Despite positive absorption and dipping vacancy rates, there’s still an eerie quiet among office developers in the Salt Lake City region.
Not so long ago, three developers Downtown had luxury office towers in their site plans. Two of those projects are dead, while the other is parked on the drawing board waiting for a change in market conditions.
Indeed, “There’s not a single crane along I-15,” a local market leader for a global real estate firm reminded us last week.
That company, JLL, released their Q2 office market study earlier this month, and the Salt Lake City market is showing some positive signs of stabilization. Let’s take a look at those numbers as well as the local office tower proposals that we can say goodbye to.
Some numbers from Q2
The good news that topped the report authored by JLL’s Research Director Sam Newberg is positive absorption.
Overall leasing volume in the Salt Lake market in Q2 topped 600,000 sf, which pushed absorption to 263,531 sf so far in 2025. Most of those were subleases, the largest being Advanced MD signing for 66,500 sf at SoJo Station South and e-Bay’s 49,950 sf at the Vista Station 9 project, both in the Silicon Slopes submarket.
Silicon Slopes led leasing geographically, accounting for 47% of all activity, while the Greater CBD provided 29%.
Those numbers were enough to bring vacancy down to 18.6%, according to JLL’s data.
Yet the availability of sublease space continues to rise, to 3.7 million sf in Q2.
David Nixon, a Senior Managing Director at JLL’s Salt Lake City office, highlighted what the high volume of sublease space available means for current conditions.
“Hopefully we’re bottoming out on sublease space, because there is so much out there.” Nixon told Building Salt Lake last week. Yet, he added, “We’re still bullish on the Salt Lake market.”
Sales are up nationally quite dramatically, according to Avison Young data reported by Bisnow. Those numbers for 2025 were driven by trophy and Class A spaces.
Notable sales locally reported by JLL were led by South Towne Corporate Center I and II for $29.3 million to Fort Street Partners. In Research Park at the University of Utah, the U. acquired 15 Arapeen Drive for $16 million, and Alloy Real Estate bought Union Woods in Union Park for $15.9 million.
Projects proposed locally – will any survive?
We’ve been keeping our eye on proposed office tower projects Downtown, last giving you an update in March. The feverish years leading up to the COVID pandemic looked to undo the typical cycle of one office new office tower built every ten years Downtown.
The McWhinney block on 600 South
Denver-based McWhinney’s former Red Lion Hotel properties at 101 W. 600 South are still listed for sale, as we first reported in spring 2024. The north tower at the property, a former 204-room hotel, sits vacant, while the south building, named Lattice after being converted into 184 studio apartments, is lease stabilized.
McWhinney’s original site plan for the west end of the property, currently a large surface parking lot, included an office building targeting the life sciences industry.
That plan, including McWhinney’s participation in the Salt Lake market, looks to be past tense. The properties are now pushing 18 months on the market.
The Sundial Tower on Main
A quirky roof line and a strategic location between courthouses weren’t enough to save the Sundial Tower project at the Courthouse TRAX station at 477 S. Main.
David Nixon of JLL Salt Lake City told us last week that “we’ve scrapped that project.” JLL was to be a development partner of the Sundial with Hines, whose commitment to a residential tower at the former Utah Theater site at 150 S Main remains under question.
Hines representatives did not immediately answer our inquiries for comment, but has noted in the past that “current economic conditions limit our ability to launch the initially planned project for this site at this time.”
Interestingly, Hines just presented plans to build a massive new office tower in San Francisco. As part of mixed-use redevelopment on Market Street in the Financial District, it’s pegged to be the tallest building on the West Coast.
Hines, which added the muscular Transbay (now Salesforce) Tower to the apex of the city’s skyline in 2018, continues to bet big on the capital of NorCal.
This, despite San Francisco’s office vacancy rate currently topping 30%. Hines’ new tower would add 1.6 million sf to the market.
The West Quarter
The lone office project that may still be breathing is the Ritchie Group’s Phase Two of the West Quarter development.
The West Quarter, which strategically sits adjacent to the Delta Center, Smith Entertainment Group’s sports and entertainment district, and the Salt Palace Convention Center, may yet produce Downtown’s next office tower.
Principal and Founder of the Ritchie Group, Ryan Richie, told us last week that “We’ve got our eye on the office market as well. While we’d love to build a trophy office tower in one of our future phase(s), that will all depend on the capital markets and market conditions at the time.”
“We haven’t locked into our next phase and won’t until we have a clearer picture of what’s going to happen with the convention center and SEG’s entertainment district,” Ritchie said in March.
Demand is strong for top-shelf space, so why no construction?
We asked Nixon, the lead at JLL’s Salt Lake City office, to explain the barriers to moving ahead to meet what looks like sustained demand for top-quality office product.
“You can’t get financing,” Nixon said. “Office is hard to pencil.” As mentioned by Ryan Ritchie, capital costs are killing office development initiatives. “ Right now,” Nixon told us, “You would have to be getting $70/sf to make it work.”
The Salt Lake market is nowhere near that lease rate. Downtown’s latest trophy-level office building, 95 State, completed in 2021, is currently maxing out at $47/sf.
Nixon, reflecting a universal mood among investors, also mentioned the “economic uncertainty” currently gripping the country.
Despite that uncertainty, demand for top-shelf office space looks to remain. It may only be high interest rates that stand in the way of another spurt of new construction.
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