BEND, OR -- Commercial property vacancy rates fell again in Bend, in the fourth quarter of 2016, landing at record setting lows in nearly all sectors."It’s hard to imagine them continuing to go much lower, but they have," says Jay Lyons, with Compass Commercial Real Estate. "And, I think it speaks to the amount of demand we’re seeing in Central Oregon and the limited supply that we currently have."
Lyons says the tight market is driving up lease rates, and he doesn’t see that easing until construction picks up. "Land values are still at a premium, so if you were to buy land today, it would be difficult to make a new project pencil. The projects you are seeing built today are with developers that bought land four or five years ago when land prices were much more reasonable."
In Bend, office vacancies fell half a point to 4.6%, in Q4 2016; retail rates dropped .6% to 3.9%; and the industrial vacancy rate slid .8% to 4.7%. In Redmond, industrial vacancies fell nearly a full percentage point to 3.7%.
According to Lyons, only some of the narrowing of the market is due to new businesses moving to the area. He tells KBND News, "I think, to a larger extent, there are already existing companies here that are expanding their business. For instance, Bend Research just increased the size of their facility, HydroFlask is growing, St. Charles is continuing to occupy space and move administrative uses out of the hospital so they have more medical space at the campus. It’s just, I think, overall growth as the economy continues to improve."
To hear our full conversation with Jay Lyons, visit our Podcast Page or click HERE.