Office Space News
Des Moines Office Space Emptying Fast
Published July 16th, 2010 by Jennifer LeClaire
When a company like Wells Fargo Financial decides to shutter its office space in your downtown, it hurts. But Wells Fargo isn’t the only company leaving the downtown Des Moines area. In fact, Des Moines office space is clearing out at break neck speed thanks to companies relocating.
This is having more than a ripple effect. It’s causing some buildings to nearly go bankrupt. Namely the Equitable Building and the Hub Tower. Both buildings are now in foreclosure. Meanwhile, the Younkers and YWAC buildings are nearly completely dark. The office market is Des Moines is expected to continue suffering through 2011.
With large blocks—almost whole buildings in some cases—of office space in Des Moines sitting empty there are some good deals to be had. But I’m not sure if serviced office space providers are even willing to take the risk here. Although commercial real estate agents and economic development officials are working hard to breathe life back into downtown Des Moines, it’s not likely to happen overnight. Any executive office suites company looking for a steal would have to be willing to wait out a potentially long period without much, if any, revenue.
I decided to take a look at the market for serviced office space in Des Moines. Here’s what I found:
- Court Avenue Business Suites
- Ingersoll Business Suites
- West Towers Executive Offices
- East Village Office Suites
- Foxboro Conference Center
- Regus
That’s not much of a showing. You know when Regus only has one location in a city, it’s not the pique of metropolitan business. Regus’ office space there is in the West Glen Town Center, a mixed-use property in the heart of West Des Moines. West Glen is located at the forefront of the Mills Civic Parkway corridor in West Des Moines. Clearly, this is not downtown.
A Regus competitor, Court Avenue Business Suites, is in a historic district of downtown Des Moines. So is Ingersoll Business Suites. This is one market where serviced office facilities may actually be somewhat at a disadvantage because they can’t compete on price as aggressively. Traditional landlords are probably willing to do very attractive terms on short-term leases just to get the occupancy up.
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Elizabeth Sanchez July 16th, 2010 at 7:10 am
Ouch. Talk about a suffering office market. Des Moines takes the cake. The city needs to do something fast to revive its downtown. I’m not sure if it’s macroeconomic problems or overreliance on the financial services industry or what’s going on with the office space there, but it sounds bad. I bet even the executive office suites facilities operators are suffering.
Bill Brookshire July 16th, 2010 at 7:26 am
To top it all off, I just read an AP report about a fire knocking out all the power in Downtown Des Moines. So now the buildings really are dark! There’s some reason why companies are leaving their downtown Des Moines office space. It’s probably the economy. I am sure landlords would be happy to renegotiate lower rates, and I am sure they tried, but apparently it didn’t work. I’m sorry for Des Moines office landlords.