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Reno shows office strength

The office vacancy rate in downtown

Reno during the second quarter

was below most other cities in the

region, according to a research report

from Colliers International.

Reno’s downtown vacancy rate of

11.4 percent on June 30 compares with

13.9 percent in downtown properties in

Las Vegas, 14.9 percent in San

Francisco, 15.1 percent in Portland and

12 percent in the San Jose/Silicon

Valley region.

Sacramento, with an 8.4 percent

vacancy rate, and Salt Lake City, at

10.5 percent, posted lower rates in their

downtown regions.

Nationally, the office vacancy rate

in metropolitan downtown areas was

13.6 percent, said Ross J. Moore, USA

director of research for Colliers.

Among suburban office properties,

the Colliers study found Reno’s vacancy

rate of 11.9 percent was lower than

other cities in the region.

Las Vegas and San Jose each

reported a 12.4 percent vacancy in suburban

offices, while Sacramento reported

a 13.6 percent vacancy rate and

Portland reported a 21.1 percent vacancy

rate in those properties.

Nationally, the vacancy rate in suburban

properties was 16.6 percent.

Reno’s downtown includes 1.65

million square feet of office space.

No new office space in the area was

opened during the second quarter of

this year, and none is under construction,

the Colliers report said.

Suburban offices account for 5.7

million square feet of space in the

Reno area. While no office projects

are under construction, the second

quarter saw the addition of 180,000

square feet of suburban office space to

the inventory.

Moore said leasing activity in the

office sector across the United States

remained slow during the second quarter

in all regions.

“With the U.S. economy posting

anemic growth in the second quarter

and more accounting scandals surfacing

by the week, corporate America was

only interested in shedding space, not

taking on more,” he said.

Moore said subleasing of space

remained an important part of the

market nationally. The amount of

subleased space rose by 7.2 percent

nationally during the second quarter.

The Colliers researcher predicted

that rents will remain soft nationally

through the remainder of this year and

vacancy rates will continue to rise.

He said the national office vacancy rate

may reach 17 percent by the end of this

year, and the softness is likely to continue

into the early months of 2003.

“With the economy producing few

new jobs and financial markets experience

extreme volatility is is unlikely significant

new demand for office premises

will resurface any time soon,” he said.


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