The hot, but maybe not sizzling, Greater Des Moines industrial market turned a touch tepid in the second quarter, with 237,581 square feet of space opening up as the result of several buildings experiencing move-outs or downsizings, according to a report from the Des Moines office of JLL. 

Still, vacancies were a paltry 3.2 percent, with more than 1.8 million square feet of new warehouse and distribution space under construction. Average asking rents were $7.19 per square foot at the end of the quarter.

Sales also slowed down, with six transactions at an average price of $54 per square foot and an average property age of 16. The largest sale during the quarter was a warehouse at 6046 N.E. Industry Drive for $3 million.

“The limited amount of development and continued need for industrial space will keep the industrial market vacancy low in the near term,” JLL said in the report. “Speculative projects are likely to remain in check as a limited amount of developers have gone forward with these projects in the Des Moines market. However, this could change with the continued low vacancy.”

JLL noted that developers from outside the Greater Des Moines market could be drawn to the area because of the low vacancy rate and known demand for space among industrial tenants. 

Rental rates have gradually increased and have been driven by market demand and increases in construction costs. Much of the space under construction is pre-leased or should be leased quickly in the near term.

JLL also reported that vacancies in the office market were at 14 percent at the end of the quarter, with nearly 160,000 square feet opening up. Average gross asking rents were at $18.48 per square foot.

“The office market still looks promising with multiple tenants over 10,000 [square feet] looking for office space options in the Des Moines area and landlords continuing to get rent escalations within their signed leases,” JLL said.