The figures contained herein focus on all CBD office buildings. Non-competitive hospital-owned properties, radio/television-occupied properties and existing buildings being converted to multifamily housing do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis.
CENTRAL BUSINESS DISTRICT (CBD) OFFICE
Analysis
Market Overview
The CBD office market consists of approximately 3,400,000 SF. Entering 2022, the vacancy rate was 12.65% which increased throughout 2022, ending at 14.03%.
The average asking rental rate is $10.03/SF NNN, increasing from $8.47 at the beginning of the year.
The CBD office market saw substantial activity in 2022 — downtown staple, Principal, exited for a suburban location, the former Guaranty Bank adaptive reuse opportunity went sale pending, the Witwer Building sold to Foundation 2 and the Higley Building was listed for sale.
Looking Ahead
Expect a continued increase in vacancy especially as large corporate tenants finalize remote/work-from-home policies. Employers and landlords, especially in the CBD, should begin to focus on the human element and transition space to serve a more collaborative purpose in order to attract and retain employees.
Significant transactions announced, in progress, completed or traded
- 101 1st Ave. SE, Cedar Rapids — UFG-owned Rush Nicholson Building — 27,186 SF on 0.325 acres sold to the City of Cedar Rapids for $2,500,000
- 305 2nd Ave. SE, Cedar Rapids — Witwer Building — 40,000 SF on 0.41 acres, one-half leased and one-half vacant sold for $1,484,000
- 222 3rd St. SE, Cedar Rapids — former Guaranty Bank Building, World Theater, Dragon Restaurant & parking lot — a 101,302 SF adaptive reuse opportunity listed for $3,100,000 — currently SALE PENDING
- 116/118 3rd Ave. SE, Cedar Rapids — Higley Building — 53,706 SF on 0.19 acres partially-leased investment property listed for sale at $2,150,000
- 200 2nd Ave. SE, Cedar Rapids — former Principal Financial — 67,000 SF on 0.39 acres vacant building listed for lease or sale for $3,600,000
- 512 3rd Ave. SE, Cedar Rapids — former Gazette Office — 16,800 SF on 0.96 acres vacant building listed for sale for $2,860,000 — currently LEASE PENDING
SUBURBAN OFFICE
Analysis
The figures contained herein focus on metro area office properties. CBD office and non-competitive owner-occupied medical buildings do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis.
Market Overview
The Cedar Rapids metro suburban office market consists of approximately 5,900,000 SF. Entering 2022, the vacancy rate was 8.06% which increased each quarter, ultimately doubling and ending the year at 17.57%.
The average asking rental rate is $10.83/SF NNN, decreasing slightly from $11.81 at the beginning of 2022.
The former Aegon/Transamerica Edgewood Road campus fell out of contract for the second time and was listed for sale via an online auction site, selling to an out-of-state owner during the third quarter for $7,020,000. The existing 201,165 SF office building was subsequently listed for sale and/or lease.
Looking Ahead
Corporations will continue to reduce overall square footage as they look for more flexible lease terms including expansion, contraction and pandemic clauses. Lease rates will gradually decline as additional space becomes available.
Significant transactions announced, in progress, completed or traded
- 218 4th Ave. SW, Cedar Rapids — former Lueck Label — 11,240 SF on 0.51 acres sold vacant for $1,725,000
- 4201 River Center Ct. NE, Cedar Rapids — former US Cellular Office — 15,876 SF on 1.91 acres sold vacant for $1,710,000
- 1900 1st Ave. NE, Cedar Rapids — former Western Fraternal Life — 15,334 SF on 2.26 acres sold vacant to Dunkin’ Donuts for $1,300,000
- 4050 River Center Ct. NE, Cedar Rapids — former TATA Consultancy Services — 21,036 SF on 6.64 acres sold vacant for $2,645,000
- 3165 Edgewood Pkwy. SW, Cedar Rapids — former Purdue Global — 26,505 SF on 3.97 acres sold vacant for $2,800,000
- 929 Martha’s Way, Hiawatha — TATA Consultancy Services — 20,295 SF on 1.12 acres sold as an investment for $2,365,000
- 4050 River Ridge Dr. NE, Cedar Rapids — UnityPoint Children’s Specialty Services — 13,480 SF on 1.9 acres sold as an investment for $1,862,500
- 1025 Kirkwood Pkwy. SW, Cedar Rapids — Ruffalo Noel Levitz — 91,892 SF building on 13.97 acres listed for sale, partially occupied at $12,000,000
- 1 Parsons Dr., Hiawatha — GoDaddy Headquarters — 73,674 SF vacant building on 5.74 acres listed for sale at $8,430,720