In Pierce County, direct vacancies were measured at more than 2.4 million sf, or 8.25% of the total. Nearly one-half million sf were up for sublease. Numbers aggregated, the county finished the fourth quarter with a total vacancy of 9.97%.
Here, the report says construction has "come to a grinding halt" with very little in terms of new spacing having come on line. Absorption is off dramatically, with the fourth quarter posting a paltry net of 114,560 sf.
In the Kent Valley, 2001 left a dubious legacy. Total vacancy hit 9.58%, with direct vacancies tallying 7.64% and sublease space peaking at 2.34 million sf. It is the first time in a decade vacancies here have approached the 10% mark. Colliers says "tenants have exited [Kent Valley] space in record numbers." Fourth quarter absorption ran a negative 951,603 sf. The number for the year was more than three million sf.
Colliers echoes the sentiments of experts predicting the worst has yet to come—the slowdown being exacerbated by Boeing woes that are reaching into all corners of Puget Sound's economy.
Tenants, of course, are cashing in on rent rate drops and other incentives aggressive landlords are employing to fill their darkened buildings. The result is an emerging trend of longer lease periods being written into new agreements. Colliers says, however, not all spaces are lowering their rates. Some institutional owners it says have the deep pockets to ride out the lull without significant concessions.
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