Small-Scale Vacancies and New Space Hit The Market
2019 is starting out a bit bumpy for the Northern Nevada office market with vacancy increasing from 11.8 percent at the end of 2018 to 12.5 percent this quarter. This was due to 78,154 square feet of negative net absorption, continuing the downward trajectory we saw in the fourth quarter where there was 79,018 square feet of negative net absorption after two quarters of positive absorption. Vacancy was as low as 11.0 percent in the third quarter of 2018. Last quarter we discussed that the give-back of space was regulated to a few buildings with a high amount of vacancy hitting the market, including 86,471 square feet vacated by AT&T at 645 E Plumb Lane, as well as large blocks of Class C space being difficult to backfill due to the age, quality and location. However, the first quarter of 2019 was different. Instead of large blocks of space being returned in specific locations and classes of buildings, the give-back this quarter was a variety of small vacancies in all classes and submarkets and the delivery of new space to the market, including the completion of 5520 Kietzke Lane with an estimated 25 percent vacancy.
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