Clark County’s office vacancy rate jumped to 20 percent of the market in November, the first period this year in which businesses leased less space than they vacated, according to a report issued this week by Adam Roselli, a commercial real estate specialist for Eric Fuller & Associates Inc.
Office users vacated more than 54,000 square feet of office space, equivalent in size to about three dozen Starbucks coffee shops.
Up from 18.3 percent of office space in March, November’s vacancy increase likely was due to expired five-year lease contracts that allowed many companies to downsize. High office vacancies also mirror Clark County’s persistently high unemployment rate, the worst in the state at 13.1 percent in November.
“Until now, we haven’t felt it in the office market, but now that the leases are coming due, they (companies) are saying we don’t need the space,” Roselli said.
He attributed the county’s slumping residential market to job cuts made at title insurance firms and real estate brokerages, among other office users that contributed to large vacancies.
“All of those companies that were booming in 2005 are now able to downsize and they are doing so,” Roselli said.
For example, a 25 percent vacancy rate now plagues one of Vancouver’s largest upscale office complexes, the six-building, 350,000-square-foot Park Tower Business Park off Mill Plain Boulevard near Interstate 205.
The center’s leasing agent, Tom Shimota, agreed with Roselli that high vacancies were caused by the housing market’s decline.
“What you’re seeing is a lag effect. We’ve seen a half-dozen mortgage companies in the Park Tower and around it that are basically half-sizing or closing their doors altogether,” said Shimota, an office broker with Pacific Real Estate Partners, in charge of Park Tower Business Park’s leasing.
Local companies that reduced space include Windermere Real Estate, which downsized from about 13,000 square feet of offices to roughly 7,000 square feet, Shimota said.
Roselli also pointed to the growth of telecommuting, which saves on the cost of office space. He said it has become especially popular among residential real estate agents, because lower home sales have forced them to look for ways to cut costs.
“They’re working from their car or from home, versus sitting in an office,” Roselli said. “Some of this reflects a change in the way business is conducted.”
