X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SALEM, OR-With vacancy rates rising and a record amount of space coming online, the development pipeline is shrinking and developers prepare for a soft market. Vacancy rates for retail also rose during the third quarter, according to the latest survey by Coldwell Banker Commercial.

Previous strength in the market has led to several projects that will have brought 151,324 sf of new office space onto the market by year’s end – the highest level since 188,000 sf in 1995. But with vacancy rates rising from 8.7% to 8.8% during the quarter, according to the latest survey by Coldwell Banker Commercial LLC, and a record amount of space coming online, the development pipeline is shrinking.

Sources tell GlobeSt.com that development of some product is being put on hold because vacancy rates are likely going to rise through the fourth quarter, putting downward pressure on rents headed into 2001. Spence Powell, owner of the Salem office of real estate appraisal firm Palmer Groth Pietka, confirmed fears in the Statesman Journal newspaper last week, saying, “I know of at least three or four projects that have been shelved because the market is soft.”

As usual, some of the market’s success will be determined by government action. While the state could need a little more space if some key ballot measures are passed, Marion County is expected to vacate some of its leased space in the near future, adding to the total availabilities.

Vacancy rates for retail also rose during the third quarter, according to the survey, while industrial availabilities shrunk. South Salem experienced the biggest jump in vacancies, rising from 5.3% to 15.2% in large part due to the closing of a 55,000-sf G.I. Joe’s store. Industrial vacancies fell to 4.98% in the quarter due to a few large buildings that were taken off the market.

Multifamily vacancies dropped from 3.1% to 2.7% in the quarter for newer units, thanks to a lull in new apartments building. The lull, of course, means vacancy rates will likely continue to drop, putting upward pressure on rents.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.