[caption id="attachment_19363" align="alignright" width="108" caption="Dave Peterson"][/caption]
Santa Rosa office vacancy remained flat throughout the second half of 2009, recording 16.1 percent for both the third and fourth quarters. The year-over-year increase in vacancy was less than 1.0 percent above the 15.3 percent vacancy factor in the fourth quarter of 2008.
Since the opening of 2010, we have seen a slight increase in tenants looking at space in the market, likely a result of hints of positive economic news in the media and the recent increase in business confidence. However, the levels are far below those we saw at the height of the market.
The slight increase in demand along with unchanged vacancy is leading us into a more stabilized market with rents leveling off and ending their downward spiral.
We anticipate the market demand to continue to be sluggish through the spring and are cautiously optimistic that tenant demand will continue to grow throughout the year. The increase in demand will lead to a healthier market by year end.
Significant lease transactions over the last few months include the Community Child Care Council for 8,719 square feet at 131 Stony Circle, SMART for 7,229 square feet at 490 Mendocino Ave. and Pisenti & Brinker for 6,200 square feet at 3562 Round Barn Circle.
Owner/users have also been active in the market recently, taking advantage of these unprecedented times with Santa Rosa Community Health Centers' purchase of the 42,588-square-foot building at 3569 Round Barn Circle and the county of Sonoma’s purchase of 20,000 square feet at 2755 Mendocino Ave.
The title of the recent Sonoma State University economic outlook conference “The Time is Now” couldn’t have more meaning than it does with the current office real estate market. We are at the bottom of the market, and now is the time to take advantage of the current opportunities before it’s too late.