Not all Midwest markets are seeing vacancy rates fall. Just consider Fort Wayne, Ind.
The Zacher Company/CORFAC International recently released its 2012 Fort Wayne office market survey. And the results show an office sector that’s still struggling to recover in what remains a challenging economy.
The total office market vacancy in the Fort Wayne area rose from 17 percent in September of 2011 to 17.32 percent in the same month this year. The city’s downtown office vacancy rate rose from 8.2 percent to 8.95 percent during the same time. The highest vacancy rate — 35.33 percent — is in the northeast quadrant of the Fort Wayne area.
Here is The Zacher Company’s take on the area’s office sector: “The Fort Wayne office market continues to be challenged by economic circumstances. In addition, local companies are reducing or relocating regional offices and headquarters. Local companies are reducing their overall space requirements.”
Officials with The Zacher Company say that they expect office landlords to offer reduced rents, generous tenant improvement allowances and concessions to keep their cash flows intact.
Despite the challenges in this market, there have been some highlights in 2012. The Parkview Regional Medical Center opened in the market, causing several medical practices to relocate to office space on the Parkview campus on the north side of Fort Wayne.
In downtown Fort Wayne, the Anthony Wayne building was bought and is now being renovated into a multi-use building with residential, office and retail offerings.
Construction on The Harrison mixed-use project, adjacent to Parkview Field baseball stadium, continued. The project will include residential, office and retail. Carson, Boxberger law firm has commited to occupying 24,000 square feet on the second floor of the building. The law firm will move into the building in 2013.
Despite these notable transactions, though, the Fort Wayne office market remains a challenging one. The Zacher Companies report is another reminder of how much work needs to be done to completely rejuvenate markets across the Midwest.
– Dan Rafter