BELLINGHAM, WA (MyBellinghamNow.com) – Vacancies rose in downtown Bellingham over the summer despite the demand for retail space staying steady throughout the rest of the city.

That’s according to a new report on third quarter commercial real estate by Pacific Continental Realty co-owner Ryan Martin. He says retail space vacancies in Bellingham fell slightly from the previous quarter, reflecting a positive market for both buyers and retailers.

Businesses near Meridian saw the highest demand for retail space, while the Bellis Fair mall stayed stable. However, downtown Bellingham’s retail vacancy rate sat at 8.4%, nearly three times the citywide average.

Martin says a prominent homeless shelter’s transition to a new facility likely impacted downtown’s vacancy numbers.

“The largest impact is probably that the Lighthouse Mission is still downtown, I know they opened a new one,” Martin said. “It takes time for people to move and vacate.”

Meanwhile, while demand for office space showed positive signs by rising throughout the city, downtown struggled and even lowered asking rates in a possible effort to attract tenants.

Martin says the Federal Reserve’s recent rate cut should be a good sign for local real estate markets like downtown going forward.