Des Moines-area renters looking for relief from rising rent prices should zero in on downtown units.

Rents in the city's core have declined by 1.8 percent for a 1-bedroom, 4.7 percent for a 2-bedroom and 16 percent for a 3-bedroom unit, according to an annual survey released Tuesday by CBRE/Hubbell Commercial.

Declining rents downtown can be attributed to a sharp increase in new units — 2,500 over three years — resulting in vacancies not seen since 2010, said Cy Fox, vice president of CBRE/Hubbell Commercial.

Despite the dip, downtown still has the highest rents in the metro. The average 1-bedroom rents for $997 a month and the average 2-bedroom is $1,331.

To fill empty units, landlords are offering concessions as much as three months free rent and electronics such as TVs or iPads.

"It's hard to get rent growth when you're offering concessions," Fox said. "We're kind of in a supply-and-demand imbalance right now, but we expect it to correct itself."

Meanwhile, the suburbs are experiencing climbing rental rates as high as 9.2 percent for a 1-bedroom unit on the metro's west side. That area is seeing a surge of apartment development. Fifty-eight percent of the metro's new units will open there this year.

The average 1-bedroom in the western suburbs rents for $830 a month and the average 2-bedroom is $913.

"But there's light at the end of the tunnel," Fox said. Rents in the western suburbs should soften over the next few years as vacancy rates inevitably increase with new units coming, he said.

CBRE/Hubbell Commercial's survey serves as a benchmark for central Iowa's commercial real estate industry. It found high vacancy rates across all sectors — multifamily, retail, office and industrial space — as landlords react to unprecedented waves of new construction.

Here are six takeaways from the company's annual survey:

1. Apartment construction will slow soon

The metro's apartment building boom will continue this year, but then slow down until the supply and demand becomes more balanced.

About 1,418 market-rate units opened in 2018, compared to 3,138 units in 2017 and 1,966 in 2016, according to the CBRE report.

There are another 2,834 units planned this year. Most should open by the middle of 2019, giving way for a short pause through the end of the year, Fox said.

That likely won't last long, as the metro's fast-growing population and low unemployment rate will drive demand from new renters moving here, he said.

"There's still strong indicators going forward," Fox said.

2. Apartment vacancies are high

Because of the ongoing construction boom, vacancy rates are at their highest levels since 2010, when the country was in the middle of a recession.

Vacancies are at 8 percent across the metro, up from 6.7 percent in 2017.

Downtown and the western suburbs are seeing the largest vacancies at 10.3 percent and 9.4 percent, respectively. Both regions saw an increase from 2017.

►2018 survey: Des Moines renters could see relief as more vacancies slow rate increases

3. Office space will be slow to fill

Des Moines' traditionally stable office market is facing unique headwinds as companies are moving out of leased space and into owner-occupied buildings.

"It's pretty impressive how much large space we have available" for rent, said Harrison Kruse, senior associate at CBRE/Hubbell Commercial.

Vacancies are up 5.4 percent over 2017 and will remain that way until larger 50,000-square-foot to 100,000-square-foot spaces are back-filled. These holes were made after IMT Group, Holmes Murphy and Kum & Go built their own corporate campuses. Those three companies left vacancies totaling more than 200,000 square feet.

As a result, landlords will likely have to spend money improving their spaces to attract companies looking for more amenities to offer employees, Kruse said.

Landlords may have to invest in breaking up large spaces. Companies are dedicating less square footage per employee and are therefore looking for smaller spaces, he said.

They're averaging about 130-square-feet per employee in an open floor plan with fewer offices and more cubicles. Landlords would have to find a company with at least 400 employees to fill the space vacated by IMT Group, for example.

"It's going to take some time," Kruse said.

4. Mall vacancies are at new highs

Department store closures have put Des Moines' malls at vacancy rates not seen in decades. The metro's malls saw an 11.6 percent decrease in occupancy levels between 2018 and 2017, with the highest impact at Valley West Mall in West Des Moines.

Merle Hay Mall lost Sears and Younkers stores last year. Valley West Mall and Jordan Creek Town Center both lost Younkers stores.

Along that same line, big-box stores in the metro are vacant at unprecedented rates with the closures of K-Mart and Toys R Us, said Tyler Dingel, senior vice president at CBRE/Hubbell Commercial.

Cities may need to start investing in the redevelopment of big-box stores and malls to help fill space and revitalize those areas, he said.

"If cities want to see them be redeveloped and not be a warehouse, but be an amenity for the city, they're going to have to step in," Dingel said.

►More:Des Moines considers $4.8 million subsidy for Merle Hay Mall

5. 'Internet-proof' retail is booming

A shift to "internet-proof retail" that focuses on shopping experiences is beginning to show itself in the Des Moines metro, Dingel said.

According to the report, 84 percent of the 67 new retail leases in the western suburbs last year were restaurants or experience-related retailers, like Smash Park, the massive food and sports center that opened in West Des Moines last fall.

Developers are focusing on bringing that type of retail use to their centers to help keep consumers there for long periods, Dingel said. He expects to see that happen at local malls, too.

Merle Hay Mall is working on a master plan to bring more experiences to the shopping center, including upgrading its bowling alley and leasing space to a swim school.

6. Des Moines is attractive for distribution

Nearly 3 million square-feet of new industrial space is planned for 2019 as developers see increased demand from distributors looking to relocate here, said Marty Herrmann, vice president with CBRE/Hubbell Commercial.

He expects to see long-term growth in this sector, especially as companies look to provide more shipping fulfillment centers for online purchases. Des Moines' location at the intersection of Interstate highways 35 and 80 puts the metro in an ideal spot for quick shipment to consumers, he said.

"Anybody that's focused on over-the-road transportation has got to take a look at us," Herrmann said. "We're in a very desirable location."

New tenants are leasing about 1 million square feet of industrial space per year, according to CBRE.