A landlord's market.

• Author: Cutler, Debbie

The commercial real estate market is still tight, despite the recent completion of three large office building.

Despite three new large office buildings being built in the Anchorage area recently, office space is tight and rents are rising as the demand for office space is greater than the supply available.

Unlike most of the rest of the U.S., which is facing vacancy rates on office space as high as 25 percent, there is little mid-range-priced Class A, B or C space available. And no new spec buildings are expected to be constructed unless something major happens to the Alaska economy, like the opening of ANWR or the building of the gas pipeline, says real estate experts.

"In our portfolio we have about a million square feet of office space and we're not experiencing or expecting any vacancy for the foreseeable future," said Mark Rowley, leasing manager for Pacific Tower Properties Inc. "We don't have a single square foot of lease (space available) and we manage five high-rise Class A buildings and at least another 14 or 15 B to A- type buildings."

According to Kincaid & Riely LLC, which provides real estate appraisal and consulting services in Alaska, there was about a 5 percent vacancy rate in Anchorage during the fall of 2002. Much of the space that is available is high-end Class A space, something most businesses can't afford. In fact, for the first time since 1984, Class A vacancies are higher than Class B and Class C vacancies. Class A vacancies were at 6.4 percent and Class B and C vacancies at 3.3 percent during the fall 2002.

The three new office buildings that have been built recently are Arctic Slope Regional Corp. facilities, located on C Street and 40th Avenue; 2700 Gambell St., which houses Tesoro and URS; and 3000 C St.

The 2700 Gambell building was built in 2001 and offers 46,800-square-feet of office space. It is fully leased. Arctic Slope Regional Corp. and 3000 C St., both completed in 2002, had space available in late February, but rent for both buildings is higher than most buildings in the market.

The 3000 C St. building was finished last fall and is an 80,000-square-foot spec office, with 20,000 square feet available on each floor. About 30,000 square feet of space had been leased by early February. Rent goes for about $2.95 a square foot.

The Arctic Slope Regional Corp.'s 200,000-square-foot office building is owned by Centerpoint 1 LLC, which is affiliated with JL Properties of Anchorage. Arctic Slope has a master...