Survey: 14.7% of competitive office space is vacant in Des Moines area
BPC Staff Jan 27, 2021 | 12:02 am
2 min read time367 wordsAll Latest News, Real Estate & Development
At the close of 2020’s fourth quarter, 14.7% of competitive office space in the Greater Des Moines area was vacant, according to CBRE|Hubbell’s quarterly survey.
That’s up more than 2 percentage points from a year ago when the vacancy rate was 12.4%.
The survey showed that more than 1.3 million square feet of vacant office space was located in the western suburbs and that there was more than 1 million square feet of vacant office space in Des Moines’ central business district.
In addition, the competitive office market experienced 400,389 square feet of negative net absorption in 2020, according to the survey.
“The deterioration of fundamentals through 2020 was largely underpinned by surges in new supply from user-driven reductions of existing office occupancy just prior to the pandemic,” the survey said. “These high levels of new supply were met with historically low demand in 2020 as new leasing activity fell approximately 38% year-over-year.”
The survey predicted that office vacancies will remain “stubbornly high” at least during the first half of 2021 with higher lease rates difficult to achieve.
However, as vaccines for COVID become more readily available in the second half of 2021, “we are optimistic office fundamentals will begin to stabilize in the second half” the year, the survey said.
Office projects currently underway in the metro area include:
• The renovation of 611 Fifth Ave. in Des Moines. Construction is expected to be completed in July. The Weitz Co., an architectural, engineering and construction firm, is relocating its corporate headquarters and other company divisions to the building.
• Gray’s Landing office building at 220 S.W. Ninth St. in Des Moines. Construction is expected to be completed in February on the three-story, 72,852-square-foot-office building.
• The two-story, 60,000-square-foot new office building for the Iowa Bankers Association and its affiliate Iowa Bankers Insurance and Services Inc. at 8901 Northpark Drive in Urbandale. Construction is expected to be completed by midsummer.
• The Encompass Building at 2565 S.E. Encompass Drive in Waukee. VizyPay, a credit card processing company currently located in West Des Moines, will move its headquarters into the building when construction is completed later this year.
To read the entire survey, click here.