While the market registered 5,151 sq. ft. of negative net absorption in Q4 2018, the vacancy rate declined by 38 bps quarter-over-quarter to 18.7%, due to the elimination of two vacant buildings. A 34,785-sq.-ft. building was repurposed and a 22,266-sq.-ft. building was sold to an owner/user.
The year-end net absorption recorded 57,751 sq. ft., positive for the second consecutive year. The vacancy rate declined by 142 bps from one year ago.
The Class A vacancy rate declined to the lowest in market history. With current asking lease rates not high enough to justify new construction, many existing tenants who are looking for better quality space end up renewing their existing leases.
There will be new vacancy opportunities in coming year. However, with no speculative construction planned, quality space will continue to be in short supply, limiting the amount of leasing activity among Class A and Class B+ buildings.