Downtown retail vacancy rate drops in 2012 as new projects begin
As downtown Lawrence gets ready for a major year of construction, it already has had a bounce-back year, according to a new report released Thursday.
Retail vacancy rates in downtown fell to 4.4 percent at the end of 2012, according to a new survey from the Lawrence commercial real estate office of Colliers International. Last year at this time, the survey found downtown had a vacancy rate of 7.4 percent after several high-profile closings.
“Last year everybody thought the sky was falling in downtown,” said Kelvin Heck, a broker with the Lawrence Colliers office.
But Heck speculates that several pending multimillion-dollar projects — including a new hotel building at Ninth and New Hampshire and a $19 million expansion of the Lawrence Public Library — have caused businesses to take another look at the downtown area. The fact that the completed 901 Building — a multistory apartment and office building at Ninth and New Hampshire — is fully leased also has spurred confidence.
“The amount of housing that is being added in downtown is catching people’s attention,” Heck said. “I think it is still very clear that when people come to visit Lawrence, downtown is still the place that they are going to end up.”
The city’s overall retail vacancy rate, however, did inch up in 2012, rising to 5.4 percent, up from 4.5 percent. But the survey found almost all of that increase was attributable to the closing of the Sears store on South Iowa Street. The South Iowa Street corridor had a retail vacancy rate of 7.5 percent, and the East 23rd Street corridor had a vacancy rate of 8.2 percent. All other areas of town had vacancy rates below 5 percent. The national retail vacancy rate is about 7 percent and the Kansas City area retail vacancy rate is about 9 percent.
Other figures from the report include:
• The city’s industrial vacancy rate increased to 8.3 percent in 2012, up from about 6 percent in 2011. Much of the space is the former E&E Display Group building on Haskell Avenue, which was vacated recently when Berry Plastics moved into its new warehouse facility. The national industrial vacancy rate is about 10 percent, while the Kansas City area rate is about 7 percent.
• Lawrence’s office vacancy rate dropped to 9.7 percent, its lowest level since the fall of 2001. The rate was at 10.6 percent a year ago. The national rate is about 12 percent and the Kansas City rate is about 13 percent.