Office vacancy rates continue their decline

Office vacancy rates in the Reno market are nearing the point where developers think about building new space.

The office vacancy rate in the Reno area - 11.79 percent during the second quarter is close to the 10 percent rate that is the balance point between a renters' market and a landlords' market, said Tim Ruffin, managing partner and vice president of the office properties

group of Colliers International.

During the first half, Colliers estimates that 226,372 square feet of office space in the market were absorbed.

New construction added 180,192 of new office space during the first half.

While few new tenants have come into the market, the Colliers study found that expansion of existing firms drove vacancy rates down.

During 2001, Colliers estimated the office vacancy rate to be 12.71 percent.

(National vacancy rates are about 16 percent.) Among the major activity in the market in the second quarter: Microsoft's lease of 31,000 square feet in the Sierra Corporate Center, Redundant Systems' lease of 30,000 square feet at Reno Tahoe Tech Center Building One, the City of Reno's taking of 21,000 square feet at 1 E.

1st St.

and Washoe County's lease of 21,000 square feet at 50 W.

Liberty.

The government leasing activity helped drive the downtown vacancy rate to 11.4 percent, and Ruffin said space is getting tight in most high-rise buildings.