Monday, August 3, 2009

Kruse Way CRE vacancy rate hits 22%

From the DJC:

All of Portland’s office markets showed signs of suffering during the second quarter of 2009, according to numbers recently released by Grubb & Ellis. But nowhere is the effect more noticeable than Kruse Way, where vacancy rates for office space are climbing at a rate higher than the city average.
Three years ago, Kruse Way was lauded as a local success story. Office space in speculative buildings seemed to be leased almost as soon as it hit the Portland submarket just off Interstate 5.
Now, however, Kruse Way vacancy rates hover around 22 percent, compared with 13.5 percent for the entire metro area. And when space is leased in the area, it sometimes comes at a rate discounted as much as 20 percent.
Raymond Duchek, vice president of CB Richard Ellis, attributes the current abundance of unleased space on Kruse Way to the fact that in fat years the area was home to a large number of real estate and financial companies. But those two industries have suffered during the economic downturn.
“It’s a sign of the time,” Duchek said.
Other signs: the newly opened Kruse Oaks III, a 110,000-square-foot office building, sits completely empty, and a 22,000-square-foot building remains unoccupied since Textron Financial closed its commercial finance division.