Will RI’s Commercial Real Estate Market Rebound in 2013
Friday, January 18, 2013
The recovery of the RI commercial real estate market is in progress - that was the message put forth at CBRE's Rhode Island Market Overview.
Three significant messages were presented by a series of top regional CBRE experts.
First, the Boston market is on fire. It is growing and rents are improving. Average asking rents increased in downtown Boston, reaching $42.97 per rentable square foot. Much of this growth can be attributed to the 20%+ rent growth in the Seaport District over the last 18 months, according to CBRE.
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Third, the Rhode Island commercial real estate market is showing signs of a slow recovery. Class A space in Providence had a strong year in 2012, but faces challenges with the loss of Bank of America to the Superman Building on Westminster Street.
The Numbers
The Downtown Office market ended 2012 with a vacancy rate of 16.02%, slightly higher than the 15.9% at the end of 2011. There was significant positive absorption in the Class A sector, leading to the lowest Class A vacancy rate in nearly a decade. The vacancy left by a large tenant default has brought 104,316 square feet back on line and contributed to an increase in Class B vacancy.
Alden Anderson, Senior Vice President of CBRE, pointed out the the Rhode Island market is showing signs of improvement across most of the sub-markets although there are still challenges to the recovery - job growth and investment.
