Sep. 24--CEDAR RAPIDS -- More than 90 percent of downtown Cedar Rapids office building owners are planning to restore their buildings to their preflood use, according to a new report by NAI/Iowa Realty Commercial.

In its annual report released Tuesday, the company said Corridor retail, warehouse and suburban office markets remain generally healthy despite the damage from last year's flood and the recession.

The flood in Cedar Rapids and Iowa City helped some markets, increasing occupancy of some warehouse and commercial office buildings, at least temporarily. Suburban Cedar Rapids office vacancy rates temporarily plunged to almost zero, and have stabilized at about 10 percent, the report said. Rental rates have remained steady for the last few years, according to the report.

One concern is the impact on the downtown office lease market of the collapse of Alliant Energy's steam-heating plant in the flood.

Expenses such as heat have been included in rent for many downtown office buildings, partly because Alliant steam heat was relatively inexpensive, said Kirk Hiland, NAI/Iowa Realty Commercial managing partner. But after installing new individual heating systems for each building, Hiland said, building owners may be forced to start billing tenants for heat.

The recession did not hammer retail occupancy levels in the Corridor as it did nationwide. Coral Ridge Mall and Lindale Mall remain almost fully leased, despite the bankruptcy of General Growth Properties, the owner of Coral Ridge.

Still, retail leasing and construction activity in the Corridor is at its lowest level in many years because of tight financial markets and sluggish consumer demand.

-- Contact the writer: (319) 398-8317 or david. dewitte@gazcomm.com

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