Office vacancies and rents across the Toledo metro area have remained flat the last six months as tenants and landlords "hunker down" to ride out the weak economy, according to a semiannual survey by commercial brokerage CB Richard Ellis/Reichle Klein.
The survey found an overall area vacancy rate of 17.5 percent, compared with 16.75 percent at the end of 2007. The survey does not include obsolete buildings like Fiberglass Tower or the Madison Building downtown.
Mike Poulos, a senior vice president with the firm, noted that the region's low rate of speculative building helps keep rents and vacancies stable.
According to the survey, the region added just 52,400 square feet of new office space in the last six months, and just 67,400 square feet last year.
New construction accounted for less than 0.5 percent of the region's 13.7 million square feet of office space.
One large reason for the dramatic falloff in office construction - more than 200,000 square feet was added during three six-month periods over the last eight years - is the tight credit market. Lenders have become increasingly reluctant, and in some cases now refuse, to issue loans for commercial buildings that do not have firm tenant commitments.
The survey also found that lease rates have remained stable at an average of $16.26 per square foot a year, down slightly from a year ago.
Average lease rates remain lower in Toledo's central business district - bounded by the Maumee River, I-280, and I-75 - at $15.72 per square foot, compared with $17.21 in suburban areas.
Jeremy Miller, a senior associate at CB Richard Ellis who specializes in office buildings, said tenants have a significant amount of negotiating power.
"If you're a proactive tenant and realize where the market is at, it might be worth it for some of these companies to [renegotiate]," Mr. Miller said.
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