County office market takes a hit

May office report confirms that this remains a tenants’ market

BY MEGAN PATRICK-VAUGHN of the VBJ

May certainly brought sunshine to Southwest Washington, but it also brought the lowest total number of consummated transactions for Clark County office properties in 2009.

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Vacancy rates increased while average lease rates decreased, according to Adam Roselli, broker at Vancouver-based Eric Fuller and Assoc.

Due to the economic climate, more tenants than ever are attempting to renegotiate their leases.

Most deals for Class A space are being done for about $20 per square foot annually - the lowest rate in a year - and landlords are no longer scoffing at more extensive space upgrades on three-year leases, Roselli said.

In May, there were 1.19 million square feet of available Class A and B office space in Clark County, creating a vacancy rate of 20.19 percent. Month-over-month net absorption was -1,014 square feet, while year-over-year net absorption was -9,365, according to Roselli.  

Vacancy rose slightly from March and April, but was down from the year-to-date high of 20.39 percent in February.

The submarket with the least amount of vacancy is Camas/Washougal, with 6.8 percent office vacancy and an average weighted lease rate of $17.50. The submarket with the greatest vacancy is Orchards/Battle Ground with 26.7 percent vacancy and an average rate of $18.17.

While there have been signs of an upswing in the housing market, Roselli expects recovery in the commercial real estate market to be months away still.

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