View Single Post
  #5792  
Old Posted Aug 27, 2019, 5:30 PM
Makid Makid is online now
Registered User
 
Join Date: Jun 2006
Posts: 1,604
I think the odds are fairly good for most of the projects to happen.

The reason is that even with a recession, banks will still give loans for apartments provides the vacancy rates are below a given threshold. For the 2007/2008 that level was set at 7%. Condo projects needed to have at least 55% pre-leased and Commercial needed 50%. This is why the last recession hit construction so hard. The exception was along the Wasatch Front as City Creek was primarily self funded.

The current vacancy rates for apartments in SLC is around 4% currently.

For the projects that are in the works we have:

Tower 8 - Commercial (self funded so will be completed)
CCH - Funding is already secured
Liberty Sky - Residential
Utah Theater - Residential (Backed by Hines and has access to direct funding)
Kensington Tower (Carl's Jr) - Residential
370 Millennium - Mixed use. Last I heard would include Hotel, Commercial and Residential of roughly 1/3 breakdown for each.

Then we start going to the shorter proposals.

255 S State - Residential
Block 67 (West Quarter) - Residential and Hotel (Funding secured for Phase 1)
650S Main - Commercial (Phase 1 has secured funding)
Salt Development - Commercial
655S Main - Residential

Overall, I am most worried about Kensington Tower as it just seems overly optimistic based on their previous projects. Otherwise, my worry rests squarely on the need for more construction workers.

This isn't just a worry, it stalled 650S Main as the cost for workers increased dramatically when the Airport was started and the costs haven't come down yet. This is one reason that they haven't started yet.

Other projects have locked in the workers they need - Tower 8, CCH and Phase 1 for Block 67. I would like to think that Liberty Sky has the workers locked in but I don't know anyone involved that could provide clarity. If Liberty Sky does have the workers locked in, are there enough workers available for the other projects to even start over the next 24 months?
Reply With Quote