Archive for the 'Real Estate Development' 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.

Redstone recently accepted a Smart Growth Award from an organization doing important work across the state called Smart Growth Vermont.  So, what is Smart Growth?

According to the Smart Growth Network, the Principles of Smart Growth include:

• Creating a range of housing options and choices, providing quality housing for people of all income levels;
• Creating walk-able neighborhoods;
• Encouraging community and stakeholder collaboration in growth decisions;
• Fostering distinctive, attractive communities with a strong sense of place;
• Making development decisions predictable, fair and cost effective;
• Mixing land uses;
• Preserving open space, farmland, natural beauty and critical environmental areas;
• Providing a variety of transportation choices;
• Strengthening and directing development towards existing communities;
• Taking advantage of compact building design.

http://www.smartgrowth.org/about/principles/default.asp

From Smart Growth Vermont

“How individual communities plan for and manage land use and development will determine Vermont’s economic, social and environmental well-being.  The state’s distinctive sense of place is largely the result of its cultural and economic heritage. This heritage created, and maintained, the state’s historic landscape of compact cities and villages surrounded by working farms and forests. Unfortunately, this landscape is being incrementally lost to a pattern of unplanned, inefficient development.  The result is that our farms, forests and opens spaces are being replaced by strip malls and residential subdivisions scattered far outside of our traditional centers.

At Smart Growth Vermont, we believe that for Vermont to grow and thrive we need to carefully integrate growth, environmental protection and economic opportunities into our local planning framework.  This will require the participation of citizens, local and state officials, developers, business leaders and non-profit organizations.  Our future depends on careful analysis, dialogue, cooperation and leadership.”

http://www.smartgrowthvermont.org/learn/

At Redstone we believe strongly that Vermont’s historic settlement pattern and sense of place are essential elements to the quality of life we all enjoy and the continued success of our state.  We focus our development efforts in villages and downtowns; we rehabilitate historic structures; we re-purpose pre-existing buildings; and we build new buildings in infill locations.  We’re proud to be the recipients of two awards from Smart Growth Vermont for our Marble Works Residences project in 2007 and this year for the initial phases of the BankNorth Block redevelopment.  In both cases, we had a number of project partners involved and could not have achieved success without tremendous collaboration.

The redevelopment of the BankNorth Block is a prime example of Smart Growth at work in Vermont.  Burlington presents our state’s greatest smart growth opportunities as well as its greatest challenges with incredibly high demand for residential and commercial space; very little developable land; and tight urban sites to work with.  Smart Growth in Burlington requires a collaborative approach bringing the private, public and non-profit sectors together to achieve success.  Along with our project partners Housing Vermont, Champlain Housing Trust, Farrell Real Estate and Mary Farrell, we’re pleased to accept this award for the initial phases of the BankNorth Block redevelopment; we hope that Smart Growth advocates statewide will be supportive of the final phases of this dynamic urban infill and adaptive reuse project.

http://www.smartgrowthvermont.org/help/awards09/awards07/

http://www.smartgrowthvermont.org/help/awards09/2009smartgrowthawards/

What is Green Building?  According to the Vermont Green Building Network http://www.vgbn.org “Buildings have a tremendous impact on the environment–both during construction and through their operation.  Green building is a loosely defined collection of land-use, building design, construction, and operational strategies that reduce these environmental impacts. Green building practices offer an opportunity to create environmentally sound and resource-efficient buildings by using an integrated approach to design: architects, engineers, land planners, building owners and operators, and constructors get together and design the building by looking for cooperative or advantageous relationships between parts of the project.”
 
At Redstone we believe Green Building starts with selecting the right site.  Many of our projects involve reusing existing buildings and focusing investment in Vermont’s downtowns and village centers.  Working in locations with a variety of compatible uses and transportation alternatives results in fewer single occupancy vehicle miles traveled by building occupants.  After site selection, using high quality materials that will last long term, are sourced locally when possible, and do not contain harmful chemicals is critical.  Additionally, designing mechanical and electrical systems that perform efficiently reduces energy consumption and lowers a building’s carbon footprint.
 
There are a variety of excellent sources for additional information on Green Building topics and techniques.  In addition to the Vermont Green Building Network, a couple of my favorites are Environmental Building News (based in Brattleboro) http://www.buildinggreen.com/ and the U.S. Green Building Council http://www.usgbc.org/ 

One of Redstone’s primary lines of business is real estate development.  We often get asked, “What is real estate development?”  The answer isn’t simple.  Real estate development is a complex business ranging from renovating existing buildings to improving raw land.  Many developers specialize in a particular market segment such as office development, industrial development, retail development, single family home building or multi-family development.  Some developers specialize further within these practice areas by focusing on suburban office parks, urban high rise office buildings, luxury homes, condominiums, apartments, shopping centers, historic rehabilitation, etc.  Generally, developers coordinate all of the activities involved in real estate development from concept to completion.  These activities include site identification; due diligence prior to acquisition; managing design consultants; navigating the public approvals process (also referred to as securing entitlements); coordinating construction; facilitating the legal structure to create investment partnerships and prepare real property for sale or lease; securing investment capital in the form of both debt and equity; and a myriad of other activities.  Some developers act as there own construction manager or general contractor while others rely on third party construction companies.  Real estate development requires patience, perseverance and expertise in a constantly changing environment.