Office vacancy rates continued at 15% or higher with construction activity remaining stagnant at the end of the second quarter, according to market reports for the second quarter.

The Business Record received second-quarter market reports on the office sector from Cushman & Wakefield, JLL, CBRE and Colliers, with each highlighting optimistic leasing activity, big deals in the waiting and those that have already closed.

Analysts with Cushman & Wakefield said new leasing activity is rivaling pre-pandemic levels, but is creating new vacancy in the Central Business District.

JLL’s report indicated that available Class A space is decreasing as employers favor those premium spaces, creating the opportunity for Class A development in suburban locations.

CBRE analysts said that office construction in the metro remained at historical lows at the end of the second quarter, with Community State Bank’s new headquarters in Ankeny being the only new construction project underway.

Colliers reported that vacant office space increased from the first quarter to the second quarter, representing 4.53 million square feet that was available at the end Q2. While that represents a decrease from peak vacancy of more than 4.78 million square feet in the first quarter of 2021, it remains above pre-2020 levels.

Here are key takeaways from each report:

Cushman & Wakefield

• Total vacancy rate at the end of the second quarter was 15.9%.
• Year-to-date net absorption was 87,000 square feet.
• Asking rent was $20.85 per square foot.
• Key leases were RSM signing a lease for space in the former federal courthouse annex, and Cologix signing a lease at 606 Walnut St.
• Key sales transactions included Westown Equity LLC’s sale of 6000 Westown Parkway to HV Real Estate for $16.65 million; Iowa Great Lakes Property LLC’s sale of 2480 Berkshire Parkway to 2480 Berkshire LLC for $11.75 million; and Dabrama LLC’s sale of 2501 Westown Parkway to 2501 Holdings LLC for $2.3 million.

JLL

• Total vacancy was 16.2%.
• Year-to-date net absorption was 93,742 square feet.
• Overall rent was $22.58 per square foot.
• 91,230 square feet was under construction.
• The anticipated sale of the downtown Wells Fargo buildings will introduce new leasable space and redevelopment opportunities.
• New mixed-use development by DRA Properties is underway in Ankeny’s Prairie Trail that will include 8,200 square feet of office space.

CBRE

• Total vacancy rate at the end of the second quarter was 17.2%. The vacancy rate in the Central Business District was 26.9%.
• Net absorption year-to-date was 43,889 square feet.
• No new construction was delivered with 71,000-square-feet under construction.
• Lease rate for Q2 was $14.36 per square foot.
• Most notable leasing activity in the Central Business District was at the Riverview Building, 110 E. Court Ave., where two leases have been signed.

Colliers

• Total vacancy in the second quarter was 17.9%.
• Net absorption was negative 170,700 square feet.
• No square feet of new construction was underway.
• Overall lease rates were $22 per square foot.
• Tenants in the market are a mix of new-to-market and those moving locally seeking higher quality space and better lease terms. Most of the market demand is in the 8,000-square-feet to 12,000-square-feet range, although some larger tenants of 30,000-square-feet or more are in the market, suggesting positive absorption is likely in the next 12 months.

Watch for second-quarter industrial market reports in next week’s Commercial Real Estate newsletter. Signup for the newsletter here.

This version corrects the sale price of 2501 Westown Parkway to $2.3 million. The price was incorrectly reported in an earlier version that was published in the Aug. 6 Commercial Real Estate Newsletter.