BY TOM BUSSELBERG

Clipper News Editor

DAVIS COUNTY — Some businesses are shutting their doors. Others are making a decision to stay put until the cash register jingles a bit more.

All of this is translating into more “For Rent” or “Vacancy” signs in commercial and industrial buildings across Davis County.

That’s according to a report released early this week by Commerce CRG, providing year-end data for Davis County and other big Wasatch Front counties.

In office complexes, the vacancy rate has risen from 10.8 percent to 12.36 percent, with the highest impact being felt in “Class B” or second tier projects. That’s because tenants from those type of facilities have moved to “Class A,” or top of the tier projects.

The industrial sector has seen only a slight increase in vacancies, up from 9.42 percent to 10.14 percent.

And in the retail sector, strip centers without major anchors have seen vacancy rates jump from just under 8 percent to 10.32 percent.

Multi-family units, or apartments, continue to experience a high rate of occupancy. That’s partially due to a decrease in home loans keeping rents at record high levels.

“Although there has been a noticeable down tick in the market, the impact has not been fully realized to this point,” the report continues.

Large mixed-use and other construction projects are moving forward, especially in North Davis. Much of that is fueled by Hill Air Force Base, which is seeing new construction in support services categories.

In the office sector, “very little new construction activity” is taking place. However, the report predicts “Utah office market will continue to outperform the nation and remain in a relatively good position.”

A driver for that is that Utah’s, and Davis County’s, unemployment rates are half or less those of the nation.

“Expect continued interest from national companies for possible expansions in Utah,” the report continues.

“Healthy manufacturing and distribution industries are keeping the industrial sector healthy,” it says, with lease rates rising. Sale prices reaching a record $97.17 per square foot.

“A surge of new construction is expected, including several near HAFB,” including the East Gate area of Layton. That area will target manufacturing companies serving the base, while Falcon Hill will feature mixed use office and research, retail and light manufacturing.

“A downturn in the retail market allows healthier businesses to upgrade or move to better locations,” the report says.

Discount, dollar and consignment shops have proven to be the “best performers” in 2008, while fast food and mid-price restaurants are also doing well.

Big stores include Lowe’s, Wal-Mart and Kohl’s have helped spur retail activity in the county, as smaller retailers follow big boxes to regional malls and regional centers, lowering vacancies in those types of developments.

That has meant an upward movement in most lease rates, spurred by construction costs. Lease rates have fallen only in anchorless strip centers.

“Mixed use projects like Falcon Hill and Station Park will keep retail construction moving forward,” the report says.

tbusselberg@davisclipper.com