visitation patterns to downtown areas has concluded that low commute times and the presence downtown of jobs in key sectors such as hospitality, food service, health care and construction were shared traits for cities with rebounding downtowns.

“We have typically viewed downtown as an office worker environment,” said Dee Brewer, executive director of the chamber’s Downtown Alliance. “And what you see is that the majority of the visits are coming from people outside the area.”

Also bolstering visits are new residents pouring into the capital, Brewer said, with the number of people living downtown expected to double to 10,000 in just two years.