Feb. 20—EAU CLAIRE — Vacant spaces for businesses in Eau Claire continued to become harder to find last year, especially for industrial uses, according to a local developer's yearly report.

Eau Claire-based Commonweal Development released its analysis of the 2022 commercial real estate market in the Eau Claire area late last week, showing that vacancy rates declined last year.

"Commercial real estate fared well in 2022 despite continued construction cost inflation and rising interest rates," Stuart Schaefer, president of the company, stated in the report. "Given its regional strength and recent signs of growth, we believe the Eau Claire region will continue to prosper and the commercial real estate market will continue to perform well, primarily as a result of the regions' growth."

Vacancy rates in buildings intended for retail, office and industrial uses all went down during 2022.

The company's analysis pointed to industrial spaces as being particularly desirable with their vacancy rates reaching a scant 0.91% last year, down from 1.14% in 2021. And Commonweal Development does not expect demand for industrial space in Eau Claire to soften this year.

"Local industrial parks continue to fill and with the potential expansion of those areas along with the continued demand for industrial space, we believe the industrial sector to be the strongest sector in 2023," the report stated.

David Minor, president and CEO of the Eau Claire Area Chamber of Commerce, agreed that companies are still looking to move or expand here.

"We're still getting a strong influx of people looking to do both here," he said.

Office space occupancy in Eau Claire does not appear to have declined as a long-term side effect of the COVID-19 pandemic prompting a shift to more people working from home. There had been assumptions that remote working as a necessity and then becoming a benefit offered by employers would end up generally leaving more office space empty, but that isn't shown in Commonweal's report.

The vacancy rate for office space fell from 6% in 2021 down to 5.3% last year, according to the company's analysis.

Minor's take on that is bigger companies who own their buildings may still have employees working from home or coming to the office on rotating basis, but that has not closed their offices. And for small businesses that lease office space, remote working wasn't widespread enough to be a drag on building demand.

Commonweal noted in its report that more office space is planned this year, bucking the conception that the pandemic would permanently curtail demand for it.

"Despite predictions to the contrary, the office market has done well and spurred the construction of at least one Class A office building and a couple of medical office buildings planned for the Oakwood Hills area in 2023," the report stated.

Retail vacancies also declined in 2022, falling to 9.75% in the Eau Claire area from 10.63% the year before.

The report noted that there was little new retail construction last year after a surge in 2021. New restaurants and shops built last year were primarily in Altoona, including the city's River Prairie development.

Minor suspected the slowdown in construction for new retail space was partially influenced by a smaller pool of available workers for the service sector.

"People are just seeing it hard to find those employees," he said.

Uncertainty about hiring enough people to staff a new location could've held restaurateurs and retailers from expanding last year, Minor said.

But Commonweal Development forecast that things will pick up this year with locations for wholesale store Costco, grocer Menomonie Market Food Co-Op, restaurants including Chick-fil-A and Jersey Mikes, and dessert shop Crumbl Cookie all in the works.

The local developer's report includes Eau Claire, Altoona, Lake Hallie and the town of Washington. Vacancy rates are based on retail, general office and industrial properties that were available for occupancy at the end of 2022.

The report's statistics do not include apartment buildings, auto dealerships, hotels, bank branch offices, fast-food restaurants, public buildings, hospitals and self-storage buildings.