Greater Reading Office Market Report – End of 1st Quarter 2015

Greater Reading Office Market Overview
1st Quarter 2015 Report
By Bryan Cole, SIOR

Suburban Overview

The Greater Reading Suburban Office Market ended the 1st quarter of 2015 with a vacancy rate for Class A Office buildings at 15.01% percent which includes existing and proposed sites.  The vacancy rate for only Existing Class A Office Buildings is 4.39%.  There were no changes in vacancy rates from the close of 2014, however it is an increase from the same period 2014.   The average rental rates remained unchanged at $17.50 – $22.50 per square foot Modified Gross, which is a decreases in the rates from the same period in 2014.

The Class B Suburban Office Market ended the 1st quarter of 2015 with a vacancy rate of 18.19% for existing and proposed sites.  The vacancy rate for only Existing Class B Office buildings is 15.98%.  This is a slight decrease in vacancy rates from end of year 2014, and it is larger increase from the same period in 2014.   The average rental rates remained unchanged at $12.50 – $15.50 per square foot Modified Gross from the End of 2014 to 1st quarter of 2015 and that is a larger decrease from the same period in 2014, when average rental rates were $12.50 – $17.50 per square foot.

And the Class C Suburban Office Market ended the 1st quarter 2015 with a vacancy rate of 14.28%, which is a slight decrease from the same period 2014.

The outlook for the office market sector going into the 2nd quarter of 2015 is very optimistic due to the high level of interest in the marketplace.  There are upwards of 80,000 sf. of deals in the marketplace.

Cap Rates for Investment grade office buildings remains low due to attractive financing.  The most important variables are length of leases, credit of tenant(s), type of lease, and type of asset (I.E. Single Tenant, Multi-Tenant, Medical, Back Office).

Overall activity continues to come from within the local marketplace.  The majority of the transactions taking place are companies that already call Greater Reading home.  However, most of these deals have resulted in larger footprints and longer commitments.

Downtown Overview

The Greater Reading Downtown Office Market ended the 1st quarter of 2015 with a vacancy rate for Class A Office buildings at 22.64%.  It was a slight increases in rates from the end of year 2014.  The average rental rates remained unchanged from 4th quarter 2014 thru 1st quarter 2015 at $11.00 per square foot Modified Gross to $14.50 per square foot Modified Gross.

The reason for the slight decrease in vacancy rates was due to the relocation and expansion of an existing downtown engineering firm.  The Class A market noticed a benefit of the expansion, however Class B space would see a slight increase due to the move.

The Class B Downtown Office Market ended the 1st quarter of 2015 with a vacancy rate of 21.68%.  This was a slight increase in vacancy rates from the end of 2014, and it was a large increase from the same period in 2014.  The average rental rates remained unchanged at $7.50 per square foot Modified Gross at the end of 2014 to $11.00 per square foot Modified Gross, this is similar to the rates from the same period 2014.

Overall Vacancy Rates for Class C buildings remained unchanged at 23.62%.

 

Check www.Bryan-Cole.com for a full and comprehensive Office Market Report.

 

By Bryan Cole, SIOR | NAI Keystone Commercial & Industrial, LLC

Office & Medical Specialist | www.Bryan-Cole.com

Subscribe at www.NAIKeystoneBlog.com

 

EOY14 Greater Reading Office Report by Bryan Cole

Greater Reading Office Reportby Bryan Cole

Suburban overview

The greater Reading suburban office market ended 2014 with a vacancy rate for Class A, or highest quality, office buildings at 15.01 percent, which includes existing and proposed sites. The vacancy rate for only existing Class A office buildings is 4.39 percent.

There were no changes in vacancy rates from the third quarter of 2014, but there was an increase in vacancy from the same period in 2013. The average rental rates remained unchanged at $17.50 to $22.50 per square foot modified gross, which is a decrease in the rates from the same period in 2013.

Deals of primary focus within the Class A building sector were the newly constructed National Penn Bank facility at 30 Commerce Drive in Spring Ridge and the two proposed office pad sites at 835 and 845 Berkshire Blvd., Wyomissing. Although the total square footage of the new National Penn Bank building was 48,000 square feet, it left three vacancies within the older, Class B office product in the Berks County marketplace. These spaces, with the exception of 30 Commerce Drive, remained vacant at the close of 2014.

The Class B suburban office market ended 2014 with a vacancy rate of 18.35 percent for existing and proposed sites. The vacancy rate for only existing Class B office buildings is 16.14 percent. This is a slight increase in vacancy rates from the third quarter of 2014 and a large increase from the same period in 2013. The average rental rates remained unchanged at $12.50 to $15.50 per square foot modified gross from the third quarter of 2014 to the fourth quarter of 2014, and that is a larger decrease from the same period in 2014, when average rental rates were $12.50 to $17.50 per square foot.

Deals of primary focus within the Class B building sector were two new leases: the 26,016-square-foot lease at 1125 Berkshire Blvd. in Wyomissing and the 16,000-square-foot lease at 2001 State Hill Road in Wyomissing. The activity level for second generation Class B space has slowed in the fourth quarter; however, this is typical toward the holiday months. The first and second quarter 2015 most likely will see an increase in activity.

There were multiple sales completed within the Class B office market, including the sale of 1001 Hill Ave., a 150,000-square-foot mixed-use facility in Wyomissing; a 30,000-square-foot multistory office building in Flying Hills; the former J.C. Ehrlich facility in Wyomissing; and a 25,000- square-foot retail building converted to medical in Exeter Township. All of the facilities described with exception of 1001 Hill Ave. were purchased by end users.

The Class C suburban office market of older properties in less desirable areas and in need of renovation ended 2014 with a vacancy rate of 14.92 percent, which is a slight decrease from the same period in 2013.

The outlook for the office market sector going into the first quarter of 2015 is continued optimism as activity levels continue to remain active.

Downtown overview

The greater Reading downtown office market ended 2014 with a vacancy rate for Class A office buildings at 23.25 percent. This was a complete reversal in rates, as it was a highly negative change in vacancy rates from the same period of 2013.

However, it was a steady third to fourth quarter in 2014. The average rental rates decreased slightly from the third quarter to the end of the fourth quarter of 2013 at $11 per square foot modified gross to $14.50 per square foot modified gross.

The reason for the large increases in vacancy rates was due to the sale of 401 Penn St. to I-Lead Charter School and the reintroduction of space to the market. Our initial understanding was that I-Lead would be leasing some of the space out, but nothing has been clearly defined.

The Class B downtown office market ended 2014 with a vacancy rate of 19.96 percent. This was a slight decrease in vacancy rates from the third quarter of 2014, and it was a large decrease from the same period in 2013. The average rental rates remained unchanged at $7.50 per square foot modified gross in the third quarter 2014 to $11 per square foot modified gross. This is similar to the rates from the same period in 2013.

Overall vacancy rates for Class C buildings rose to 23.62 percent. This was because of a few Class C tenants moving to higher-tier properties and various buildings that were previously tracked as Class B buildings being changed to Class C buildings because of a reevaluation of assets and conditions. n

Bryan Cole, SIOR is a real estate office and medical specialist for NAI Keystone Commercial & Industrial LLC.  The website is http://www.Bryan-Cole.com

 

The full Report can be seen at http://www.bryan-cole.com/current-office-report.html 

Former Reading Kubota in Leesport Sold

NAI Keystone’s Bryan Cole and Steve Willems handled the sale of the Former Reading Kubota property in Leesport PA for $1,250,000.00.  The property was bought by an end user who is expanding their local operations.  The original post for the property listing blog can be found at http://wp.me/px8VU-lL

Greater Reading Economic Partnership’s Pam Shupp and the team at GREP assisted in getting the deal across the finish line.  Check http://www.GreaterReading.com for local resources and contacts.

The property is a 20,886 sf. flex building with 14,886 in the main building and 6,000 sf. in the pole building.  Please contact us for additional information about this deal.

2014-09-23 11.56.39

 

Bryan Cole, SIOR

Bcole@naikeystone.com

NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

www.Bryan-Cole.com or www.WyomissingOfficeSpace.com

Direct +1 610 370 8502 |Main +1 610 779 1400 | Fax +1 610 779 1985

Blog | LinkedIn  | Twitter  | Main Website | Office Space Site

NAI’s Bryan Cole & Steve Willems complete 110,000 sf. lease

NAI Keystone’s Bryan Cole and Steve Willems recently completed a 110,000 sf. industrial lease at the StonePointe Center in Berks County.

The user is a logistics firm who originally occupied 42,000 sf. in Muhlenberg Township.

NAI Keystone is representing the ownership at StonePointe Center which has additional Industrial Space for Lease as well as up to 200,000 sf. of prime office space.

Additional Information can be found at http://www.OurStonePointeCenter.com

3Bryan Cole, SIOR

Bcole@naikeystone.com

NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

www.Bryan-Cole.com or www.WyomissingOfficeSpace.com

Direct +1 610 370 8502 |Main +1 610 779 1400 | Fax +1 610 779 1985

Blog | LinkedIn  | Twitter  | Main Website | Office Space Site

NAI’s Bryan Cole sells office building to Conrad Weiser School District

NAI Keystone’s Bryan Cole completes the sale of 404 S. Church Street in Robesonia PA.  The property was sold to the Conrad Weiser School District.

NAI represented the Seller in the Transaction.

If you are looking for a property to lease or purchase?  Check www.Bryan-Cole.com

2014-10-20 12.23.54

Bryan Cole, SIOR

Bcole@naikeystone.com

NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

www.Bryan-Cole.com or www.WyomissingOfficeSpace.com

Direct +1 610 370 8502 |Main +1 610 779 1400 | Fax +1 610 779 1985

Blog | LinkedIn  | Twitter  | Main Website | Office Space Site

NAI’s Bryan Cole completes sale to Humane Society of Berks

NAI Keystone’s Bryan Cole represented NRJ Tv Philadelphia in the sale of its facility at 1729 N. 11th Street.  NAI listed the property in September of 2014 and was under agreement with Humane Pennsylvania shortly thereafter and closed in January 2015.

2015-02-21_9-35-19

 

Bryan Cole, SIOR

Bcole@naikeystone.com

NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

www.Bryan-Cole.com or www.WyomissingOfficeSpace.com

Direct +1 610 370 8502 |Main +1 610 779 1400 | Fax +1 610 779 1985

Blog | LinkedIn  | Twitter  | Main Website | Office Space Site

NAI Keystone leases 24,000 sf. in Downtown Reading

NAI Keystone’s Steve Willems and Bryan Cole complete a 24,233 sf. lease at 201 Penn Street in downtown Reading to an engineering firm.  The entire 3rd floor of The Gateway Building was part of the transaction.

1 (6)

 

If you are still in the market for office space, don’t worry!  We have other space for lease.  Please visit www.Bryan-Cole.com 

 

Bryan Cole, SIOR

Bcole@naikeystone.com

NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

www.Bryan-Cole.com or www.WyomissingOfficeSpace.com

Direct +1 610 370 8502 |Main +1 610 779 1400 | Fax +1 610 779 1985

Blog | LinkedIn  | Twitter  | Main Website | Office Space Site