As a result, the overall office vacancy rate rose to 16%. The asking rental rate continues to hold at an average of $18.32 per sf, according to the report, although property owners are offering incentives, including rent concessions.
The valley's industrial market also remained under par during second quarter.
The vacancy rate stood at 14% for the second straight quarter. "Although vacancy in this market has consistently hovered at or above 12% for the past four years," the report states, "the market is still regarded as a premier distribution location."
Rental rates for industrial space have remained at current levels, which average $4.25 per sf. However, pressure on leasing buildings has forced some owners to offer significant rent concessions in order to stabilize their assets.
"The downward pressure on (industrial) rental rates should be short-lived and rental rates will turn upward," says Paul Torosian, a principal covering the industrial sector at the local office of Trammell Crow.
Larry Maister, vice president, and Marie Connell, senior associate, workedwith Torosian on the second-quarter report.
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