Wednesday, July 29, 2009

Vancouver CRE vacancy rate reaches 17%

Last week I mentioned my surprise when The Columbian offered up an objective look at the Vancouver market.
Well, they did it again. This time it is about the sagging commercial and industrial real estate sectors.
From the Columbian:

On top of the recent lumps taken by area home sellers, Clark County's commercial real estate market is beginning to feel the pain of recession.

The evidence is growing as "space for lease" posters around the county signal increasing office, retail and industrial vacancies. And similar to the decline of the once-robust housing market, rising commercial vacancies push down property values and put building owners in danger of mortgage delinquency.

High vacancies also curtail future development, with banks reluctant to lend on new construction, said Roger Qualman, executive vice president of NAI Norris Beggs & Simpson commercial real estate firm.

"There's not going to be much new construction for a while," Qualman said...

Delayed projects in downtown Vancouver include the proposed $160 million Riverwest mixed-use project and the $17 million The Luxe, a six-story office building proposed by local developer Elie Kassab. Scarce commercial lending thwarted his original plans to break ground last year on the building, said Kassab, president of Vancouver-based Prestige Development.

"Financing for commercial real estate is nonexistent, right now," he said...

"Most people would tell you we're dragging along the bottom of the market," Qualman said.

He does not expect the Clark County commercial real estate market to reach full recovery until 2011 or 2012.

"We're waiting for the stock market to perk up and businesses to start making money, recovery in new home construction and employment," Qualman said. "We're waiting for something to lead us out of the recessionary time."