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Monday, September 16, 2019
   
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Commercial Real Estate

Savannah Office Market Survey Mid Year 2009 Released

Commercial brokerage company Mulaver/Mouchet’s respected survey of Savannah office space availability was released recently, a mid-year look at projects in the works and commercial office space vacancy rates.
The survey divides the Savannah office market into three submarkets, the Westside, Southside and Central Business District (“CBD”) which includes the Historic District, the Victorian District, Hutchinson Island and the areas within immediate proximity of those District.
The vacancy rate factor for the CBD is at 24 percent; the Southside is at a staggering 31 percent; and the Westside is at 19 percent. 
“Savannah is experiencing the same downturn in the local economy that is gripping the nation. This downturn is having a significant effect on the Savannah Office Market.  Due to the lack of corporate expansions and many companies experiencing downsizing, the office market is showing increased vacancies,” according to Rhett Mouchet, broker in charge of the company, and author of the report.
While there are high levels of vacancies occurring in all sectors, the newer buildings with higher rental rates are experiencing higher levels of vacancy.  The report also calls attention to buildings that have highly inefficient floor plans or in need of upgrading, as having higher vacancy rates, as well.
There have been no announcements of new spec buildings in the CBD and only the new building built recently is by the Savannah Land Company on Stephenson Ave. on the Southside. That building has achieved approximately a 50 percent lease rate prior to completion.  Wells Fargo Securities and First National Bank are the first tenants. 
And the report goes on to say that there will probably not be any new construction announced until several buildings on the Westside are closer to 95 percent occupancy, and financial options improve. 
“There is also a higher degree of vacancy on Savannah’s Southside for the first time in several years. The Southside vacancy rate is probably the best indicator of the overall Savannah corporate business economy, according to Mouchet.
The Savannah River Landing project, a mixed-use project containing retail, office, residential and hospitality within an approximate 40-acre development along the Savannah waterfront, will not see any action until there is a higher level of pre-construction leasing in place.
“There are no “best guess” estimates in this report for ‘09, but indications point to a negative, if not stagnant, market,” the report states.
As to the properties reviewed for the survey, the“ buildings that are primarily owner-occupied were not taken into consideration unless there was a future speculative use for a major portion of the space. These buildings include the Hunter Maclean Law Firm building with approximately 50,000 square feet and also the DeSoto Building which comprises mainly residential condominiums. Office condominiums and buildings under 10,000 square feet on the Westside and Southside of Savannah were also not taken into consideration,” the report explains.
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