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The Vancouver, Wash., office market doesn’t always get a lot of attention, but it has a lot to offer – and it’s seeing some positive movement and development, especially in its downtown.

Clark County office vacancy was at 12.3 percent during the third quarter, down from 12.9 percent for the third quarter of 2011, according to CoStar Group. This is a significant improvement from highs of nearly 15 percent reached during 2009.

We’re seeing a clear downward trend in vacancy, and though we still consider this a tenant’s market, as vacancy falls we will gradually see rents increase and landlords gain leverage.

Leasing activity has improved this year over 2011. Some larger leases from notable tenants in recent months include Wilbur-Ellis, an agricultural products company, leasing 10,842 square feet at Columbia Shores and a company leasing about 15,000 square feet at Columbia Tech Center for its corporate headquarters.

Tenants are starting to feel more confident in the economy and their financials than at the height of the recession, but they are remaining cautious and taking a conservative approach to decisions that hold a long-term impact.

Many are waiting to make these decisions until after the November elections. The presidential election has been grabbing the most headlines, but there are also races for Washington’s governor and state and local positions.

So, why do office users choose Vancouver? One reason is that rents tend to be considerably lower there than in many other Portland-metro submarkets. Rents in Vancouver averaged $18.70 during the third quarter, according to CoStar Group, while rents in other suburbs can be significantly higher.

Local economic development groups like the Columbia River Economic Development Council, Identity Clark County and Greater Portland Inc. have done excellent work in highlighting the advantages – including tax incentives, port and rail access, an educated employee base and good quality of life – of Vancouver and Greater Portland. They’ve also focused on spotlighting business owners who are pleased they made the choice to come to the area.

There has been a flurry of announcements this year about companies choosing to open new offices or headquarters in Vancouver. Heritage Bank, for instance, will soon open its regional headquarters in downtown, at Vancouvercenter; it told The Columbian that its decision was partly impacted by proximity to the Fisher Investments campus and PeaceHealth’s headquarters. It expects these businesses to draw others in the finance and health care sectors.

Overall, we’ve seen increased interest and office leasing activity in downtown in 2012. Vacancy downtown is at 10.8 percent, below the overall Clark County average. Buildings like the Bank of America Financial Center, Vancouvercenter, the new City Hall and others have gained tenants and had others expand. We are also seeing new retail businesses that are supporting office users who appreciate restaurants and shops existing nearby. They’re also drawn by proximity to the freeway, airport and downtown Portland.

Downtown Vancouver has seen a transformation in the past few decades. The renewal of Esther Short Park in the 1990s paved the way for successful commercial and residential development. As a result, more events and attractions came downtown, including the Vancouver Farmers Market, outdoor concerts and the new library. In addition, Vancouver’s Downtown Association aids beautification efforts and organizes events that keep downtown full of activity year-round.

One of the most exciting long-term projects in downtown is the plan to eventually transform a former industrial site into a mixed-use development along the waterfront. The 35-acre site is expected to offer 1.25 million square feet of office and retail space, more than 3,000 residential units, a large public park, and new roads and railroad infrastructure. The development may produce 20,000 construction jobs and 2,500 permanent jobs.

Though the project is in its early stages and will take many years to complete, construction crews have been working on the rail portion. It’s exciting to see progress in a long underused area so close to the city’s center. It’s a fitting symbol of Vancouver’s growth and future.

Vice President Tamara Fuller specializes in Clark County office leasing and sales at NAI Norris, Beggs & Simpson. Contact her at 360-852-9624 or [email protected].

Senior real estate broker Doug Bartocci specializes in Clark County office leasing and sales at NAI Norris Beggs & Simpson. Contact him at 360-852-9621 or [email protected].