According to a first-quarter report from Orion Partners Ltd., the Marin County market has softened but is still at the historic average vacancy rate of about 10 percent. After two years of vacancy rates below 6 percent, the rate jumped to 10.4 percent in the first quarter of 2001, up from year-end 2000 by 3 percent. The jump is due to a few dot-com busts and established companies like Fair Isaac and AutoDesk, Inc. putting space on the market.
In addition, more than 700,000 sf of new construction is set to come on the market this year and into 2002. New leases are being signed and some of the new construction is pre-leased such as the 120,000 sf leased to Greenpoint Mortgage at Wood Hollow Drive in Novato. The mortgage company will vacate 133,000 sf in Larkspur and San Rafael when the move into the new space happens.
In nearby Sonoma County the story changes slightly. Vacancy rates for office space have increased about 1.5 percent to an overall rate of 7.1 percent in the first quarter of this year, according to the report. The strong telecommunications industry is credited here for saving Sonoma County from the same market fallout as other counties experienced due to the earlier dot-com expansions.
For the second quarter of 2001, Orion's report predicts more sublease space to hit the market in Sonoma County. There is about 102,700 sf of potential space expected to come on line which will effect the vacancy rate. There is also about 500,00 sf of new construction slated to hit the market later this year and in early 2002.
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