While vacancy rates had been hovering around 5% the past few years, according to the survey they have recently tightened up to 3.25% in class A buildings in the Downtown core. Tomlinson & Black president Mark Pinch tells GlobeSt.com that owners representing about 930,000 sf in the central business district were surveyed.
It's the CBD's class A space, which are averaging $18.50 per sf, that are so highly in demand, according to the report. When class A, B and C spaces are combined, the vacancy rate jumps to 9.7%. In contrast to class A numbers, Pinch says a survey of 31 class B buildings posted very different results--13.25% vacancy and average rents of only $11.63 per sf.
Demand for prime Downtown space is strong here where most office buildings are more than two decades old. Some newer class A buildings have broken the $20 per sf mark, including local developer Dick Vandevert's Northpoint Office Building. Just completed last year, the property is fetching $22 for some spaces with high-end buildouts, says Pinch. Market observers believe CBD rents could jump another 5%, or about $1 per sf, in 2000.
For the most part, Pinch describes new office projects planned for the CBD as "nothing of any real size," adding, "There are a few small projects in the 10,000-sf to 20,000-sf range, but they're not going to make any difference."
The only major development in the works is a $50-million office project proposed by Jerry Hagood, co-founder of Kiemle & Hagood, and owner of the site, K. Wendell Reugh. Pinch says while the developers have made no formal announcements on the design, he believes the plan calls for approximately 200,000 sf of offices over 10,000 sf of retail. None of the principals in the project's development team were immediately available to discuss details.
Pinch concurs with other local experts that have estimated the project at Howard Street and Riverside Avenue would need to reap rents of $30 per sf to be financially feasible. Does Pinch believe Spokane is ready to support that rate? "Nope." While completion of the project is not anticipated until 2004, Pinch says, "$30 per sf is a big number for Spokane."
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