Spotlight: Iowa
known aS part of america’S heartland, iowa haS diverSified itS traditionally
agriculture-driven economy into other induStrieS, Such aS manufacturing, financial ServiceS and inSurance, proceSSing, and green energy.
Financial services and insurance has become the largest industry in the state, which was home to the
headquarters of 93 insurance companies in 2010. The industry contributed 13. 8 percent to Iowa’s gross
domestic product in ’ 10, making it the second-largest contributor to the GDP after manufacturing.
Iowa has seen signs of recovery from the Great Recession. Its economy grew at 3.1 percent in 2010 —
higher than the national growth rate of 2.6 percent. Its current-dollar GDP was $142.7 billion and ranked
30th in the United States in ’ 10, according the U.S. Bureau of Economic Analysis. Unemployment rates,
however, hovered around 6 percent in the past two years as employers remained reluctant to hire.
Des Moines, the state’s capital and home of several insurance-company headquarters, was in a state
of transition this past year. The high concentration of large occupiers provides stability to the office
market, however, according to CB Richard Ellis/Hubbell Commercial.
Office vacancy rates in the entire Des Moines metropolitan area were as high as 17. 9 percent in third-quarter ’ 11, according to Reis Inc.
DES MOINES METROPOLITAN APAR TMENT VACANCy RATE
Des Moines
Apartment Market
The Des Moines metropolitan apartment market has seen a steady increase in demand over the past few
years. Vacancy rates dropped to
a forecasted rate of 5. 8 percent in
2011 from 8. 3 percent in ’06, according to a survey by Commercial Appraisers of Iowa Inc. and CB Richard
Ellis/Hubbell Commercial.
Source: Commercial Appraisers of Iowa Inc. and CB Richard Ellis/Hubbell Commercial
In third-quarter ’ 11, vacancy rates
were at 3. 7 percent, according to
Reis Inc. Rents increased by 1.1 percent this past year, with an average rent of $715 per month, accord-
ing to the Des Moines Register. In addition, fewer concessions were offered in the Des Moines apart-
ment market this past year, and some condominium projects originally developed for owner-occupancy
entered the upper-end rental market, according to CB Richard Ellis/Hubbell Commercial.
Focus: Property-Tax Reform
The overhaul of commercial property taxes tops the state’s legislative agenda this year. Iowa’s commercial property is taxed on 100 percent of its assessed valuation, making the state the second-highest in
the nation for urban and rural commercial property taxes, according to the Office of the Governor of Iowa.
Gov. Terry Branstad submitted a proposal to this past fall’s legislative session to lower the tax gradually
to 60 percent over five years, which will cost the state nearly $250 million in that time frame, according
to the Office of the Governor of Iowa’s website. Gov. Branstad also proposed that new business ventures would get the 60 percent break immediately.
UNEMPLOyMENT RATES
Unemployment
Iowa’s unemployment rate has
steadily increased recently and
reached 6 percent this past October, up from 3. 9 percent in the same
month in 2007. Although it remains
below the national average of 9 percent, Iowa’s long-term unemployment rate, or those who have been
out of work for six months or more,
is 34 percent, nearly twice what it
was before the downturn began.
Because the state was less severely
hit by the housing crisis, losses in construction jobs were only 15 percent in Iowa, while the rest of the
nation lost 28 percent of construction jobs, according to a report by the Iowa Policy Project.
Source: U. S. Department of Labor
Rania Oteify is an associate editor at Scotsman Guide. Reach her at (800) 297-6061 or raniao@scotsmanguide.com.
CORALVILLE
Iowa River Landing, a 180-acre mixed-use development,
is being built on a former industrial site in Coralville. IRL
is home to a 250-room Marriott Hotel and Conference
Center. The completion of a 150,000-square-foot University of Iowa Health Care facility, a 95-room Homewood
Suites, and a 15,000-square-foot brewing manufacturer
is slated for this year. A Von Maur department store is
scheduled for completion in 2013.
Photo: Neuman Monson Architects
THE;EASTERN;IOWA;CORRIDOR
The region that encompasses Iowa City, Cedar Rapids,
Waterloo and Cedar Falls has been rebuilding itself
since a devastating flood in 2008. Projects valued at
a total of more than $1 billion will be ongoing over the
next 10 to 15 years. Cedar Rapids is rebuilding a new
convention complex downtown. When completed in
2013, it will become the second-largest convention and
events complex in the state.
UNIVERSIT Y;HEIGHTS
Photo: www.university-heights.org
This 1,000-resident town has been split over One Uni-
versity Place, a proposed mixed-use condominium and
commercial development. Some say it does not fit the
small community, but supporters say it will bring de-
velopment and a tax boost. This past November, City
Council elections seemed like a referendum on the proj-
ect and the majority of voters expressed opposition. At
press time, the project’s future is unclear.
WHAT;THE;LOCALS;SAY
“Iowa’s business climate is solid and positioned for
future growth. Construction and occupancy of new,
impressive office buildings has left a surplus of second-
generation office space available for lease. The com-
mercial real estate market is transitioning into a growth
cycle which will improve the absorption of this space.”
—;K YLE;GAMBLE,;SENIOR;VICE;PRESIDENT
AND;MANAGING;DIREC TOR,;CBRE/HUBBELL;COMMERCIAL
Sources: CB Richard Ellis/Hubbell Commercial, Cedar-Rapids.org, Commercial
Appraisers of Iowa Inc., Corridor Business Journal, www.corridorbusiness.com,
Des Moines Register, Eastern Io wa Government, The Gazette, Iowa Policy Project,
IowaRiverLanding.com, NAI Iowa Realty Commercial, Office of the Governor of Iowa,
Reis Inc., Reuters, U. S. Bureau of Economic Analysis, U. S. Department of Labor
