[caption id="attachment_53513" align="alignright" width="389" caption="Clockwise from top left: Al Coppin, Bill Kampton, Steve Crocker, Haden Ongaro, Steven Leonard"][/caption]
Businesses are out in greater numbers shopping for real estate to buy and lease, but local commercial property experts are quick to note that it's not the surge of activity seen in recent months in other parts of the Bay Area.
Office space vacancy in Sonoma County has been steadily high for the past two years, ranging between 22 percent and 24 percent, according to commercial real estate brokerage Keegan & Coppin. In the first quarter, 23.5 percent of the county's 13.8 million total square feet was estimated to be available for lease.
A key reason for that has been significant reductions in rent for the top-quality (class A) space, creating vacancies in class B space, according to Al Coppin, president of the brokerage. Financial services and health-related companies were big benefactors in the past few years.
There was 168,000 more square feet available for lease in the first quarter than there were a year before, despite small but positive 59,000 square feet of net absorption of office space in Petaluma, according to Keegan & Coppin.Top commercial real estate deals and the people who made them happen
April 30, 2012
The “Top Deals and the People who Made them Happen” represent the top leases and sales for each Marin, Napa, Solano and Sonoma counties. They are based on submissions from the largest brokerages and Business Journal research. [read more]
"We don't see a resurgence of everyone looking for space, but we're not seeing retrenchment," Mr. Coppin said. "It's kind of just bubbling along. That's not unusual for Sonoma County."
However, sales of commercial property are at a pace that's double what it was a year ago, as lenders increasingly look to fund good deals and property values remain below the cost of constructing a new building, Mr. Coppin said.
Different from the rock-bottom pricing of Petaluma of two years ago, owners are bringing properties to market with more sensitivity to what market demands are. For example, some of the buildings Basin Street Properties repurchased in Petaluma last year were resold to investors, some of whom have sold them again at even higher values, according to Mr. Coppin.
Industrial space vacancy in the county hit a recent bottom at 12.2 percent in mid-2011 and rose to 15 percent through the first quarter of this year, which is higher than it was two years ago.
Sonoma County retail space vacancy, however, has been steadily falling after peaking in 2009 during the rapid economic slowdown. The vacancy rate was 5.5 percent in the first quarter, down from 7.7 percent a year before and nearly 9 percent in early 2010.
Vigorous leasing activity in the South Bay, on the Peninsula and in San Francisco in recent months is encouraging for the North Bay but more for the future, he said. Wealth created there has migrated over the years to the North Bay because of the better lifestyle, resulting in ventures here.
Year-over-year job growth in Sonoma County has been trending upward since late 2009, according to Employment Development Department figures. After falling in the second and third quarters of last year, annual job growth resumed the upward trend in November, finishing March at negative 0.4 percent.