The raw numbers aren’t good, with vacancy rates still rising in the Des Moines office market. But a new report from CBRE|Hubbell Commercial found some positive signs in this key Iowa market.
The biggest positive sign? Hubbell Commercial reported that Des Moines’ CBD recorded its second consecutive quarter of positive net absorption in the office sector. The city’s downtown office vacancy rate has dropped 40 basis points during the last two quarters, falling to 18.7% in the first quarter, according to Hubbell Commercial’s first quarter Des Moines Marketview Report.
The CBD also accounted for three of the top-four office leases reported in the first quarter of the year. This slice of the Des Moines office market notched 13,561 square feet of positive net absorption during the quarter.
The amount of sublease space on the Des Moines market also fell for the second consecutive quarter, bringing total availability down to 320,000 square feet. This downward pressure on sublease vacancy during the quarter was driven by EcoEngineers subleasing 14,273 square feet from Dwolla at 909 Locust St. in the CBD.
Overall, though, the Des Moines office market continued to struggle during the first quarter. Hubbell Commercial reported that the Des Moines’ office market saw 142,369 square feet of negative net absorption during the first quarter. That increased the overall Des Moines office market vacancy rate 70 basis points to 16.7%.
This negative absorption was largely driven by Wells Fargo vacating 143,000 square feet of call center space at 6200 Park Ave. in Des Moines. The move increased the south submarket vacancy rate to 46% in the first quarter.