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July 23, 2014

Tacoma office vacancy rate drops to 9.4 percent

Business Examiner

Months after the insurance titan's arrival into downtown Tacoma, State Farm continues to have a measurable effect on its new home's office real estate market.

According to a newly released report from commercial real estate firm Kidder Mathews, Pierce County's market vacancy rate dropped to 9.4 percent in the second quarter of 2014, primarily because of the commencement of State Farm Tacoma leases.

Net absorption in the second quarter was 108,671 square feet, with the availability rate falling to 12.7 percent, down 70 bps over the first quarter.

Asking rent declined a bit in the quarter, though this was a function of the lower quality of the remaining inventory of vacant space. The Tacoma CBD vacancy is 9.5 percent, propped up by a significant amount of space in the market that is inefficient or difficult to lease.

Sales in the market remain limited to smaller properties, including a growing number of owner/use acquisitions.

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