"We were the last to feel the pain and we will be the last to feel the recovery."
As went the residential market and then the stores and shopping centers, now goes offices into the giant sucking sound of this Great Recession.
Office developers just opened a brand new beautiful Gateway Towers alongside I-5 in Natomas. But it opened without tenants. (Leases are in the works, says the report). Yes, the new LEED-certified tower boasts a great carbon footprint. But people now are more interested in cheap rent, says the report.
A few highlights: Downtown Sacrament remains the best off in terms of the office market, having the state as a major player. But the suburbs are apparently getting killed. There's a 42 percent vacancy rate now in the Roseville-Rocklin corridor for the best Class A office space. Folsom has a lot of empty space and so does Natomas.
Altogether, Colliers counts 14.4 million square feet of vacant office space in the region - with rents falling and that putting pressure on bottom lines and bank loans. That's going to spark more defaults and foreclosed office buildings as the economy in this region continues to remain very soft, possibly well into 2012.
Last into the tank and last out. That's the short version for office space. To read 14 pages of the long version click on the link above.
- Natomas Gateway Towers photo courtesy of Aguer Havelock Associates