WESTERN SNAPSHOT, JULY 2004

Fresno, California Office Market

Office development in Fresno has received a boost thanks to the federal government. The downtown area has experience new development to house IRS, DEA and INS offices. Also, a new federal courthouse was completed in Fresno’s central business district.

“The federal government continues to be the most prevalent tenant in [building and] absorbing Fresno office space, primarily in the downtown section of the city,” says Gary Mathias, president of NAI Commercial Pacific. “Law offices are also prime tenants with some leases in the 20,000-square-foot range.” For example, Dowling, Aaron & Keeler has leased 23,000 square feet at the Palm Bluffs Professional Center.

Premium Investment Corporation redeveloped the old Guarantee Savings & Loan building for the INS’s offices and Nashville, Tennessee-based Alex S. Palmer & Co. constructed a 195,000-square-foot office building at Broadway and Merced streets for the IRS. Meridian Property Company, Graham Development and Seven Hills Properties are office developers new to Fresno.

The more than 21 million-square-foot Fresno office market registered a vacancy of 7.8 percent. Government office space accounts for approximately 4 million square feet of the total. Lease rates for Class A office space range from $1.50 to $1.70 per square foot NNN.

The northern Fresno submarket, including the River Park and Herndon areas and nearby Clovis, California, is one to watch, says Mathias. Several small office parks — typically smaller, one-story facilities targeted at owner-users — have been developed on the north side of the city. Designed for larger corporate tenants, a few mid-rise structures in the 60,000- to 80,000-square-foot range have popped up in River Park.

“The new freeways in the Fresno-Clovis area are promoting office growth to locations once deemed too far out,” says Mathias. “The Fresno-Clovis area is hot due to its plentiful land and reasonable cost of living.”

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