With Bellingham fully reopening, there’s good and bad news about property vacancies
As Whatcom County continues to reopen this summer from COVID closures, commercial property vacancy rates in Bellingham are a bit of a mixed bag.
Business closures led to slightly more retail space available at the end of June compared to the end of March and a decrease in available office space for the same period. Industrial space remains difficult to get in the city, according to a new report by Ryan Martin, co-owner and broker at Bellingham’s Pacific Continental Realty.
Martin reported that a significant drop in tenants at Bellis Fair mall helped bump up the overall vacancy rate in the second quarter, rising to 16% in that part of the city. The vacancy rate also rose slightly in the downtown area from 7.1% to 7.4%
The overall retail vacancy rate was 3.9%, up from 3.7% in the first quarter, according to the report. With more retail space available, the average asking rate per square foot dropped from $19.36 to $18.50.
The end of the second quarter also coincides with the reopening of Washington state from COVID-19 pandemic closures. That could lead to retail space changes, particularly as restaurants are now back to full capacity. Demand is expected to be strong for the restaurants that survived the pandemic restrictions, potentially a boom in the coming months, said Anthony Anton, president and CEO of the Washington Hospitality Association.
There could be some challenges to meet that demand as restaurants scramble to find enough workers to handle being at full capacity. If labor issues are resolved there could be a flurry of new restaurants filling empty spaces.
“It might not be until September before we get a real sense of where we are at,” Anton said in a news conference when Washington reopened on Wednesday, June 30.
With more workers returning to the office, demand for space appears to be back. Of the 4.4 million square feet of office space in Bellingham, only 3.8% was vacant at the end of June, down from 4.4% at the end of March. With fewer spaces available, the average asking rate rose from $18.94 per square foot in the first quarter to $19.48 in the second quarter.
Industrial space, which includes warehouses, continues to be in short supply in Bellingham. Less than 1% of all the industrial space was vacant at the end of June. If the rate remains this low, it could force manufacturers and other related businesses to look outside the local market for space, Martin said.
