In the third quarter of 2017, Redmond’s industrial market shows that it is building steam. The vacancy rate is at 2.2%, significantly different from the 30% vacancy rate during the most recent recession. Lack of opportunities in the adjacent city of Bend, along with a lack of new construction may be main factors in the increase in lease rates and low vacancy. Redmond’s location in Central Oregon is advantageous to businesses providing close proximity to the regional airport and other transportation hubs and will create the perfect location when building continues. It has been profitable for many entering the market with the existing industrial properties.
The citywide office market in Bend showed a positive net absorption of 27,928 square feet, causing the vacancy rate to drop from 3.73% to 2.64% of just under 2.5 million sq. ft. total in the survey. This is a record low vacancy rate in the Bend office market since Compass began tracking vacancies in 1996.
In Bend’s retail market, over 4,464,000 sq. ft. was surveyed, showing a positive absorption of 17,414 sq. ft. bringing the vacancy rate down from 3.15% in Q2 to 2.6% in Q3. The retail market in downtown remained where it was at 0.0% vacancy, likewise, the Old Mill District remained at a low 1.2%. The east side ended the quarter with a vacancy rate at 0.9%. Conversely, the west side had negative absorption, ending the quarter at 6.2% vacancy.
The industrial market in Bend included 305 buildings and over 4,265,000 sq. ft. Within this market, there are two submarkets with 0.0% vacancy, the central and west side, however, the northeast side has increased in total square footage and continues to grow with new construction. The vacancy rate here is currently the highest of all the submarkets in Bend during Q3 at 5.9%.
Redmond’s industrial market net absorption was positive reducing the vacancy rate of 2.2% at the end of Q3. The 32,999 sq. ft. on the market for lease of the total 1.52 million sq. ft. surveyed industrial represents just over 6-month supply with the current leasing activity.
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