The Salt Lake County office recovery has a headline number, and the headline number is misleading if you are underwriting an asset or negotiating a lease in Sandy right now. Countywide direct vacancy fell to 17.05% in Q2 2026, with sublease vacancy at 2.72%, pushing overall vacancy below 20% for the first time in more than two years, according to Colliers' Q2 2026 report. Seven consecutive quarters of positive absorption. No speculative construction underway. Read that at the county level and the story is straightforward. Read it at the submarket level and the story inverts.
The South Valley submarket that covers Sandy and Draper ran from roughly 7% availability in 2020 to about 15% by late 2025, a 109% increase. Cottonwood Heights, by comparison, moved from 8% to 11% over the same window. What that spread tells an investor is not that Sandy is weaker. It is that Sandy is where the repricing is happening, because Sandy is where the private capital is landing.
The countywide number is the wrong number
Cushman & Wakefield's Q1 2026 marketbeat shows the South East submarket, which includes Sandy, leading the county in leasing activity with roughly 201,000 square feet signed, or 28% of the quarter's total. Class A absorbed 52% of that demand. The named comps are recognizable to anyone working the submarket. Alkeme Insurance Services signed a 25,000-square-foot lease at Sandy Commerce Park at 9450–9500 South 300 West. Interactive Communications International renewed 25,000 square feet at the same park. Both transactions sit inside a submarket that a shallow read of the countywide vacancy number would flag as still soft.
The point is not that Sandy is tight. Availability at 15% is still a tenant's market by any historical measure. The point is that the tenant-favorable window and the repricing catalysts are running on the same clock, and the catalysts are visible on the ground.
What SEG is building at 10450 South State
In August 2024, Smith Entertainment Group bought the entirety of The Shops at South Town, a 111-acre site at the south end of the Cairns District. That acquisition is now the anchor of a three-building sports campus. The Utah Mammoth Ice Center opened ahead of the 2025-26 NHL season. The Utah Jazz practice facility broke ground in October 2025 with completion targeted inside two years, though SEG's own timeline acknowledged the building would not be ready for the start of the 2026-27 NBA season. Design and construction are led by Babcock Design, Okland Construction, and Ezra Lee Design + Build.
The third piece was announced in May 2026. Intermountain Health signed a partnership with SEG to build a Sports Performance Center on the same campus, opening in 2028, with Intermountain becoming the official healthcare partner for both teams as of July 1, 2026, and Select Health becoming the exclusive insurer. This is the only NBA/NHL campus in the country with two teams and a single integrated healthcare provider on one site.
For a broker, the material fact is not the campus itself. It is what a 111-acre single-owner development pipeline does to the comp set inside a 1.5-mile radius. Retail rents in adjacent pads, hotel demand, medical-adjacent leasing at nearby office parks, and multifamily land basis all move on the schedule of that pipeline, not on the schedule of a countywide absorption chart.
The Cairns is not a plan anymore, it is a comp set
Sandy's Cairns District is a 1,000-plus-acre city center bounded by 9000 South, 11400 South, Interstate 15, and the TRAX Blue Line. Twelve years into the master plan, the district has moved past renderings. Raddon Development's 350,000-square-foot Town Ridge office campus is built and leased. The East Village transit-oriented development delivered 271 residential units and 55,000 square feet of office in its first phase, with entitlements for another 954 units and 365,000 square feet of office. The Prestige mixed-use tower cluster is under phased construction. Raddon and Beecher Walker's approved 18-story mixed-use tower at 10300 South Centennial Parkway, still the tallest approved building in Utah outside downtown Salt Lake City, brings roughly 400,000 square feet of office, 225-plus hotel rooms, 50,000 square feet of restaurant and retail, and 200 apartments to the block directly north of the SEG campus.
Below is what an underwriter should have in front of them when comparing a Sandy asset to a downtown SLC or Lehi comp:
| Catalyst | Owner/Sponsor | Delivery | What it repricess |
|---|---|---|---|
| Utah Mammoth Ice Center | SEG | Open (2025) | Adjacent retail, hospitality |
| Utah Jazz Practice Facility | SEG | Est. 2027 | Class A office demand at Cairns south end |
| Intermountain Sports Performance Center | SEG / Intermountain Health | 2028 | Medical office, allied health leasing |
| Cairns 18-story tower (10300 S. Centennial Pkwy) | Raddon Development / Beecher Walker | Phased | Class A pricing ceiling |
| East Village buildout | Multiple | Phased | Land basis, TOD multifamily |
Any one of those is a story. Together they are a rebasing.
Where the friction actually shows up
The transaction-specific friction in Sandy right now is not on the demand side. It is in three places, and they are the questions a senior advisor is asked in every South Valley deal this quarter.
The first is concession structure. Landlords in the South East submarket are still writing deals with elevated TI allowances and extended free rent, consistent with Newmark's 1Q26 read that asking rents have held roughly flat while concessions have absorbed the pricing pressure. For a medical or professional tenant with a five-to-seven-year horizon, the effective rent gap between a signed 2026 deal and what the same building will quote in 2028 after the Jazz facility opens is the most consequential number in the underwriting, and it will not appear on a comp report until the leases roll.
The second is entitlement timing on adjacent parcels. Sandy's Cairns Central Business District carries a 140-foot base height limit, with the master plan allowing up to 25 stories for projects that meet its design guidelines. The Prestige's phase-one tower cleared at 153 feet through that mechanism. If you are buying a value-add asset within the Cairns overlay, the entitlement path is not a marginal detail. It is the difference between a strip-retail residual and a mid-rise redevelopment basis.
The third is the HTRZ layer. Sandy's Housing and Transit Reinvestment Zone application enables an additional 730 residential units, 178 of them income-restricted, 257,500 square feet of net-new office capacity, and roughly $268 million in additional taxable value across a 25-acre core, with HTRZ funds carrying $75.59 million of the incremental property tax over a 45-year period. Buyers looking at pads inside the HTRZ boundary are not underwriting the same product as buyers one block outside it. The public financing has effectively drawn a line that the market has not yet fully priced.
The narrowing window
Colliers' Q2 read that no speculative office construction is expected in the county over the next three to five years, combined with the SEG delivery calendar and the Cairns pipeline, sets up a specific kind of arbitrage. Class A availability in Sandy is still generous enough to give tenants real leverage, but the supply side has stopped adding and the demand catalysts are dated. That combination does not persist. A medical tenant signing today, or an owner-operator acquiring an under-managed office asset within a mile of 10450 South State Street, is transacting into a submarket the countywide report has not yet described.
FAQ
Does the SEG sports campus generate direct office demand, or is it a residential and retail story? Both, but the underappreciated piece is medical and allied-health leasing tied to the 2028 Sports Performance Center and Intermountain's expanded presence. Practices adjacent to sports medicine anchors typically absorb nearby Class B medical office within a two-mile radius over the following 24 to 36 months.
Is Sandy competing with Lehi and Silicon Slopes for office tenants? They serve different tenant profiles. Lehi's Silicon Slopes corridor sits under 7% vacancy on the tech side. Sandy's South East submarket runs higher availability but offers freeway access, a maturing amenity base at the Cairns, and pricing that has not yet reset to reflect the SEG campus. For professional services and medical tenants who value proximity to both counties, that gap is the opportunity.
When does the tenant-leverage window close? It closes in stages. Concession packages start compressing as sublease inventory continues to burn off, which Colliers documented dropping nearly 700,000 square feet year over year in Q2 2026. Asking rents move next, likely as the Jazz facility approaches completion in 2027. Full repricing follows the 2028 Intermountain opening.
If you are underwriting a Sandy office, medical, or mixed-use asset, or negotiating a lease inside the Cairns footprint, the countywide narrative is not the negotiation. Dan Rip Commercial Real Estate works these submarket mechanics deal by deal. Schedule a free consultation to walk through the specific block, the specific comp set, and the specific timing that applies to your position.
