Office vacancy rates increased across the metro in the third quarter of 2024, with vacancy rates in the Central Business District climbing to as high as 22.3%, in part because of Wells Fargo moving out of its downtown buildings, according to quarterly office reports from brokerage firms that serve the metro.

JLL, CBRE and Cushman & Wakefield released their reports for the third quarter recently, analyzing the state of the office market in Central Iowa.

Here are the highlights from each firm’s report:

JLL

• Total Q3 vacancy was 18%.
• Year-to-date net absorption was -1,397,385 square feet.
• Overall direct asking rent was $22.88 per square foot, with asking rent for Class A space at $26.27 per square foot.
• More than 47,000 square feet of office was under construction.
• 26.1% was preleased.

According to the JLL report, the most substantial lease was by engineering company Foth, which secured 25,000 square feet in the renovated Carpenter building at 106 S.W. Seventh St., moving from a location in Johnston. The most notable sales transaction was at 4201 Corporate Drive in West Des Moines, where Kavi Ventures purchased the 30,700-square-foot building from Lifespace for $3.6 million.

In its report, JLL said several significant office tenants are looking for space to lease or buy in Des Moines.

“The market’s size and manageable commute times enable these tenants to consider both suburban and CBD locations,” the report read.

CBRE

• Overall vacancy was 16.5%, up from 13.2%, while vacancy in the Central Business District rose to 22.3%, up from 14% on the year.
• CBRE cited the move by Wells Fargo out of its downtown locations for the jump in CBD vacancy rates.
• Net absorption year to date was 1,161,804 square feet.
• Average asking lease rates in the CBD fell from $14.04 per square foot to $13.84 per square foot.
• Total leasing velocity totaled just under 150,000 square feet, a decrease from the second quarter.
• The Des Moines metro has nearly 230,000 square feet of sublease available, with the western suburbs accounting for 69% of that space.

Cushman & Wakefield

• Vacancy rates in the Des Moines market were 20% in Q3.
• Net absorption year to date was -714,000 square feet.
• Asking rent was $19.96, the third consecutive quarter that has increased.
• The average sales price of office space continues to rise to $168 per square foot, up from $152 per square foot in Q2 and $134 per square foot in Q1. Sales prices could drop with larger projects that will likely transact in the next two quarters but analysts said those projects “are outliers in terms of price per square foot.”
• Office redevelopments are continuing, specifically in downtown.