Greg DiVilbiss doesn’t see all the “for lease” signs in front of Lawrence offices as a sign of a weak economy. He sees them as a sign of a community looking to capitalize on missed opportunities.

An office study conducted late last year for the Lawrence commercial real estate firm of Grubb & Ellis/The Winbury Group showed a 17 percent vacancy rate in the Lawrence office market, up from historic levels of about 5 percent.

Greg Cromer, president and managing broker for American Real Estate and Investments Inc., stands in the empty conference room of an office at the newly completed Art Executive Park at Kasold Drive and Peterson Road.

DiVilbiss and his family’s business, The Bristol Groupe, have helped push up that percentage, with a new 50,000-square-foot, high-tech office building, the first of possibly four that will make up the roughly 400,000-square-foot, $40 million Wakarusa Corporate Centre near 18th Street and Wakarusa Drive.

“I don’t buy that the office market is overbuilt,” DiVilbiss said. “When you are at a 4 or 5 percent vacancy rate, that really means there is hardly any space to show potential businesses. If we were at a 40 percent vacancy rate like they are out in San Francisco, then that would be a problem.

“But I think before we were too low because what we have found is you have to have the space built before you are going to attract anyone. They’re not going to wait on you to build it.”

Another 90,000 feet

Greg Cromer, president and managing broker of American Real Estate and Investments Inc., has jumped into the large-scale office market with a 90,000-square-foot center at Kasold Drive and Peterson Road.

He said his company decided to build the project, named Art Executive Park, because he was tired of seeing many businesses bypass Lawrence because of a lack of selection.

“It’s hard to determine how much business we’ve lost, but I’d say that with the amount of space we have now, we probably could have filled half of that if we had it over the last seven years,” Cromer said. “That would have meant a lot of nice jobs for this community.”

Both Cromer and DiVilbiss are marketing their properties as a new breed of Lawrence office space that caters to businesses looking for an upscale setting.

Cromer’s project will feature a Japanese garden, and DiVilbiss’ building greets visitors with fine cherry woodwork and a custom-designed, 6-foot chandelier.

“If this community is going to attract the type of jobs it keeps talking about high-tech and high-paying it has to have the type of buildings that appeal to those companies,” DiVilbiss said. “This project will provide that type of corporate environment to bring them here.”

Small and high-tech

DiVilbiss’ project will have a high-tech emphasis. It’s wired for a large amount of high-speed Internet and telephone usage and designed to accommodate wet lab space to tie into opportunities associated with Kansas University’s pharmaceutical research.

Cromer also would like to see high-tech uses in his buildings, but said he’d open it up to a broad spectrum of white-collar professional office uses.

“There’s an assumption that everybody who commutes to Kansas City is working for huge companies, but I think there are lots of people who live in Lawrence but own or work for a company that employs only 12 or 15 people. There really isn’t any reason those type of businesses shouldn’t be here.”

Downtown also is poised to add office space. Martin Moore, a partner in the group developing Downtown 2000, said the economic downturn has not caused his investors to back away from office plans.

The group plans to add between 25,000 and 45,000 square feet of office space in the 900 block of New Hampshire Street during the next 18 months, with the exact amount depending on whether a hotel chooses to locate in the block.

“We know that locally the office market has been a little bit soft, but we still think downtown office space is a great opportunity,” Moore said. ” We know of several companies who didn’t want to leave downtown but had to because there weren’t offices big enough for them.”

No long-term worries

Moore said he wasn’t too concerned about the perception Lawrence’s office market may have a glut because he said overbuilding is such an easy thing to do in a community like Lawrence.

“In this town nobody knows exactly how much office space the university is going to need,” Moore said. “They are the kind of entity that can take up a lot of space, or else they don’t. If you build office space on that kind of speculation, you can get burned a little bit.

“And the technology downturn both nationally and locally has been a factor. It is just a fact that a lot of people who had money don’t anymore.

“But people shouldn’t worry. The office space this community has will get absorbed. I’m not concerned about it being a long-term glut.”