Office Market Heading in Right Direction

SEATTLE-The year-end vacancy rate for the region wide office market was 16.3%, down slightly from the beginning of 2003, when vacancy stood at 16.8%, according to the latest report from the local office of Grubb & Ellis. Overall, the region posted 128,00-sf of positive net absorption in the fourth quarter for a year-end total of 552,000 sf.

Class A space had the strongest fourth quarter showing, posting about 275,00 sf of net absorption. For the year, class A absorption was 962,000 sf, which pushed year-end vacancy for the class down to 16.6%, which translates to just over 9 million sf of vacant space. Another 540,000 sf is under construction, according to the report. Class B space also ended the year 16.6% vacant, but had a lackluster fourth quarter, giving back 141,000 sf. Class B absorption was negative for the year as well, at -369,000 sf.