TRI-CITIES—Vacancies Up as Prospective Tenants Weigh Their Options

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The decline of the dot-com sector, rising utility costs and a general sense of economic uncertainty hit the Tri-Cities market hard in the first quarter, with vacancy rates climbing in all pockets.

And while there are deals in the market, real estate professionals said, they are taking longer to consummate, as prospective tenants mull over space options and costs.

Some of the biggest vacancies were created by consolidations at Idealab, which pulled out of about 80,000 square feet, and IndyMac Bancorp Inc., which left 40,000 square feet at 155 N. Lake Ave.

Despite the softening, the Tri-Cities market saw its average monthly asking rent inch up from $2.41 per square foot in the fourth quarter to $2.44 in the first quarter. That’s down, however, from $2.52 a year ago, according to Grubb & Ellis Co.

The Tri-Cities office vacancy rate rose from 7.6 percent at the end of 2000 to 10 percent by the end of March, slightly higher than the 9.6 percent recorded in the opening quarter of 2000.

Burbank continued to see declining rents and increasing vacancies. That submarket’s average monthly asking rent dropped from $2.77 per square foot in the fourth quarter to $2.62 in the first, down from the year-earlier rate of $2.80. The vacancy rate in what had been a tight market nearly doubled from 3.9 percent at year-end 2000 to 7.7 percent in the first quarter.

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