Thursday, October 25, 2007
Commercial vacancies are up, but so are average rents
Colorado Springs commercial vacancy rates climbed during the third quarter of 2007, but rents inched up, too. What gives? Doesn't an increase in supply -- greater amounts of office, industrial and shopping center space available to lease -- and a reduction in demand result in lower prices? Not this time, according to the latest quarterly analysis of the market by Paul Turner of Turner Commercial Research in Colorado Springs. The paradox might be explained by several new projects, which carry higher rents, being added to the larger mix of buildings for lease, Turner said in his report. As a result, average lease rates have increased. According to Turner's latest report, third-quarter office vacancies rose to 8.2 percent from 7.7 percent during the same period last year; industrial vacancies increased to 7.6 percent from 6.6 percent; and shopping center vacancy rates climbed to 7.1 percent from 6.6 percent. Office lease rates averaged $11.39 per square foot in the third quarter of 2007, up from $10.61 per square foot a year ago at the same time; industrial rents averaged $7.18 per square foot, an increase from $6.98 last year; and shopping center rents averaged $13.82 per square foot, up from $13.35.