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Sonoma County has many big buildings, few big businesses, creating a glut of office space that experts say may last awhile

  • Susan Thompson is the controller of Pisenti & Brinker, LLP, which rents a high quality office space in the Fountaingrove area owned by Basin Street Properties.

Sonoma County has plenty of big office buildings, built to suit the high-tech companies that once filled them.

But given today's economic climate, in which 85 percent of the county's businesses have 15 or fewer employees, finding tenants for them has become increasingly difficult.

Nearly a quarter of the county's office space is now vacant, a condition Moody's Economy.com recently described as "an enormous glut." And leasing experts predict that demand will remain sluggish for the next few years.

"It's bouncing along the bottom, which is really what you're saying about the economy overall," says Al Coppin, president of Keegan & Coppin, the North Bay's largest commercial real estate company.

His firm's vacancy rate estimates vary by location, from about 16 percent in Santa Rosa, Windsor and Healdsburg, to 40 percent in Rohnert Park and Petaluma.

Coppin said the market won't change much until businesses start hiring more workers and then seek new space to house them. Even then, much of the space now vacant will be too big to attract the new tenants.

"You have a building that doesn't work any more for the market," said Matt White, president and CEO of Reno's Basin Street Properties, a commercial real estate owner and developer in Sonoma County.

The county's office vacancy rate ended the first quarter at 24 percent, according to Keegan & Coppin. The rate has risen almost every quarter since at least the summer of 2007, when it stood at nearly 17 percent.

Forty percent of Petaluma's 3.2 million-square-foot supply -- 1.2 million square feet -- were vacant at the end of March.

By comparison, Sonoma County has 13.8 million square feet of office space, 3.4 million square feet of it vacant.


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