CLEARFIELD -- As property prices continue to escalate, including for commercial buildings, many investors are looking at Davis County and Utah for a place to plop their funds. In addition, where the plan might be to build a new structure, higher building material costs are leading to more use of existing facilities, says Joe Florence. He is the manager of Commerce CRG, here, which deals with commercial transactions across the county. "Construction costs have increased so rapidly that owners/users can buy used properties much cheaper than they can build new ones," Florence said. "This is creating a high demand for smaller type properties, non-investment properties," such as for offices and industrial warehouses, he said.

Such spaces are typically below 20,000 square feet for industrial/manufacturing space and often in the 5,000- square-foot and lower for office properties.

"There is not sufficient space, isn't a lot of inventory to tap" in the county to meet the demand, Florence continued.

"Davis County is very popular. We just wish there was more product for us to be involved in," he said.

As far as investor interest, he said Davis County follows a trend in Salt Lake County where the area, as a secondary market, is being more heavily considered.

"This area could well offer some of the best returns in the West, when compared with California, Denver or Phoenix," he said.

"Rents in the Salt Lake (area) market are a bargain when compared with others in the West," Florence added.

With area real estate prices still relatively low compared to other markets, he noted that sellers have "slightly lowered" asking prices due to higher interest rates.

Overall, investments slowed a bit from a record-breaking $1.5 billion in 2006, but available inventory dwindled with no signs of changing in the foreseeable future.

Florence called activity "blistering," projected to top at least $1 billion in the state by the end of 2006.

tbusselberg@davisclipper.com