[caption id="attachment_19287" align="alignleft" width="235" caption="James Manley"][/caption]
Last year saw some big changes in Petaluma’s commercial landscape.
Cisco’s sale of 187,000 square feet to Cornerstone Properties, and 3M’s exit of 72,000 square feet significantly added to office and industrial vacancies respectively. There will be some continued correction in the market that will suggest opportunity for office tenants to make deals with very aggressive landlords who can, and likely will, do what it takes to get lights on in their buildings.
Some entrenched landlords maintain asking rents around $2.50 per square foot full service while others are asking as low as $1.20 full service. Office vacancies in the fourth quarter 2008 were 32.6 percent (993,000 square feet). In the fourth quarter of '09 they stood at 41.5 percent (1,310,000 square feet). These numbers are bringing budget-conscious businesses out of the woodwork for both lease renegotiation and corporate relocation.
Industrial vacancies are significantly lower but increased to 18.1 percent. Most space available is in the $0.75 to $0.90 per square foot range, but there is opportunity to take advantage of landlord incentives and teaser rates as low as $0.45.
Unfortunately, I am starting to receive phone calls from users who are under threat of slipping into foreclosure. Petaluma’s industrial backbone does give me a higher level of confidence in that market segment.
Commercial brokers are much busier at this time than we were last year. People in other markets are aware that Petaluma is a field of opportunity and are starting to plan their moves.