Office Vacancies Hit Highest Rate Since 1994

Someone should tell those cats that have been taking over abandoned homes that there are also plenty of empty offices waiting for them to frolick in — A new report says that there office vacancies in the first quarter of 2010 reached its highest level since Kurt Cobain was still alive.

According to the study by Reis, Inc., 17.2% of U.S. office space is unleased; it hasn’t been that bad in 16 years. It’s also a 2% increase from the same quarter last year.

But, say the folks behind the study, the high number of vacancies shouldn’t necessarily dampen hopes that the economy is recovering.

Says Reis’ director of research:

As labor markets stabilize, we expect occupancies and rents to require another 12 to 18 months before showing signs of improvement, given typical lags in commercial real estate… Even as occupancy continues to deteriorate, we’re observing signs of renewed leasing activity across different metros.

Not shockingly, Detroit was the real estate market with highest vacancy rate — 26.2%. Meanwhile, Washington, D.C., has the fewest empty offices with only a 10.4% vacancy rate.

Office vacancy rate hits 16-year high [Reuters]