Archive for the 'Vacancy Rates' Category

As a result, rental vacancy rates are dropping and rental rates are increasing.  Read the entire article in today’s Burlington Free Press.

Looks like multi-family properties are where it’s at if you’re looking for a solid commercial property investment.  Check out a few of Redstone’s Multi-Family property listings below:

457 St. Paul Street, Burlington

389 Riverside Avenue, Burlington

105 Hyde Street, Burlington

86 Pearl Street, Essex Junction

373 Vine Street, Northfield

233 Main Street, Northfield

246-250 Main Street, St. Albans

7 Alden Place, Vergennes

83 Hickok Street, Winooski

45 West Street, Winooski

With over 12 million square feet (SF) of industrial space in Chittenden County, with Williston accounting for 3,578,000 SF alone, there is apt to be a decrease in growth in a down economy. In fact, with the removal of a 46,000 SF recycling facility and just 36,000 SF of new industrial space coming on the market, 2009 actually saw negative growth, an almost unheard of circumstance under normal market conditions. All in all, we have seen the vacancy rate move to 10.6%, up more than a percentage point from the end of 2009. Industrial vacancy rates can be much more volatile in comparison to other markets because of the way single vacancies of significant size (in square footage) have such an impact on the whole. To illustrate that point, only six separate vacancies, each in excess of 50,000 SF and most notably a 73,000 SF of industrial warehouse in Shelburne, account for nearly 40% of the total vacancy. However, signs are showing at least some of these gaps will be filled soon, as companies learn to adjust their spatial strategies to current and ongoing economic conditions.
Looking ahead, projections show approximately 285,000 SF of new industrial space hitting the market over the course of 2010, with the potential for even more starting toward the end of the year. Many of these projects are on hold, and an overwhelming 87% majority of them are planned for owner occupation, another clear sign of modest risk and conservative speculation strategies. This number is encouraging when compared to 2009 however, when 100% of new industrial development was owner occupied. While these numbers still aren’t strong, they certainly point toward encouraging movement forward, and hopefully a continued recovery in this sector.

The overall Chittenden County record breaking vacancies we experienced in 2009 of 12.3% have increased to 12.8% in 2010.

The suburban market has experience a slight improvement from 14.7 in 2009, downward to 14.2 in 2010.  Central Business District (CBD) of Burlington vacancy rate has increased.   I expect that trend to continue with Gallagher Flynn’s relocation from a 17,000 SF office building on College St. to Technology Park, So. Burlington.  Also in the works in the relocation of General Dynamics from 180,000 SF on Lake side Avenue to the IBM’s Williston campus.    I.C.V. is permitting a 24,000 office building Battery Street which may come on line in 2011.  Champlain College has broken ground on a 30,000 SF office/IT facility that it will occupy on Lakeside Avenue.  The pending occupancy of that building by Champlain College will create additional vacancies in the Burlington community.   Dealer.Com’s purchased the balance of 54,000 SF of Pine Street from Lake Champlain Chocolates.  Dealer.Com plans to further develop the space for more offices to accommodate their growing work force.

Parking costs, high property taxes and limited access to the Downtown continue to limit new development and in some cases motivate business to occupy office space in the suburbs.

Building activity in the suburb is limited as well.  There is an abundant inventory of new Class A office space available.  The absorption of that product has been limited in the last 12 months. 

Those who are building are benefiting from construction costs being 20-30% lower than three years ago and record low interest rates.

We predict stable rental rates in the CBD market, holding steady at $13-$17 per SF for Class A and $8-$13 per SF for Class B.

We believe the suburban market will continue to weaken as developers complete to fill empty buildings with limited demand.  The suburban market rental rates  will soften from there currently rates of:   Class A office $12-$16 per SF, and Class B $6-$12 per SF range.