"A property like this hits on so many different cylinders, we're anticipating it will set a new record," said Michael Jeppesen, an agent with Salt Lake City-based IPG Commercial Real Estate, which is marketing the site in partnership with Cushman & Wakefield | Commerce.
The T-shaped footprint of the eight adjoining parcels offers frontage access to the busy arteries of 700 East, 500 South and 400 South, which is also a corridor for the University of Utah extension of the TRAX red line. The lots, a block northeast of Trolley Square mall, are zoned under city code for special transit-related and transitional uses, allowing both high-density multifamily residential and commercial development.
The locale is just north of Trolley Corners and adjacent to several popular restaurants, including Ruby River Steakhouse, Hires Big H, Chuck-A-Rama and Litzas Pizza. It also adjoins the historic and quirky Gilgal Sculpture Gardens, at 749 E. 500 South.
The parcels have a combined assessed value of $1.63 million, according to Salt Lake County property records. But with a location at one of the busiest commercial intersections in Utah's capital city, market value is likely to be higher.
In its first few hours on sale, the property drew heavy interest from prospective buyers, Jeppesen said, particularly as a potential site for a downtown apartment complex of as many as 300 units. Lots on 700 South are also being pitched for possible sale separately for a future fast food restaurant or other retail operations, he said.
"In 20 years in this business," said Jeppesen, "I've never seen a response like this."
Portland, Ore.-based U.S. Bakery purchased the plant, parts of which were built in 1930, and several other baking and distribution facilities across five Western states in a $31 million deal stemming from the 2013 bankruptcy of Hostess Brands Company, producer of the iconic Twinkie cream-filled snack cake.
U.S. Bakery has since shut down another former Hostess facility on North Temple, but the family-owned company still has locations in Logan, Layton, Midvale and Provo.
Inquiries to Franz Bakery, credited by some historians as the inventor of the 5-inch hamburger bun a century ago, were referred to Nampa, Id.-based General Sales Manager Rob Robinson, who did not immediately return calls seeking information.
Sale of the downtown Salt Lake land and buildings spanning as much as 90,500 square feet comes amid an infusion in recent years of capital from out-of-state investors buying local commercial real estate, including higher-density residential deals.
The offering also hits the market during an uptick in demand for urban multifamily dwellings across the Wasatch Front, including apartments, condominiums and town homes. That trend is thought to be fueled by buyers seeking alternatives to rising prices for single-family homes across Salt Lake County as supplies of affordable foreclosed properties and short sales fall.
Vacancy rates reached a multiyear low of 5.1 percent at the close of 2013, according to Equimark, a research firm that tracks Utah's multifamily residential markets.
In-migration to Utah, its improved jobs outlook and rising numbers of so-called lifestyle renters who choose to rent instead of own homes, also are said to be driving a growing market appeal for rental properties.
Nearly 3,300 multifamily units were under construction in the Salt Lake Valley at the end of last year, with another 4,900 proposed to be built this year, Equimark has estimated.
Seven65 Lofts, a 128-apartment complex at 765 East 400 South directly north of the U.S. Bakery locale, opened under new management just more than a year ago, one of five Salt Lake locations now run by Denver-based Mission Rock Residential. The 16-building complex on 400 South currently has a 4 percent vacancy rate, a property manager said Thursday.