Industrial vacancy rates climbed in the second quarter, with more than 760,000 square feet of speculative space being available and more than 1 million square feet under construction, according to second quarter reports from brokerage firms JLL and CBRE.

According to the CBRE report, the Des Moines industrial market had nearly 198,000 square feet of negative absorption, with 95% of that negative absorption being seen in the northeast and western suburbs.

The CBRE report showed the overall bulk modern warehouse and distribution vacancy rate increased to 16.5% in the second quarter, while lease rates increased 3.3% year over year.

The JLL report showed industrial vacancy rates rose to 6.2% in the second quarter, with more than 1.26 million square feet of space under construction.

JLL forecast that vacancy rates will fall as competition for space persists, with data centers and warehouse developers competing for space.

“While industrial starts have slowed down, it is anticipated vacancy rates will decrease during the second half of the year,” JLL analysts said in the report.

To view the industrial reports in their entirety click here:

CBRE Q2 industrial report

JLL Q2 industrial report

On the office side, vacancy rates ranged from 12.9% to 19%, according to second quarter reports from Cushman & Wakefield, CBRE and JLL.

JLL’s report showed vacancy rates ticking up to 18%, with a forecast for vacancy rates to continue rising in the second half of 2024. The report showed a negative net absorption of nearly 1.4 million square feet year to date, with more than 37,000 square feet under construction.

“To remain competitive, tenants and office occupiers will persist in considering upgrades for their spaces,” JLL said in the report.

Cushman & Wakefield reported an office vacancy rate of 19% in the second quarter, with 265,000 square feet of negative net absorption.

“It isn’t typical that an absorption number of negative 265,000 square feet of space might be seen as a good thing,” the Cushman & Wakefield report read. “However, in this case, that absorption number is greater than the quarter 1 number by nearly 200,000 square feet of space. Within the last five quarters, the Des Moines market has seen significant blocks of space get brought to the market as a result of announcements made in late 2022 and early 2023. Barring any new announcements, the Des Moines office market has made it through that storm. Thus, any significant leasing activity seen in the upcoming quarters will likely cause the market to show positive absorption.”

CBRE reported office vacancy rates of 12.4% with overall net absorption of more than 186,000 square feet. The Central Business District accounted for more than 60% of that positive absorption, the report said.

To read the quarterly office reports in their entirety, click here:

JLL Q2 office report

Cushman & Wakefield Q2 office report

CBRE Q2 office report