Flex Space Feasibility Study in Utah

Cancellation is low, and the market is closing

Utah flex space tells two stories. The first is that few approvals fall through: at least 2.9% were cancelled for FY2017 to FY2024, and 5.9% at the ceiling if loans still awaiting disbursement are counted. That is low, and it separates the cell from most lessor classes. The second is the calendar. The FY2024 lessor note applies, since loans to nonresidential lessors almost end from FY2024, and the file shows 2 loans in FY2024, none in FY2025 and a single $125,000 loan in FY2026. Recent quiet is a policy change more than a verdict on Utah demand.

Size, programs and lenders

Over FY2017 to FY2026 the file holds 35 approvals totaling $29.1 million. The median loan of $636,000 is 1.06x the national median, half of the loans run from $230,750 to $940,600, and the 1.17x location quotient shows the class slightly above its national weight. Utah ranks 17 of 51 on volume, and the class is 19 of 39 among Utah asset types. The Utah split is 31 loans through 7(a) and a handful of 504 deals, 4 in all, with no franchising. Mountain America FCU is the single named lender, holding 5 loans and $2.1 million. Salt Lake County holds 16 loans, Utah County 6, Weber County 4 and Summit County 3. Annual counts reached 6 in FY2017, FY2020 and FY2021.

Office and retail lessors share the flex code, so a light industrial building and a suburban retail strip look alike. Utah's charge-off rate is not printed, with under 30 early loans funded, and readers should treat the blank as unknown, not as a clean record.

What a Utah flex study should test

The study should name the tenants. Flex buildings serve small trades, light assembly and service businesses, and the evidence is lease rates per square foot, vacancy in the Wasatch Front submarket and the length of leases. Land and construction cost, set against a loan near $636,000, should be separated from tenant improvements. Passive lessors have mostly lost access, so the study should say whether the owner occupies part of the building. It should also test the payment against vacancy and tenant turnover, and an appraiser will value the building on contracted rents, so signed leases are the key evidence. A low cancellation floor suggests that projects that reach the lender usually close.