Developers back out of two more east side projects amid ongoing slowdown

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In the latest signal of a broad development slowdown in Salt Lake City, a pair of high-profile developments are the latest to hit the market after releasing plans for housing projects.

Unico has backed out of its plans to turn an old data center at 205 E. 200 S. into a mixed-use housing project, and the property was put up for sale.

Another project in the Granary District, which already went through the entitlement process, recently hit the market for $18 million.

Both projects had promised to bring hundreds more housing units to the city. But they join a growing list of sites whose owners are opting to sell rather than carry through with development after interest rates spiked, amid an incoming glut of new inventory, and as the market for selling apartment buildings has skid to a halt.

Apartment sales fell at the fastest rate since the Great Recession during the first three months of the year, according to a new report from the commercial real estate firm CoStar. Sales fell to $13.9 billion in the quarter, down 88 percent from a peak of $115.5 billion in the final three months of 2021.

That’s made things difficult for developers who build and lease up new residential buildings before looking to sell them to investors who own them long term.

As a result, a number of projects in Salt Lake City — as well as across the country — have been put on hold.

Unico had been planning to turn a former data center, with its unique floor plan and tall ceiling heights, into housing in the Central City portion of Downtown.

“You kind of think about gutting the building down to a concrete shell and just rebuilding it,” Ned Carner, chief investment officer with Unico Properties, told us in September. “We’re going to have a very, very well amenitized building.”

Brokers with Cushman & Wakefield are marketing the site as a prime candidate for adaptive reuse. 

The building includes 305,000 square feet of space on huge floor plates and with 16- to 17-foot ceiling heights.

The price for the property wasn’t disclosed, but the Cushman & Wakefield team said it was “significantly below replacement cost.” There is no price on the listing.

The data center project Downtown promised to be among the most unique housing retrofits in the city, converting a space with tall ceilings into two-story townhome style apartments, along with other units. The project also would have included a mid-rise apartment building to the north.

330 W. 800 S.

In the Granary, a project sought to include 6,440 square feet of retail, 3,120 square feet for a lobby, resident amenities including a pool, and 336 new residential units.

The developer is Convexity Properties, which is actively building a high-rise residential tower at 275 S. 200 E. Downtown.

The Granary project missed opportunities to link up with other nearby projects to split up the Salt Lake City-sized block into smaller parcels with midblock walkways. It instead maximized the footprint of the project and cut off a potential connection with a project to the west.

Any future owner would have to go through changes with the city to even allow for such a connection to occur, given the development is for sale as approved. 

That isn’t the only project to have gone through the entitlement process only to end up on the market.

Multiple other projects, a number of them on the west side, have turned up for sale as the market rapidly slowed down.

The broader slowdown is affecting the real estate market broadly, and anything that’s not in an opportunity zone could be considered at risk.

The Granary project sits within an opportunity zone. The data center does not.

Email Taylor Anderson

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Posted by Taylor Anderson

Taylor Anderson grew up near Chicago and made his way West to study journalism at the University of Montana. He's been a staff writer for the Chicago Tribune, Bend Bulletin and Salt Lake Tribune. A move from Portland, Oregon, to Salt Lake City opened his eyes to the importance of good urban design for building strong neighborhoods. He lives on the border of the Liberty Wells and Ballpark neighborhoods.