Metro Toledo's commercial real estate market is experiencing a modest recovery compared to the end of 2010 but has declined from a year ago, according to a report by CB Richard Ellis/Reichle Klein.
In its midyear market overview, the Toledo real estate brokerage firm reported a 16.7 percent office vacancy rate in the region, down from 17.4 percent at the end of 2010 but up from 16.5 percent a year ago.
The suburban office market fared better than the overall metro area's with a 14.1 percent vacancy rate during the first half of this year, down from 15.2 percent at the end of 2010 but up from 13.8 percent a year ago.
CB Richard Ellis said last year's figures do not reflect adjustments that may have been made to the reports since they were first issued.
Despite what appears to be a slight increase in vacancies since last year, Harlan Reichle, the real estate firm's senior managing director, said it seems the local commercial real estate market may be experiencing a slight comeback. "I feel certainly confident on the office segment that we will see improvement through the balance of the year, based on transactions in the works right now that I know of," he said.
Hanson Inc. had the region's largest office real estate transaction in 2011's first half, with a 26,000-square-foot lease at Arrowhead Park in Maumee. The interactive marketing agency is expanding its business at a previously vacant space inside the commercial complex.
The office market also was boosted by new tenants at One SeaGate in downtown Toledo, including a 9,500-square-foot lease for telecommunications company American Broadband & Telephone and a 7,700-square-foot lease for accounting firm Clifton Gunderson LLP.
Despite decreased vacancies, lease rates for office properties fell to $15.31 per square foot in the first half of 2011, compared to $15.43 at the end of 2010 and $15.65 a year ago. Mr. Reichle said the rates probably reflect lower-quality buildings on the market and pressure for landlords to offer competitive rates.
CB Richard Ellis reported a 9 percent vacancy rate for industrial buildings across northwest Ohio, compared to 8.6 percent for end of 2010 and 9 percent a year ago. Toledo-area suburbs had a 9.2 percent industrial vacancy rate for the first six months of 2011, compared to 8.8 percent at the end of last year and 9.3 percent a year ago.
Industrial lease rates for the metro area fell to $3.01 per square foot, down from $3.05 at the end of last year and $3.09 a year ago.
Vacancy rates for the industrial sector were helped by Inland Tarp & Liner LLC's purchase of a 192,000-square-foot building on Main Street in Fostoria. The Moses Lake, Wash., firm makes tarps and covers and bought the building last spring to serve customers in the eastern United States.
CB Richard Ellis said the local industrial market could see a boost later this year from a $204 million investment in General Motors Co.'s Toledo Powertrain Plant as well as a predicted expansion of Chrysler Group LLC's Toledo Assembly complex -- both of which could attract business from suppliers.
Sam Zyndorf, a commercial real estate broker with the Toledo office of Signature Associates, said he's seen new tenants buying or leasing space in the local industrial market, particularly in the auto sector.
Still, he said companies seem to have trouble finding financing that can help them move into new facilities.
"Rates are relatively cheap," he said. "You've just got to be able to get the money."
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