Official: Less call for office space
About 130,000 square feet of Nevada County office space remain vacant because some business owners are choosing to set up shop at home or downsize to smaller spaces.
Compounding the problem is the construction of new business complexes at a time when older office spaces remain empty, said Ricki Heck, owner and broker of Coldwell Banker Commercial.
The 130,000 square feet of vacant office space was determined by a third-quarter report released this month by Coldwell Banker Commercial. The office vacancy rate is 8 percent here compared to 13.4 percent in Sacramento, the report said.
Despite the vacancies, building companies have another 40,000 to 50,000 square feet on the drawing board. The office spaces being built now will increase the vacancy rate, Heck said.
“The demand for office space has decreased over the last few years,” said Heck, while the demand for small space by locally owned companies has gone up.
“We believe it’s the downturn in the economy,” Heck said. She blamed stagnate job growth in recent years.
Some offices have been vacant for more than a year and could have been rented if priced more affordably, said Scott Mackey of Mackey Real Estate.
“It makes you wonder why people are holding out for higher dollar figures,” Mackey said.
In the last 60 days, nine small offices were leased, averaging 750 to 1,000 square feet, Heck said.
The growing demand for spaces smaller than 1,000 square feet is linked to advances in computers that make companies more efficient, Heck said. Many small businesses – such as consultants and mortgage brokers – discover they can save money by working from home.
“The Internet has shifted a lot of business to home offices,” Mackey said.
Even big companies are getting smaller. The telephone company, SBC, signed a lease for three, 1,000-square-foot units rather than one large office to make it easier to downsize in the future, Heck said.
The “lease up” time – the time it takes to lease an office – has grown from 90 days to four to six months, Heck said.
Owners of large, outdated office spaces will have to think more competitively and provide incentives to attract tenants, Heck said.
“They will need to be patient because the lease-up time will be longer,” Heck said.
To contact Staff Writer Laura Brown, e-mail email@example.com or call 477-4231.
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