Clark County office vacancies decrease
Market shows signs of improvement in January
After a year of high vacancy rates, the Clark County office market is starting to show signs of improvement, particularly in east Vancouver, the site of this building in the Columbia Tech Center mixed-use development.
Wednesday, February 17, 2010
Update
• Previously: The stubborn recession and layoffs battered Clark County’s office market with high vacancies and declining rent rates through 2009.
• What’s new: Office vacancy rates declined in January, a sign that companies have begun to relocate and spread out into larger office spaces.
• What’s next: Newly adopted Oregon business tax measures are expected to prompt some Oregon companies to move across the Columbia River to Clark County.
Businesses moved, spread out and took advantage of lower rents in Clark County’s office market in January.
The month ended with fewer office vacancies and more companies in a position to grow as the economy recovers, said Adam Roselli, an associate broker who specializes in the office market for Eric Fuller & Associates Inc. commercial real estate firm in Vancouver.
Roselli credited most of the movement to the stubborn recession, which is still causing landlords to slash rent rates on half-empty buildings.
“Price is the biggest factor behind most of the moves,” Roselli said.
However, he said some companies have relocated for image or to gain space for expansion.
Clark County’s overall office vacancy rate was 18.65 percent in January, down from 20.24 percent the same month last year. The new figures mean that more than 110,000 square feet of empty office space was absorbed in the 12 months through January, Roselli said.
He called it an encouraging sign, even though the movement does not signal huge growth, in terms of jobs.
“Some companies say it’s worth it to get the extra square footage now,” while landlords are still willing to negotiate on rent, Roselli said.
Oregon calling
He is also expecting a stream of Oregon companies to relocate to Washington, in response to the Oregon business and income tax measures recently approved by voters. The measures, which levy new taxes on Oregon’s wealthy individuals and on businesses, are definitely generating more calls from Portland-based companies and their real estate brokers.
“It’s definitely getting people talking and asking questions. We’ve heard from a lot of brokers who work with Portland clients,” Roselli said.
However, it could be two or three months before any disgruntled Oregon businesses actually move, Roselli said.
“Anybody who is going to move probably won’t be doing it for another 60 days because their lease may not be expired, not to mention the process of finding a location,” he said.
In the meantime, office buildings in east Vancouver continue to draw the most interest from potential tenants, Roselli said. The area’s vacancy rate dropped to 18.5 percent in January, down from 21.3 percent in January 2009.
East Vancouver appears to have the most promise as the economy improves, said Byron Vankley, president and chief executive officer of Adair Homes Inc, which recently leased 6,000 square feet of office space in the area’s mixed-use Columbia Tech Center.
Adair Homes expects to move out of its smaller office near Westfield Vancouver mall about six months from now.
“We’re moving because someday, that’s where we intend to build our permanent campus, near the 192nd Avenue corridor,” said Vankley, whose company builds pre-designed homes on lots owned by its customers.
“We view the move as an upgrade,” he said. “It’s a little nicer space, a better location and the lease rates are attractive right now. It was a favorable time to move.”
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