Commercial and residential real estate markets here are expected to remain strong in 2006, with activity levels at least equal to this years brisk clip.
In the office market, tenants are expected to gobble up some of the glut of available space. The industrial and retail arenas will remain healthy, and real estate professionals say some interesting moves in those sectors appear to be on the horizon.
Home sales activity likely will level off, but stay at a record level.
All of the markets are really active, says Dave Black, part-owner of Tomlinson Black Commercial Inc. and Tomlinson Black Management Inc., both of Spokane. This past year has been a record year for our company. Were looking forward to more of the same in 2006.
Some big moves announced this year will occur in 2006Itronix Corp. will consolidate its South Hill offices and Liberty Lake manufacturing operations into its new building in Spokane Valley, and Itron Inc. will move to the former Telect Inc. building in Liberty Lake, vacating its big Valley location. Also, Mountain Gear Inc. will move its offices and warehouse to Spokane Valley, from smaller quarters near Gonzaga University.
Craig Soehren, a commercial real estate agent at Kiemle & Hagood Co., of Spokane, says that activity will free up large blocks of space and could spur additional moves by companies either looking to come into the Spokane area or to expand here.
In the downtown office market this year, a lot of vacant space has been absorbed. SDS Realty Inc. moved into the American Legion building and filled much of the rest of that venerable structure with other tenants. Wells Fargo Bank moved its Spokane offices into the newly named Wells Fargo Financial Center, formerly the Metropolitan Financial Center, and took more space than it had in its previous building. Meantime, WEB Properties Inc. moved into the old Wells Fargo building and began inking tenants for the freshly vacated space.
An office-vacancy survey conducted by the Spokane real estate appraisal firm Auble, Jolicoeur & Gentry found a 17 percent office-vacancy rate downtown this past fall, down from 24 percent in its survey the previous spring.
We would anticipate vacancy rates going down and a firming of rents as the year goes on, Soehren says.
In the retail market, Black says vacancy rates havent changed much, but a handful of national retailers are looking to open stores in the Spokane market, some of them with well-recognized names that are popular in other markets.
Were getting a real cool factor with retailers looking at this area, Black says. Youll see five or six new names in Spokane by this time next year.
The Auble, Jolicoeur fall survey found a 7.4 percent vacancy rate in the industrial sector, down from 8.2 percent last spring. Black says thats a healthy ratethere is space for companies to land here, but not a glut of such space.
In the residential market, the number of home sales in 2006 is expected to equal this years record levels, but the market likely will level off at that brisk pace, says Rob Higgins, executive vice president of the Spokane Association of Realtors. He says home values and average sale prices will continue to increase, though, so the volume of activity in 2006 should best this years volume.
Through the first 11 months of this year, 7,370 homes worth $1.25 billion were reported sold through the Spokane Multiple Listing Service, up from 6,940 homes worth $1.02 billion in the year-earlier period. Year to date, the median sales price was $149,200, up 16 percent from the year-earlier median price.
If we can do close to the same number of units sold in 2006, I would consider it a successful year, Higgins says. I think the residential market is in good shape for the foreseeable future.
Some of the luxury-condominium projects announced this year are scheduled to come on line in 2006. Black says he expects more projects to be announced next year, including some that will include smaller units at lower price points.
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