To Utah!
Texas might be the darling of investors, but there are of other Western markets attracting SoCal investors, such as Salt Lake City. (Really, can any property compete with a tabernacle?) Recently, a private SoCal investor bought the 69k SF Plaza 7-21 in Salt Lake for over $12M from Tustin-based Kensington Real Estate Group. The property is a retail center with an office component, located in the Sugar House neighborhood not far from the airport and downtown Salt Lake. It's 97% leased to Sketchers, Jimmy John's, Fast Signs, Jenny Craig, Rumbi Island Grill, and more.
"Yields in Utah are going to be considerably higher than coastal markets, providing a cap rate/yield arbitrage opportunity for investors, particularly those in a 1031 exchange," says CBRE SVP Phil Voorhees, who repped the seller with colleague Eric Gustafson. The Salt Lake City market fared comparatively better during the recession than many other interior markets, he explains, with a combination of affordability, a four-season climate, and higher education opportunities that appeal to tech and other growth industries.
