Leasing activity for industrial space in the Des Moines commercial real estate market remains sluggish, but it has created an opportunity for favorable deals for large tenants, says one local real estate agent.

Grubb & Ellis Co./Knight Frank officials say the industrial vacancy rate has stabilized nationwide at 9.5 percent, below the 13.7 percent level recorded in 1992 following the last recession. But Des Moines had a total market vacancy rate of 15.6 percent for the fourth quarter of 2002. Those were among some of the findings reported in the company’s latest analysis of market trends released last week.

Morey Knutsen, senior vice president of Grubb & Ellis, said there is more than 2 million square feet of big-box space on the Greater Des Moines market. Several large properties have been vacated by companies like SuperValu and R.R. Donnelly, which opened more than 1.6 million square feet on the market. The 556,000-square-foot-building in Urbandale that housed the SuperValu regional distribution center recently was purchased by Steve Hoyt, principal of Minneapolis-based Hoyt Properties, who plans to convert it for multi-tenant use.

“The problem is we have lot of large vacancies and not a lot of activity,” Knutsen said. “But on the positive side, for somebody who needs 100,000-square-feet of space, there is no shortage of opportunities.”

Knutsen said the ample supply of such spaces is driving lease rates down, creating a tenants’ market. He estimated that Des Moines’ vacancy rate is probably closer to 18 percent and he said he expects the trend to last for another year.

Des Moines’ vacancy rate for the last quarter of 2002 was significantly higher than those in neighboring markets. Kansas City weighed in at 7.6 percent, Omaha’s vacancy rate was 9.5 percent, and St. Louis’ was 9.8 percent.

However, Des Moines’ vacancy rates for warehouse-distribution and flex space were considerably lower than those found in other Midwest cities. In Des Moines, the vacancy rate for warehouse-distribution centers was 3.14 percent, while flex space had a 4.2 percent vacancy rate in the last quarter of 2002.