The N&O's Jack Hagel follows up on his revelation last week that the law offices of James Scott Farrin would move to Ambacco's Diamond View II with a nice little statistical reveal about downtown Durham's office-market health in today's paper:
Overall, the Triangle's office vacancy rate hit a four-year high of 15.4 percent at the end of March.
Downtown Durham's office vacancy rate was 10.8 percent at the end of March, down from 16.1 percent a year earlier, Karnes Research data show. That's the biggest drop for any submarket in the Triangle during the year. In other words, no other corner of the region filled offices as quickly.
He goes on to note that Farrin's firm saw downtown Durham as advantageous as a "destination location" that would be attractive to clients coming in for mediation, a deposition, attorney meetings, and so forth -- a nod to the entertainment and dining options available in the resurgent downtown.
As Hagel notes, the March occupancy rates don't reflect the arrival of Farrin, whose perching in downtown Durham helps to fill Diamond View II. The improvement almost certainly reflects the arrival of Duke's DCRI unit in the Durham Centre, a move that turned the glass tower from a fire-sale investment to a pretty stable class A property for Craig Davis.
The numbers on occupancy are very good to hear indeed, especially for those anxiously watching for more signs of movement on the Greenfire city center project unveiled this past weekend, or on Scientific Properties' proposed Van Alen building at the now-closed Johnson Chrysler dealership between Roxboro and Mangum near the freeway.
Or, for that matter, Diamond View III -- the final build-out of commercial space in this phase of American Tobacco, and a project which Capitol Broadcasting CEO Jim Goodmon mentioned at Tuesday's Farrin announcement, promising it would be getting focused attention from the broadcaster-turned-developer for pre-leasing.
Of course, a healthy leasing market is only one of the preconditions for getting new construction underway. Also needed: debt markets and banks willing and able to lend, and equity investors willing to help meet today's higher loan-to-value ratios required.
Still, all the financing in the world doesn't make a difference if you don't have the demand for the space in the first place.
This is great news for downtown. Increased occupancy will help to drive both new development and the infill of smaller spaces for retail and restaurants.
And all of these things that put more feet on the ground downtown daily also help to make rail transit more feasable, which would lessen the need for parking decks all over the place.
Posted by: Todd P. | June 25, 2009 at 10:35 AM