CARRIAGE HOUSE REALTY
CARRIAGE HOUSE REALTY | Leasing slow, but vacancies stabilize | ||
|
Oct 27, 2009 Leasing slow, but vacancies stabilize Local commercial real estate activity sluggish in third quarter, but vacancy rates seem to be stabilizing
Date published: 10/15/2009BY BILL FREEHLING
Commercial real estate activity was sluggish in the Fredericksburg area in the third quarter, but vacancy rates appear generally stable, according to Thalhimer/Cushman & Wakefield. Thalhimer, a commercial real estate firm with an office in Fredericksburg, published its third-quarter market reports this week for retail, office and industrial space. A link to the reports is at fredericksburg.com/blogs/bizbrowser. The reports show that leasing and investing activity was sparse in the local commercial real estate market for the three months ending Sept. 30, but that vacancy rates have stabilized due to few new projects and landlord concessions. With a 24.5 percent rate, industrial space had the greatest percentage of vacancies in the area for the third quarter. Vacancy rates are still rising, Thalhimer notes, but the pace seems to be slowing, and limited new construction should help. Lease rates have also come down in the past year. The area includes Fredericksburg and Caroline, King George, Stafford and Spotsylvania counties. A lack of available financing has hurt sales of industrial-focused buildings, the report notes. In the past, investors could borrow up to 80 percent of the cost, but now it's 60 percent. The area's office vacancy rate was 13.5 percent at the end of the third quarter. That's up from 13.1 percent in the second quarter but down from the rates in the three quarters before that. Most of the leasing activity for the third quarter was for smaller spaces. Leasing activity this year is on track to equal or surpass last year's totals. Thalhimer notes that tenants are aggressively negotiating lease terms with landlords, leading to leases that are shorter-term and have more concessions. At 7.5 percent, the area's retail vacancy rate was the lowest of the three categories. Thalhimer classifies that rate as healthy considering the state of the economy. Some experienced franchises are looking to lock in low rates now before the economy turns. The vacancy rate goes up when it's based only on retail spaces of less than 15,000 square feet. The number of retail deals in the area through Sept. 30 was about half the total from 2008. Rent rates are down about 5 percent to 10 percent from the same period in 2008, and landlords are offering additional incentives to sign tenants. Bill Freehling: 540/374-5405
|
||