Downtown Office Vacancy at Record High

If you take a stroll downtown in Fort Wayne, its hard not to notice signs in office windows, especially the red or white ones with the words “FOR RENT” on them. “Over time theres kind of been a general migration that not as many firms have to be downtown” says Steve Zacher, President of the Zacher Company. Recently the Zacher Company did a survey of all available downtown office space. The percentage vacant was a record high. Zacher says the vacancy rate is “a historic high.” Tim Rietdorf of Murphy & Associates says that it’s “probably the highest vacancy rate Ive seen in the 25 years in the business.” Over 3-million square feet of office space is available downtown. Currently about 639-thousand of that is not being used; that leaves about a 19-percent vacancy rate. “Convenience...people want to work near their homes and not want to pay for parking” adds Zacher. The high vacancy rate is certainly good for tenants, but not so much for landlords. Zacher says “with a very high vacancy its very hard for landlords to fill their space or maintain their rent.” With the scales tipped towards the tenants, landlords are faced with requests for things like free rent and free parking, to name a few. “They want lower rent, they want short term leases…”says Rietdorf. But thanks to The City of Fort Wayne, the market might head in a whole new direction. “Having the city purchase the Renaissance building will help tip the benefit a little bit towards landlords” says Zacher. Renaissance Square is nearly 220-thousand square feet. The purchase by the city itself would alone reduce the vacancy rate to nearly 12-percent. This lower rate would then shift the market in the favor of landlords. There are still a lot of questions concerning the acquisition of Renaissance Square such as a move-in date.