Steady. That’s the best way to describe the commercial real estate segments in the Des Moines area, according to two surveys recently released by Des Moines-based CBRE|Hubbell Commercial.
The 16th annual Des Moines Metro Real Estate Market Survey, prepared by Frandson & Associates, and the 43rd annual Des Moines Metro Apartment Survey, drafted by Commercial Appraisers of Iowa, both show that the main property types in the Greater Des Moines area — office, industrial, retail, investment and multi-family housing — are all rebounding at a steady pace.
The news for office was decidedly mixed. The occupancy rate in this sector in the Des Moines area hit 89 percent in 2012, up a slight 0.5 percent from the previous year. The reason for the small increase? Occupancy rates declined by 2.6 percent in the Class-C sector. This means, of course, that occupancy rates did rise in the Class-A and Class-B office sector.
“The combination of increased leasing activity, conversion of some Class-C buildings to residential and the repurposing of two vacant office buildings located in the CBD is positively impacting market fundamentals and breathing life and vitality into our market,” said Jan Berg, office expert for CBRE|Hubbell Commercial. “These renovations remove buildings, such as the JC Penny Building and Des Moines Building, from office inventory and raise competitive office market occupancy.”
The news was better for industrial. The occupancy rate for industrial hit 91.6 percent, its highest level since 2001. The news was also largely positive for retail in the area. The occupancy at key retail centers remains strong. Jordan Creek Town Center has an occupancy rate of 98.8 percent, while the rate at Valley West Mall hit 95 percent. The occupancy rate at Merle Hay Mall is at 96.4 percent.
And the redevelopment of Southridge Mall has been positive so far, with tenants such as Foot Locker, Kay Jewelers and Rue 21 opening new stores in the mall.
“As the outlook for the economy brightens, so has the greater Des Moines retail market,” said Tyler Dingel, retail expert for CBRE|Hubbell Commercial.
