BEND, OR -- Commercial vacancy rates dropped to near-record lows in Bend in the first quarter of 2016. Pat Kesgard, with Compass Commercial Real Estate, says office vacancies dropped another half a percent, to 6.3%. "What that means in square feet, is about 19 – almost 20,000 square-feet of office that was absorbed in that quarter." He says the tightening market will cause lease rates to rise in the coming year, assuming things like interest rates and future growth continue as expected.
Kesgard tells KBND News, "When we talk about that vacancy, 6.3%, the majority of that is going to be along Third Street corridor in Bend – about 12% vacancy in that area." But, he also says redevelopment along Third Street is likely to tighten that area, as well. "Perfect example of a retail development is where the Platypus Pub is, that and two adjacent buildings, was recently sold and that will be totally redeveloped. So, you’re going to see that retail development, and some of those older buildings go away."
Retail availability also dropped a half a percent, to 4.7% in the first quarter. And, the Industrial vacancy rate fell nearly three-percent to 3.4%.
Kesgard says that lack of availability is forcing many companies to Prineville and Redmond. "What is so interesting about Redmond, there is so much industrial land, and so many finished lots that are ready to be built on, that’s going to be a lot of where the industrial tenants are going to go." Redmond’s industrial vacancy rate fell from 5.4% to 4.8%, in the first quarter.
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