In the office market last year, Clark County saw 12 new projects come on line and 305,047 sf of net absorption, which was double that of 1999. Still, it wasn't enough to take up the slack, and vacancy rates surged to 16.67% at the end of last year from just under 3% in 1999. Rental rates, meanwhile, showed little change, and building owners reported few concessions.

As for 2001, seven pending projects will add nearly 285,000-sf of space to the office market this year, according to the report. Class A rents will stay in the $20 per sf range until tenants soak up more of the supply.

In the industrial market, Clark County reportedly has 300,000 sf of space under construction and as much as 3.5 million sf of space in the pipeline. Among this year's projects are the 48,000-sf Salmon Creek Warehouse and 144,000 sf of space in two buildings at 205 Distribution Park. Vacancy rates at multi-tenant parks are at 8%, having dropped from a record high of 10% in 1999.

On the retail front, more than 500,000 sf was built in Clark County last year. This year's projects should add another 500,000 sf. Redevelopment in Downtown Vancouver is beginning to attract newcomers such as Starbucks at Heritage Place. Development will be hottest in the 164th Avenue corridor, in the Hazel Dell/Salmon Creek area, in Battle Ground and Washougal. Ridgefield and 192nd Avenue also will see some activity.

As for raw land, it is expected that upward of 400 acres of commercial property will change hands this year. Unlike Portland, there's plenty of industrial land up here. Ridgefield has more than 900 acres, Woodland has 501 acres, Kalama has 200 acres and Longview has 800 acres. Industrial land prices rose 21% last year, to $3.43 per sf, from $2.70 per sf in 1999, according to the report.

"Clark County and Southwest Washington stand in the path of growth north from Portland and we expect growth along the I-5 corridor to continue for some time," Roger Qualman, executive vice president of the firm's Vancouver office, tells GlobeSt.com. "It will include the infilling of good properties available within the UGB, and the spread of the market northward to Ridgefield and then to Woodland and then to Longview."

A good start, he says, is Consolidated Freightways' relocation of its local operation from Portland to Vancouver. "There's a lot of labor available in Clark and Cowlitz Counties that, although currently commuting across the bridges to Portland, would work in Clark County if they could find jobs here," Qualman tells GlobeSt.com. "The current estimate is that some 60,000 Southwest Washington residents commute to Portland for their jobs."

Instant Insights /

Southwest Washington Real Estate Market Will Remain Healthy in 2001

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