The conversion of office buildings into residential uses is taking competitive office space off of the market and shrinking the amount of space available to lease or buy, especially in Des Moines’ central business district, a local commercial real estate broker said.

“Three years from now, we could be looking at a pretty significantly different office supply downtown,” said Justin Lossner, senior managing director at JLL’s Des Moines office. “And, there’s not much new building going on right now, especially west or downtown.

“At the end of the day, I think the pond is shrinking,” Lossner said about the amount of office space in Des Moines’ central business district.

In September, Ruan Inc. announced that the 14-story Two Ruan Center at 601 Locust St. would be converted from office space to multifamily. Two Ruan Center has about 256,200 square feet of space, a large portion of which is vacant. Converting the space to a different use means less office space in the market as well as a decrease in vacant space.

Wells Fargo in March listed five downtown properties for sale, and Lossner said there has been some interest in converting at least one of the office buildings to multifamily.

In addition, the city of Des Moines plans on purchasing Nationwide’s former office building and parking garage at 100 Locust St. and 1300 Mulberry St., respectively. The city plans to consolidate office space as well as relocate the police headquarters to office building. The move will likely mean the redevelopment of the Argonne Armory building at 602 Robert D. Ray Drive and police station at 25 E. Court Ave.

“I don’t think those buildings will remain as offices,” Lossner said. “There will probably be opportunities to do some conversions and mixed-use [development].”

Converting office space to multifamily or other uses as well as filling vacant space will help shrink the amount of empty space downtown, Lossner said.

In the third quarter, 14.2% of the over 11 million square feet of downtown office space was vacant, according to JLL’s third-quarter office report. The vacancy rate was similar in the second quarter.

Overall, the Des Moines metro’s office vacancy rate was 14.4%, according to the report.

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