Vacancy rate begins to drop a bit downtown

8/10/2005

George Kamilaris, a downtown Toledo restaurateur, was pleased when a non-profit agency moved into a neighboring office building that had stood empty for four months.

"As long as its not vacant, it's good for us," said Mr. Kamilaris, who, with brother Chris, operates Georgio's Cafe International, 426 N. Superior St.

A commercial real estate agency that tracks vacancies says that non-profits like the Fair Housing Center, which moved last month into a building formerly occupied by marketing firm Roman/ Peshoff Inc., helped pump a bit of sunshine into an otherwise dismal downtown office picture.

Vacancies dropped to 16 percent in the first half of 2005 from 18 percent at the end of 2004 and 21 percent during the first half of 2004, according to the survey by CB Richard Ellis/Reichle Klein in Maumee.

And in a rare occurrence for downtown, more space was rented than vacated in the first six months of 2005, the survey showed. Yet it is hardly time to celebrate, survey-takers said. Owens-Illinois Inc. next year will move to suburban Perrysburg, boosting to 50 percent the vacancy rate in metro Toledo's signature office tower, the 32-story One SeaGate.

Many buildings, including the 30-story Fiberglas Tower, stand empty. (In fact, Reichle Klein last year dropped the long vacant building from the list of available space it counts. Other empty buildings not in rentable condition are also excluded).

"Statistically, you can't argue with the fact this was a better period than we've seen in a while," said Harlan Reichle, who compiles the survey. "But there's still a lot of reason to be concerned about the health of the downtown market. O-I's announcement that they're leaving settles some uncertainty but creates additional concern...."

The biggest contributor to increased occupancy has been charter schools, Mr. Reichle said. The real estate agency's report on vacancies describes the schools as "one of the few user types actively targeting the central business district and near CBD properties."

Downtown has the largest single concentration of offices in metro Toledo with 5.9 million square feet of space renting at an average of $14.01 a square foot per year, or 20 percent less than space in the suburbs.

The Fair Housing Center, an anti-discrimination agency, purchased its building at 432 Superior for $545,000, said Michael Marsh, housing center spokesman. The firm had for some time been seeking to replace rented quarters on the outskirts of downtown.

The agency is in the process of making improvements, including the installation of an elevator that will make the building handicapped accessible.

"It's a good location," Mr. Marsh said. "It's close to Government Center and the courthouse, and it has access to public transportation, which some of our clients rely on."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.