Salt Lake City Office Buildings Drop From $350 to $100 Per Square Foot as Class A Space Grows Scarce

Written by:

Rudi Davis

Date:

24 Mar 2026

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Office buildings in Salt Lake City that once sold for $350 per square foot are now trading for as little as $100 per square foot, according to Kip Paul, Vice Chairman of Investment Sales at Cushman & Wakefield. This steep decline reflects a major reset in how investors evaluate office properties, with Class B and C buildings losing value rapidly. At the same time, a small group of top-tier Class A assets now face genuine scarcity and attract strong leasing demand.

“Buildings we used to sell for $350 a square foot, we now sell for as low as $100 a square foot,” Paul says. “There are still challenges.”

The 70% drop in per-square-foot pricing for lower-quality office buildings marks one of the sharpest corrections in commercial real estate. For owners of Class B and C properties, the collapse in values has wiped out equity and forced difficult decisions: hold and hope for recovery, invest in costly upgrades, convert to another use, or demolish and redevelop. The result is a sharply divided market, with trophy assets and all other properties now operating under entirely different economic realities.

Class A Office Faces Scarcity

While most of the office sector struggles, Paul reports that the highest-quality Class A buildings are experiencing strong demand and limited competition. “Office has bottomed out and is seeing some improvement, particularly in the top five or ten percent of buildings,” he says. “There’s a scarcity of true Class A, best-of-the-best space.”

This scarcity is driven by a flight to quality among tenants, who are consolidating into fewer, higher-quality locations rather than spreading across mediocre buildings. The trend accelerated during the pandemic as companies adopted hybrid work policies and sought premium space to encourage employees to return to the office.

For landlords of Class A buildings, these conditions support premium rents and high occupancy. Tenants prioritize amenities, location, and building quality, treating these features as essential rather than optional. Institutional investors are also concentrating capital in the best buildings, further supporting values at the top end of the market. Strong capital for top-tier product remains available, even as financing for lower-quality office is limited.

Class B and C Buildings Face Demolition

For office buildings outside the top tier, options are narrowing. Paul says, “A number of those are getting demolished to make way for multifamily or industrial projects.” In many cases, the land beneath a Class B or C office building is now worth more than the structure itself, especially in areas zoned for higher-density residential or industrial use.

Some owners are attempting office-to-residential conversions. Paul estimates that four or five such projects have moved forward in Salt Lake City. The financial outcome, however, is far from certain. “Whether or not they’re profitable remains to be seen,” he says, citing the many unknowns involved.

Office-to-residential conversions face significant technical and economic hurdles. Many office buildings have floor plates too deep for apartments to get adequate natural light, and retrofitting plumbing and HVAC systems for residential use can be prohibitively expensive. Zoning and permitting add further complexity, making each project a case-by-case challenge.

Despite these obstacles, the reduction in office inventory through conversion and demolition is gradually tightening supply. Paul argues this will help stabilize occupancy rates for remaining office buildings over time. How quickly the market balances depends on both the pace of conversions and the recovery of tenant demand.

Mid-Tier Office Competition Intensifies

Class B and C office buildings that remain in operation face intense competition for tenants. Paul describes the situation as “tough competition,” with landlords forced to offer large concessions and tenant improvement packages to attract or retain occupants.

The pressure is magnified by the availability of Class A space at rental rates that, while higher, offer much greater value in terms of quality and amenities. Tenants comparing a renovated Class B building to a true Class A property increasingly choose the latter, even at a premium, because the difference in employee experience and retention justifies the extra cost.

This creates a downward spiral for mid-tier office assets. Declining occupancy reduces cash flow, making it harder for owners to invest in upgrades that might attract tenants. As a result, many owners face a choice between investing heavily to reposition their buildings or accepting ongoing declines in occupancy and value.

Salt Lake City Office Market Outlook

Paul sees the current environment as a long-term structural change rather than a temporary downturn. The demolition and conversion of lower-quality buildings are reducing overall office supply and raising the average quality of what remains.

For investors, future office exposure should focus on the best assets in the strongest locations. Value-add strategies in mid-tier buildings are increasingly risky, with little evidence of a near-term rebound. The division between high-performing Class A properties and struggling Class B and C buildings is likely to persist for years.

This shift also affects the shape and function of downtown Salt Lake City. As older office buildings are demolished or converted, the city’s land use and urban character will change. Cities that facilitate conversions through flexible zoning and streamlined permitting may see faster progress, while those with stricter rules could face longer periods of vacancy and blight.

Cushman & Wakefield’s team continues to advise clients that successful office investment now depends on acquiring and holding properties with irreplaceable location, top-tier quality, and strong amenities. In today’s market, the bottom 90% of office buildings face structural headwinds, while only the top 10% show clear long-term stability and value.

The Salt Lake City office market will likely remain bifurcated. As conversions and demolitions slowly reduce inventory, Class A assets are expected to retain pricing power and stable occupancy. Most other buildings, meanwhile, will continue to face ongoing challenges or exit the office market altogether.