BEND, OR -- Commercial vacancy rates continue to fall in Bend. Pat Kesgard, with Compass Commercial, says office, retail and industrial markets tightened in the fourth quarter, following a year of recovery.
And, he tells KBND News he expects that trend to continue in 2016. "We’re going to see new buildings; we’re going to see redevelopment. We have some companies that have survived this downturn, that now are growing, and some of these companies are traded sector, where we ship their product outside of Central Oregon. And, they’re stepping up in the size of production or warehouse facilities. So, consequently we see this continuing at this point." He adds, "If you own a business and you want to look at buying, again, that’s starting to get very tight. On the other side, if you’re a landlord, your rates can be higher. If you’re a landlord and you want to sell, or you want to sell your business, now would be a very good time." That growth is resulting in less available space and higher lease rates, which he says is good for landlords not locked into recession-era rates.
According to the latest statistics gathered by Compass Commercial, Office vacancies fell from 7.4% in the Third Quarter to 6.8% in the Fourth; industrial vacancies fell from 6.3% to 5.9% in Q4 and Retail saw the biggest decline, from 6.4% to 5.2%.
Kesgard says things could change if the national economic climate changes, but he doesn't see that happening anytime soon. "But, if you look at long-term interest rates, if they tick up appreciably in any short period of time, that’ll put downward pressure on everything. But, at this point, we’re rather bullish on 2016. So, what that means is, if you’re a tenant and you need more space, you need to be talking to a commercial broker sooner rather than later."
Eventually, Bend's Urban Growth Boundary expansion could help ease the market, with an influx of buildable land. But, Kesgard says that fix could be at least four years out.
To hear our full conversation with Pat Kesgard, visit our Podcast page.