Why A Chicago Real Estate Developer Is Setting Its Sights On Salt Lake City

Salt Lake City might pale in comparison to the high-rise office towers of Chicago, home to three of the world’s 20 tallest buildings. But it is a Chicago commercial real estate development firm that has set its sights on Salt Lake City and will soon change the city’s skyline forever. It all started more than a decade ago when Ron Lunt found himself spending the night in downtown Salt Lake City after being bumped from a Delta flight. "The next day I was walking around downtown," said Lunt, a partner at Hamilton Partners, a Chicago-based commercial real estate developer. "At that time the American Stores building on Main Street was under construction and it looked pretty good. The One Utah Center looked nice, but there wasn’t a lot of other good office space downtown." When Lunt returned to Illinois he asked Bruce Bingham, also a partner at Hamilton, to research Salt Lake City’s market. "From what I saw we could certainly compete," Lunt said. "And my sense was that the market was in pretty good shape." In fact, at a value of $2.23 billion, 1997 turned out to be a record year for Utah’s commercial real estate scene, according to James Wood, director of the University of Utah’s Bureau of Business and Economic Research. Driving the city’s growth back then was the ambitious construction of the 21,000-seat Conference Center by the Church of Jesus Christ of Latter-Day Saints. In addition, construction had started on the Grand America, a 775-room five-star hotel that the Wall Street Journal touted as rivaling New York City’s best hotels. Today, with the ongoing construction of the $1.5 billion City Creek Center, a 20-acre mixed-use development of retail, residential and office space, 2008 is on track to setting a second-place finish in commercial valuation to 1997’s record performance year. Such activity prompted Hamilton partners to invest in Salt Lake City. Not only is the Chicago developer constructing a new office tower, but the company has purchased several downtown landmarks including the Broadway Centre at 300 South State Street, the Lollin and Kerrick buildings on Main Street, and the Newhouse and Boston buildings on Exchange Place. In fact, Hamilton Partners recently completed a $10 million renovation to the Boston Building, a 100-year-old tower that is considered one of Salt Lake City’s first skyscrapers. "We are very bullish on Salt Lake City," said Bingham, who is also the chairman of the board of trustees of the Downtown Alliance of Salt Lake City, a non-profit organization that represents more than 2,500 business and property owners in a 40-block area of the city’s central business district. "We believe that 222 South Main represents an element of the renaissance of Salt Lake City. Salt Lake City probably had its downtown heyday in the 1950s. It was really downhill from there." However, according to Lane Beattie, president and chief executive officer of the Salt Lake Chamber, the city’s restoration is in full swing. "Four years ago there were four projects in the downtown area approved or under construction," Beattie said. "Today there are 54 projects under construction including condos, warehouses, offices, restaurants and hotels. Those projects are in addition to the City Creek Center." Driving new population growth in the downtown area is the addition of 750 residential units in five new towers in the City Creek Center, according to a recent report by the Bureau of Economic and Business Research. Currently, Salt Lake City’s central business district has roughly 3,700 housing units, about 1 percent of Salt Lake County’s total housing inventory. The 3,700 housing units provide housing for roughly 7,500 residents. But the number of residents living in the
downtown area is projected to grow to more than 10,000 people by 2011, according to the BEBR report. Tom Colemere, principal broker of Colemere Realty Associates based in Salt Lake City and a member of the board of directors of the Salt Lake Board of REALTORS®, believes downtown Salt Lake City will have a completely different feel and look in the next three years.
"City Creek will change the face of Salt Lake City," Colemere said. "I don’t recall ever seeing that much activity in downtown Salt Lake City in my 25 years as a commercial broker." Barbara Johnson, a commercial real estate agent with NAI Utah, said downtown’s resurgence can be traced, in part, because of the LDS Church’s commitment in protecting its interests and keeping the area in order. "That is known and understood by businesses across the country," Johnson said. "They know that Salt Lake City will always be vibrant so they have a lot of faith and confidence in driving their business to a city such as Salt Lake." Johnson also attributes Salt Lake’s strong commercial growth to Gov. Jon Huntsman Jr., who has set economic growth at the top of his agenda." Huntsman has been so successful with bringing people and organizations together. That’s one of the major reasons that I see that is driving business," she said. "We’ve got an active government that is pro-business and will do everything they can do to get business to Utah. That is very helpful for the commercial market." Indeed, Utah consistently ranks at the top when it comes to business rankings. In July, Forbes magazine placed Utah at the No. 2 spot for "The Best States For Business." In a separate report in July, CNBC ranked Utah the No. 3 Top State for Business. Utah received high marks in the cost of doing business, its workforce, the economy, quality of life, and business friendliness. Last year the Boston-based Beacon Hill Institute ranked Utah the most economic competitive state in the nation. Those favorable business conditions are driving new job growth in Utah’s professional and business sector, which in June saw a 2.1 percent increase (more than 3,300 new jobs created) compared to last year, according to the Utah Department of Workforce Services. That is good news to commercial brokerage firms like CB Richard Ellis, the listing agent for 222 South Main, which has already signed three lease agreements in 222 South Main that secure more than 20 percent of the tower’s 425,000 square feet of office space. The building is expected to be completed in late 2009. "One of the things about this building that is so important is that it is designed by the world-renowned and internationally awarded architectural firm of Skidmore, Owings and Merrill," Bingham said. "On I-15 at night you see an orange triangle from the pyramid on top of the One Utah Center and you see some blue lines from the Wells Fargo Center. In between that there is going to be a white rectangle with a three-story glass veil at the top that is going to glow like a lantern at night. The architects who did this have designed a building that is going to be an icon and a real addition to the skyline."

Dave Anderton is the public relations director for the Salt Lake Board of Realtors