SALT LAKE CITY — The Utah commercial real estate market still has a long way to go before it begins to rebound from the current economic slump, according to a local analyst.
Speaking to an audience of about 520 people at the Utah Commercial Real Estate Symposium in downtown Salt Lake City, Michael Morris, vice president of the Zions Bank real estate banking group, predicted this year would be a lot like last year: very challenging.
"The recession we're experiencing now is an over-leveraging event," said Morris, who prefaced his comments by stating he was not speaking on behalf of Zions Bank.
He said previous downturns have been due to over-building. Because this recession is debt- and credit-driven, he said, 2011 will probably be the time the market begins to make a more sustained comeback.
One analyst predicted that 2010 will "likely bring flat to slightly negative growth" in commercial real estate. Wesley Cornelison with CB Richard Ellis wrote in the symposium market analysis that it will probably "take several years to work out office space usage inefficiencies once job growth starts to rebound" in the Salt Lake metro area.
The retail and industrial sectors are also expected to struggle through 2010 as the economy struggles, the report stated.
Meanwhile, the event's keynote speaker, Gov. Gary Herbert, said his administration is dedicated to helping the market grow through policies that promote "free markets."
Free markets and free enterprise are critical to growing a strong state economy, he told the audience of commercial real estate professionals in the ballroom of the Hilton Hotel.
"Every decision I make is based on the prism of 'Will it grow the economy?' " Herbert said.
If the state is unable to grow, it won't have the financial resources necessary to accomplish its economic goals, he stated.
To that end, Herbert — who once owned a real estate firm — said he work diligently to provide an environment that will be conducive for business growth.