BOUNTIFUL -- Northern Utah remains a very good area for commercial real estate investment of all kinds.

At least that's the conclusion drawn in a series of reports issued Tuesday by NAI Utah Commercial Real Estate -- the First Quarter Market Update. The information was drawn from various divisions of commercial: industrial, retail, multi-family, and investment. It was then prepared by NAI Investment Specialists. The report labeled industrial activity, through the first quarter of 2006, as being "nothing short of remarkable." It also offered some very clear, very succinct advice -- "Act fast." The vacancy rate continues to slide and currently sits at 5.95 percent, which is the lowest rate the Salt Lake area has seen in more than a decade. The vacancy rate is down 2.76 percent from this same time last year.

Lease rates have increased about $.02 per square feet (psf) each quarter over the last three quarters and are projected to continue to rise at a faster rate. Land values and construction costs are on an upward trend resulting in rising sale prices.

Actual building sales prices has risen $13 psf in the last year alone. Because of the rising expenses, tenants and developers are wise to act now.

"The bottom line is that commercial real estate in the Salt Lake area is hot right now," said Jeff Heaton, industrial real estate specialist. "Industrial activity, as always, is expected to rise as temperatures begin to increase with the onset of summer. Look for 2006 to be a banner year in terms of overall market activity."

The area also has the right recipe for continue healthy retail market growth.

According to a recent Associated Press report, Utah continues to be one of the five fastest growing states over the next three decades, most of that growth coming internally. Utah ranks 11th in the nation for highest median household income at $50,614, according to the U.S. Census Bureau for a three year average (2002-2004).

All sectors of Utah's economy performed strongly in 2005 and bode well for 2006. As the economy goes, so goes commercial real estate. Both continue strong and sustainable growth.

Retail lease rates continue to notch up ranging from $12 to $35 per square foot per year with most of the new shop space in good centers ranging from $19 to $28.

Existing mid-box and big-box retailers in the market place continue to expand. Some of the notables are Costco, WalMart, Michael's Craft, Robert's Crafts, Home Depot, Lowes, Walgreen's, Big 5 Sporting Goods and the popular dollar stores. There are also a number of new faces entering the local market.

"Expect to see strong sustainable growth in the economy and retail real estate," said retail investment property specialist Brett Palmer. "Expect increasingly calculated decisions by developers and retailers; closings and casualties among the retailers, but expect more opening and successes. Finally, expect nearly all aspects of the retail sector in the Salt Lake market to be very warm, but not necessarily burning hot."

Housing and job growth in Salt Lake City is stimulating the multifamily industry. Both present and near future outlooks are promising in the greater Salt Lake area for apartment owners and investors alike.

According to Bankrate.com, "nothing drives housing like a stable economy and job growth. The Salt Lake area has both."

As home appreciation soars along the Wasatch Front, and as interest rates continue to rise, many apartment dwellers will be forced to stay where they are. Coupled with the fifth fastest population in the nation as well as a healthy blend of low, moderate and high paying job growth, the area is experiencing the strongest apartment market in more than four years.

"In summary," said Greg Ratliff, a senior associate/multifamily investor specialist, "all factors point to the Salt Lake area as opportunity for both sellers and investors alike and should remain so in the near future."

Through 2005 and into 2006, Utah had become an increasingly popular place for commercial real estate investment. Interest rates have had little effect on the state's investment market through the first quarter of 2006. Even with this increased cost of funds, investors are still seeing historically low cap rates in all sectors of the market.

Utah's population grew by 3.2 percent, three times the national rate, in 2005. Population increases generally fuel employment and there was no exception in 2005. Utah added 43,900 jobs in the year end Feb. 28 which equated to a 4.4 percent job growth.

In addition, Utah does not experience the major high and lows market swings making the real estate market steady and reliable. All of these factors provide the real estate investor a solid and secure investment.

"Utah is no exception to the national investment trends in that cap rates are down and supply of good product is scare," said Tucker White, MBA and investment specialist. "The drivers for this environment are an abundant supply of capital, historically low interest rates and a strong local economy. This combination has investors bullish on the Utah market and looking hard to find product."