Office, industrial vacancies improve in 2Q

Office and industrial vacancy rates declined during the second quarter compared to the same period in 2011, but the rate stayed flat in the retail sector, according to the latest Xceligent Market Trends report.

Office vacancies dropped by nearly a point during the quarter, landing at 10.4 percent for April-June compared to 11.3 percent in the second quarter of 2011. The quarterly industrial vacancy rate was 7 percent for the second quarter, down from 7.7 percent in second-quarter 2011. Retail vacancies held steady at 5.2 percent compared to last year.

Office

One of the big contributors to the falling office rate, according to commercial real estate trackers Xceligent, was The Pursuit church’s lease of 17,200 square feet at the Sunshine Technology Center in east Springfield. Office vacancies in the first quarter were at 10.7 percent.

Total office inventory in the Springfield market, which includes Strafford, Rogersville, Ozark, Nixa and Republic, is 6.1 million square feet and available space was 738,858 square feet as of June 30. Nixa held the highest vacancy rate in the area at 29.3 percent, while Republic posted no office vacancies. In Springfield, the southeast quadrant of the city had the most available office space, with 381,077 square feet.

During the last year, the average asking rate in the office sector fell to $12.85 per square foot from $13.41.

Industrial

In the industrial sector, the Nixa market reported more than 18,000 square feet absorbed during the second quarter, helping the community’s vacancy rate drop to 7 percent from 7.8 percent in the first quarter. Total available space in the industrial sector exceeded 3.1 million square feet as of June 30. In Springfield, Packer Warehouse LLC’s purchase of the 17,216-square-foot industrial property at 1619 N. Packer Road contributed to the falling rate, according to the report.

Ozark had the highest industrial vacancy rate in the area at 14.1 percent, while Willard posted no industrial vacancies at the end of the second quarter.

Retail

The closure of the Price Cutter on West Republic Road contributed to the overall decrease in retail net absorption in the quarter, which was 45,713 square feet. The building added 50,250 square feet to the market. The retail vacancy rate rose slightly to 5.2 percent during the last three months from 5 percent in the first three months of the year.

As of June 30, Willard posted the highest vacancy rate in the area at 8.2 percent, while southeast Springfield recorded the lowest rate, 2.8 percent. Battlefield Mall was reporting no retail vacancies at the end of the second quarter, which, the report said, could be a hopeful sign for the overall retail market. There were 16.8 million square feet of retail inventory with just more than 1 million square feet available for sale or lease, according to Xceligent.