Prudential Insurance Co.'s vacancy rate for its properties in the 12 western states is 7% compared with a range of 15% to 30% by others in the same markets, Craig E. Hobson, vice president, leasing and management, western region said in the firm's Realty Report.
The high vacancy factor in most urban areas presents formidable problems for undercapitalized owners, developers and lenders, Hobson said.
Hobson was optimistic about long-term prospects for the West and noted that new investment capital is coming in from the rest of America and from foreign countries, especially Japan.
The Prudential newsletter also reported that there are about 24 million square feet of space available in Los Angeles, with some experts estimating the vacancy rate as high as 18%. Space availability has increased about 2.8 million square feet over a year ago, and another 1.5 million square feet are expected to come on line within the next 12 months.