Commercial Real Estate News / Investing / Utah's Booming Economy Welcomes Land Investors (Updated for 2023)

Utah's Booming Economy Welcomes Land Investors (Updated for 2023)

Published: 09-25-21 Category: Investing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

This article was updated on 8/29/2023.

There are approximately 52.9 million acres of land in Utah, with several million of those acres covered by thousands of farms. The diverse agricultural sector in The Beehive State combined with its booming rebound economy provides a great opportunity for investors looking to snag land for sale in Utah.

In 2021, the agriculture sector in Utah produced about $2.0 billion in cash receipts, a significant rise over its 2019 production of $1.7 billion; its most profitable ag exports were cattle, dairy products, and hay and haylage. In 2021, the state had generated about $440 million worth of hay and haylage, $30 million worth of wheat, $23 million worth of corn, and over $405 million worth of milk.

The economy of Utah was one of the fastest to rebound from the Coronavirus Pandemic. In August 2021, Forbes ranked Utah at the No. 1 spot on its list of states with the biggest GDP growth. In Q1 2021, despite the pandemic, the GDP of Utah surged $178.2 billion, its highest quarterly GDP to date.

How Much Does an Acre of Land for Sale in Utah Cost?

In 2020, the average cost per ace of commercial land for sale in Utah was about $2,450 per acre, a 1.2% increase from 2019, though prices per acre in Utah can vary widely by county. Average cash rent for irrigated cropland in Utah dropped in 2020 by $7.00 to $101.00 per acre.

The average value of cropland in Utah, however, increased from 2019 to 2020 by about 1.8% up to $4,040 per acre. Among the types of cash rents to increase in 2021 were:

Average cash rent for non-irrigated cropland: $28.00 per acre;
Average cash rent for pasture: $4.90 per acre.

In 2021, the average cash rent for irrigated cropland in Utah had increased by $6 up to $107.00 per acre; the average cash rent for pasture has decreased down to $4.50 per acre.

Is Buying Commercial Real Estate in Utah a Good Investment?

The currently booming, post-COVID economy in Utah is welcoming CRE investors nicely: In March of 2021, the National Association of Realtors (NAR) ranked Salt Lake City in their top 10 list of best commercial real estate markets for its low decline in nonfarm employment, which only dropped half a percentage point.

In 2023, Utah's economy grew significantly, with nonfarm payroll employment rising by 3.0% as of July and adding nearly 50,000 new jobs year-over-year.

The best commercial real estate property types to purchase in Utah in 2021, according to a NAR report, are:

Multifamily: With a vacancy rate that is a full percentage point below the national average (5.5% compared to the national 6.5%), the multifamily housing market in Salt Lake City is experiencing fast rent growth and is still relatively affordable at an average monthly rent of $1,257.
Industrial: Occupanices in the industrial sector of Salt Lake City have increased throughout 2021, and the city had the fourth-lowest industrial vacancy rate on the NAR list: 4.8%.
Retail: While most of the nation saw its storefronts close down and retail employees lose their jobs, Salt Lake City actually saw an 8.6% increase in retail trade employment. According to a NAR report, consumer spending in Salt Lake City is stronger than that of the country as a whole.

2023's changing economic environment has somewhat complicated NAR's investment outlook; however, industrial and self-storage properties continue to be intelligent investments for those looking to hedge their portfolios against inflation. Multifamily properties continue to be the dominant choice of those looking for new housing as rising interest rates continue to squeeze prospective homeowners out of the market.

If the idea of leasing your land to farmers or finding other ways to profit from farmland does not excite you, the affordable rents of Salt Lake City and lower costs per acre of land for sale in Utah provide profitable opportunities for multifamily real estate development on new land.

According to Lawrence Yun, chief economist of NAR, "the top commercial real estate markets that are expected to outperform the rest of the nation are generally affordable and able to draw new residents with greater flexibility to work from home. These growing markets also offer much lower office and retail rents and are, therefore, able to attract new and expanding businesses."

The 5 Best Counties to Buy Land for Sale in Utah

According to the 2017 Census of Agriculture report, the top 10 counties for agricultural production in Utah produced over $1.43 billion in ag revenue in 2017. Among those top 10, the 5 best counties to buy land for sale in Utah for agricultural profits are:

Beaver County: $258 million in annual ag revenue;
Utah County: $202 million in annual ag revenue;
Millard County: $179 million in annual ag revenue;
Sanpete County: $171 million in annual ag revenue;
Cache County: $162 million in annual ag revenue.

As always, do your research before signing on any dotted line. We also recommend working with a vetted commercial real estate agent or broker who can guide your search.

Why Buy Land for Sale in Utah?

Reasons for purchasing land for sale in Utah will vary from investor to investor, but as the Midwestern agriculture sector continues to ride its August 2020 market turnaround, land is becoming a more attractive long-term investment for those looking to get in on increasing ag profits and hedge against inflation.

Vacant land in Utah in 2021 was not a competitive market. With the cost per acre of land in Utah already low compared to the rest of the nation, there is a window of economic opportunity in Utah for investors looking to buy land and lease to farmers or develop.

As the commercial real estate market in Utah continues to flourish, so will landowners. Rent growth will raise cap rates and inspire new multifamily housing development that will require new land, assisting the already rapid economic growth in Utah and drawing more to its population.