NAI Keystone Asset Management – Commerce Qtr. AD

Check out our New Ad in Commerce Quarterly Winter 2017 – http://www.KeystonePropertyMgmt.com

pm-ad-2017

 

Bryan E. Cole, SIOR | Principal

NAI Keystone Commercial & Industrial, LLC
875 Berkshire Blvd., Suite 102
Wyomissing, PA 19610
Bcole@naikeystone.com

www.Bryan-Cole.com or www.KeystonePropertyMgmt.com 

www.WyoOfficeSpace.com

New Website dedicated to Office Space for Sale or Lease in Wyomissing/Spring Township Berks County, Pennsylvania.

Bryan Cole of NAI Keystone has developed a website dedicated to the numerous properties being marketed in Wyomissing and Spring Township.

The site offers comps, market information, and property availability.  Below is a newly published Advertisement for the site.  Please visit www.WyoOfficeSpace.com and let us know what you think.

WyoOfficeSpace Ad

Bryan E. Cole,SIOR

NAI Keystone Commercial & Industrial, LLC

direct: 610-370-8502

Bcole@naikeystone.com

www.Bryan-Cole.com | 610 779 1400 (o) | 610 779 1985 (f)

NAI Keystone Closes on $31.5 Million Sale Deal

NAI Keystone Commercial & Industrial’s Steve Willems and Bryan Cole close on a $31.5 Million dollar sale of the Caterpillar Logistics distribution center located at 600 Memory Lane in York PA.  The facility was estimated at 1,150,000 sf. and was purchased by the tenant CAT Logistics.

The building was owned by an investment group in New Jersey which asked NAI Keystone to assist with completing the sale. caterpillar

For more information about the sale, please contact Steve or Bryan – Bcole@naikeystone.com

 

 

If you are looking to Lease or Sell a facility please give us a call; and allow us to utilize our network to save you time and money.

 

Don’t forget to visit www.Bryan-Cole.com or my clients/members site atwww.NAIKeystoneMembers.com

Bryan Cole | Sr. Associate

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

Large Lease Rollovers Pose Loan Risks in Era of the Shrinking Office

Article by Costar Group

New Focus On Efficiency Portends Slower Demand

The trend in less square footage requirement per employee has serious implications for landlords with near-term lease rollover risk, according to new analysis from Wells Fargo Securities.

Older existing office leases initially written in the era using the higher square footage requirement per employee are likely to renew under a more efficient standard.

Looking at tenant data backing commercial mortgage-backed securities offerings, Wells Fargo found roughly 15.1 million square feet of lease rollover in 2013, 20.2 million square feet in 2014, 23 million square feet in 2015 and 19.6 million in 2016 for leases larger than 100,000 square feet.


NAI’s Bryan Cole and his team can assist by providing Space Programming to help with verifying your space needs including estimated circulation area, common add-on factors, and typical size working areas.  This helps save money and time.  Medical, Back-Office, Governmental, Administrative… and much more.


The trend toward space efficiency has the potential to limit office demand over the next several years as tenants right-size into less square footage as leases roll the next several years.

According to CoreNet Global, the square footage per worker has already slipped from 225 square feet in 2010 to 176 in 2012, — a 20% reduction.

Given those gains in efficiency noted in the CoreNet survey and other anecdotal evidence, Wells Fargo decided to alert CMBS investors of loans with large lease rollover risk.3085621274_918b33b9c8

One example that came up in its search was the $150 million loan on the three-building James Center in Richmond, VA. The loan is pari passu with a $100 million piece in GMACC 2006- C1 accounting for 5.9% of the deal and a $50 million piece in GECMC 2006-C1.

McGuireWoods law firm is the top tenant in the three properties leasing approximately 215,000 square feet in the 430,000-square-foot One James Center with a lease expiration of August 2015.

This past January, Clayco, a national development and building firm, announced a proposal to build Gateway Plaza, a new 15-story office building in downtown Richmond. McGuireWoods LLP and McGuireWoods Consulting LLC have agreed to become the anchor tenants of the new building.

That leaves the One James Center with 249,633 square feet of availability.

CMBS investors should monitor their portfolio’s exposure to tenant rollover risk, particularly for large leases that are more susceptible to downsizing as they come up for renewal in a new era of office efficiency, Wells Fargo Securities said.

Landlords have a desire to take advantage of low financing rates to refinance upcoming building loans, but need to show their building is stabilized, which pressures them to focus on tenant retention. Landlords unable to retain tenants or successfully accommodate current tenant needs may have a difficult time refinancing their building loans, the firm said.

Article by Costar Group – Original Article Found Here

 

For More information, please contact Bryan Cole and don’t forget to visit www.WyomissingOfficeSpace.com

Bryan Cole Sr. Associate
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

Two New Leases Executed at 1 Meridian Blvd. in Wyomissing

Bryan Cole and John Buccinno complete two new leases at 1 Meridian Blvd.

NAI Keystone’s Bryan Cole and John Buccinno completed two new leases at 1 Meridian Blvd in Wyomissing.onemerdian_ext_2-lg

The leases were completed in the 1st quarter of 2013 to Baldwin Brass and Sunoco Logistics.  The lease values totaled over $3 Million for the term and 20,329 sf.

The property is owned by Equas Capital Partners – formally BPG Properties.  The building has various suites still for lease which can be found at www.WyomissingOfficeSpace.com or http://www.Bryan-Cole.com

For more information email us at Bcole@naikeystone.com

Bryan Cole

NAI Keystone Commercial & Industrial, LLC

Office & Medical Real Estate Specialist

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

Bcole@naikeystone.com | 610.370.8502

Greater Reading Office Market Report by Bryan Cole

Written and compiled by Bryan Cole of NAI Keystone Commercial & Industrial, LLC

 

The 2011 Greater Reading Office Market experienced similar activity as the previous year; however unlike 2010 the market noted a slight positive absorption.  This was mainly due to the majority of the tenants in the local market maintaining their space rather than reducing or relocating.  The activity level was still there in the 1st thru 3rd quarters of 2011; however companies were nervous about making decisions on moving or relocating from their existing facilities.  The positive absorption came from some tenants taking advantage of the market by extending their lease terms to take advantage of the lower base rental rates and tenant incentives and few slightly increasing their footprints.

These renewals included The Travelers insurance group who renewed their lease at 1105 Berkshire Blvd, Wyomissing which consisted of approximately 60,000 +/- square feet, along with STV Inc., who renewed their lease at 205 W. Welsh Drive in Douglassville, which was approximately 50,000 sf.

New developments slowed in 2011 with only a few facilities being built which includes the 33,000 sf. speculative project at The Wyomissing Corporate Campus and the Reading Hospitals newly built MOB in Cumru Township.

The 4th quarter 2011 into the 1st quarter 2012 experienced an extreme level of activity.  There are approximately 200,000 sf. of new and existing tenants circulating the market; looking to move into the county or relocate from the existing facilities within the county.

Although the level of activity has jumped, there have also been recent press releases of large tenants vacating large blocks of contiguous space or looking to sub-lease their space.  This includes the announcement of CNA looking to close down or downsize its Reading facility which contains approximately 260,000 sf., along with Teleflex marketing their 60,000 sf. for Sub-Lease at 1 Meridian Boulevard in Wyomissing, IMS Healthcare reducing their footprint locally, and Sovereign Bank continuing to try and sub-lease their 57,000 sf. office building on Berkshire Blvd.

Overall the end of year 2011 showed a slight decrease in Suburban Class “A” building Vacancies starting at 12.4% in late 2010 and closing at 12.2%, mostly due to a new build to suit for the Reading Hospital and Medical Group, along with companies increasing their footprints at 1 Granite Point, and 1105 Berkshire Blvd.  Class “A” buildings have typically been a safe sector in the marketplace because of low inventory; however with new developments coming on-line, and companies still looking for lower rents the Class “A” sector has seen less demand.  This will and has changed in 2012 with a great deal of the activity surrounding this type of product.

Class “A” rental rates in 2011 remained flat with rates ranging from $15.50 – $16.75 (Triple Net) on the high side; however there was considerable downward pressure on pricing within this segment.

The Class “B” sector experienced the same in 2011 as did Class “A”, starting at 13.6% and ending at 13.2%, however while vacancy rates decreased, rental rates has a slight increase.  Base rental rates slightly increased within this sector ranging from $9-10 per square foot and tops out at $13-14 per square foot with gross rates coming in around $16-17 per square foot!

Downtown City of Reading has seen some new deals consummated, like the renewal of the United Way of Berks County and the Spanish Council of Berks County.  However the market still remains flat due to these companies’ renewing leases rather than expanding their footprints.  Buildings that have seen vacancy for some time, including 645 Penn Street and 501 Washington Street are starting to show some signs of hope due to new management and ownership changes taking effect.  Owners and tenants are continuing to struggle with high parking costs and security concerns, which are continuing to be addressed by a committed City Administration.

Downtown City of Reading vacancy rates continue to increase in late 2011 with rates rising 20.70% to 21.00% in Class “B” Product with much of the vacancy continuing to surround large blocks of contiguous space.   This also includes approximately 20,000 sf. of vacant space which was not accounted for in 2010’s numbers at The Madison Building located at 400 Washington Street.

2012 downtown vacancy rates will have a major negative jump if CNA follows thru with their plan to vacate the 260,000 sf. facility located at 401 Penn Street.  Even if CNA decides to maintain its presence they are still only occupying 80,000 of the 260,000 sf., so the impact is going to be felt regardless.  A positive note is that 525 Lancaster Ave, Reading has been purchased by a multi-family developer who has decided to redevelopment from office to apartments.  This will eliminate a 110,000 sf. office building which has been vacant for a number of years.

The City of Reading and economic development groups have been working hard to improve and revitalize Downtown which shows in the number of projects underway and/or completed.  The new IMAX Theater and the completed addition to the Reading Eagle Headquarters in the CBD are welcome entrants to the market and kick off a multi-million dollar main street corridor project that includes a new $67 million Doubletree hotel and garage project across from the Sovereign Entertainment and Expo Center. This will help attract a more vibrant restaurant and entertainment segment with increased amenities and ultimately assist to bring tenants back downtown while decreasing vacancy rates and increases in the tax base.

2012 is showing signs of hope, with new tenants entering the market place, and rental rates continuing along a steady course.

Deals will continue getting done because landlords are reacting to current market conditions, which means companies are getting favorable incentives, such as introductory rates, rent abatements and additional tenant improvements.  Also, landlords are now offering tenant improvements and incentives to keep their existing tenants.

 

Check out my blog at www.Bryanecole.wordpress.com for more market information and updates within the Greater Reading Office Sector along with checking our website at www.Bryan-Cole.com

 

For More Information about Local News, Market Intel, or Commercial Real Estate Opportunities; visit www.Bryan-Cole.com

Bryan E. Cole  |  NAI Keystone Commercial & Industrial, LLC

direct: 610-370-8502

Bcole@naikeystone.com

Check out my new website at www.Bryan-Cole.com

Landlords Poised to Regain Upper Hand In Recovering Office Market

Article by Costar Group Research Department

Office space absorption doubled during 2011 as the office-using job base expanded and vacancies declined across nearly two-thirds of U.S. submarkets, CoStar Group reported this week in its Year-End 2011 Office Review & Outlook. The report presented to CoStar clients found that positive momentum in office fundamentals and the continued absence of new construction is expected to result in higher rents for building owners over the next few years.

Office sales increased steadily through 2011 over the previous year as investors sought to get ahead of the curve, with investor interest spreading beyond the safer well-leased investment-grade buildings in top-tier markets and into smaller properties and second-tier markets such as Seattle, Atlanta and Northern New Jersey. Total fourth-quarter 2011 office sales are likely to match or exceed fourth-quarter 2010’s impressive $25 billion once all sales are tallied.

Total CRE sales, which evened out in 2011 across all property types, is estimated at nearly $300 billion, the highest since the peak of the real estate boom in 2007, and well above the historical average of around $220 billion since 2000.

Although office tenants continue to hold the cards in many markets, CoStar reports the outlook appears to increasingly favor building owners in coming years as the cycle continues.


Follow me on Twitter for live news updates or check out my website www.Bryan-Cole.com.


“To sum it up, for the office market, we’re just now getting started. Now is a good time to be an office investor,” said Walter Page, director of research for Property and Portfolio Research (PPR), CoStar’s analytics and forecasting division. “We expect vacancy to continue to decline through 2015, and when you have declining vacancy rates, you can raise rents, returns are better, and for an investor, that’s good news.”

Economy Shows Positive Signs For CRE
CoStar Group founder and CEO Andrew Florance noted that, although overall employment growth has been anemic, the U.S. posted a solid 1.7% gain in office-using jobs, led by technology and energy markets such as Seattle, Boston, San Francisco and Dallas.

Other positive signs abound, including a leveling off in the loss of manufacturing jobs and a bottoming of the housing market, which should be less of a drag on the economy going forward, and likely to be the source for new jobs as replacement demand for single-family and apartment housing fuels expected construction demand.

Meanwhile, corporate profits are off the charts, from $800 billion in 2000 to $2 trillion in 2011.

“Coupled with low-interest rates, companies are in a position to invest aggressively in new facilities and equipment. From a CRE perspective, Corporate America is well positioned to invest in their businesses, plant facilities and equipment,” Florance added.

Challenges remain, including relatively weak consumer confidence, continued high unemployment, a record federal budget deficit and economic upheaval in Europe. Occupancy recovery varies widely between metros, with “have” markets such as supply constrained New York City showing 7.4% vacancy and housing bust “have-nots” like Phoenix lingering at a stubbornly high 20.7%.

However, CRE values have recovered to roughly 2000-year levels, and vacancies declined across the country last year. In a strong indicator of an impending office rebound, vacancy rates declined in 63% of the 2,400 office submarkets tracked by CoStar. That’s the strongest number since 2004-05, which roughly marked the beginning of the last CRE up cycle.

In the fourth quarter, CoStar recorded 18 million feet of net absorption, which drives occupancy rates and other leasing fundamentals, and a total of 49 million square feet for the year, doubling 2010’s absorption.

Despite rising concerns about the darkening economic picture that started last spring and continued through the year, absorption rose sharply in the second half of 2011, said Page, noting that companies are leasing space “and smaller tenants, the lifeblood of the office sector, are back.”

Jay Spivey, CoStar senior director of research and analytics, said that the office recovery, while not feeling very strong so far for many landlords and investors, is actually much stronger than the recovery in the office market following the collapse of Internet companies and real estate downturn 10 years.
“We have seven quarters of positive growth, and at that same point 10 years ago, we were still seeing negative absorption,” Spivey said.

Concessions Starting to Disappear
With improving occupancy and little new supply, concessions like free rent and tenant improvements are burning off in some markets and overall, the long downward slide in average office rents has likely bottomed.

CoStar sees significant upside in office rents, which are currently 11% below their long-term trend, Page said. With office construction at an all-time low, rents will rise and are expected to reach their long-term average between 2015 and 2017.

The analysts singled out “premier” suburban areas located near the urban core in markets such as Bethesda, MD, and West Los Angeles are seeing net absorption recover much more quickly on a rolling annual average compared with CBDs or outer suburban areas. Likewise, a survey of four- and five-star buildings in CoStar’s new Building Rating System, the equivalent of the top Class A properties, shows that the best buildings are absorbing most of the space. One- and two-star buildings, typically Class C, were hammered during the recession and are recovering more slowly.

While national vacancy and availability rates are both trending down, there are vast differences within metros and within the CBD and suburban properties in those markets. In Miami, for example, the CBD vacancy rate is about 22%, while suburban and premier suburban rates are lower. By contrast, Atlanta’s Buckhead premier office suburb, where much new construction came on line as the recession hit, has the highest vacancy at over 20%, more than 6 percentage point higher than the Atlanta CBD.

Investors Explore Secondary, Suburban Markets for Deals
The return of portfolio sales outside the largest markets in 2011 shows that investors, who largely retreated to the safety of well-leased properties in safe core markets like Washington and New York over the last couple of years, are ready to assume risk in certain transactions, with the help of a slowly returning flow of debt financing.

Distressed sales volume as a percentage of total office sale transactions fell during 2011. As distress has abated, prices have begun to rise over the last couple of quarters, spreading from investment-grade properties to smaller general commercial sales, according to the CoStar Commercial Repeat Sale Index (CCRSI).

Pricing has risen in most markets and is approaching replacement cost for some buildings, Spivey noted. Higher occupancy buildings are fetching a higher price premium currently than in 2007, possibly opening a window for investors on opportunities in select vacancy challenged properties.

Source Costar Group

For More Information about Local News, Market Intel, or Commercial Real Estate Opportunities; visit www.Bryan-Cole.com

Bryan E. Cole
NAI Keystone Commercial & Industrial, LLC
direct: 610-370-8502
Bcole@naikeystone.com
Check out my new website at www.Bryan-Cole.com

About Bryan Cole and NAI Keystone

Bryan joined NAI Keystone in early 2004, but before joining NAI, Bryan Cole spent 4 year’s active duty in the United States Marine Corp, including a 6 month deployment in Afghanistan, a 4 month deployment in Kuwait/Iraq, and a 7 month deployment in Japan. Prior to joining the military Bryan was involved in the construction of commercial and multi-unit properties in the Philadelphia suburbs. Bryan has experience working with a diverse group of individuals in numerous countries throughout the world. During Bryan’s time at NAI, he has sold and leased well over $200 Million Dollars worth of Commercial Real Estate. Because of this, Bryan earned NAI gold club status his first year in the business. Bryan is currently working on earning both his CCIM designation and SIOR designation. Bryan has been NAI Keystone’s Top Performer from 2006 – 2010.
NAI Keystone is a full service commercial and industrial real estate firm located in Reading, Berks County.  NAI Keystone manages and handles approximately 4 Million square feet of commercial and industrial space in Berks and Schuylkill County.  NAI is the only firm in Berks County dedicated to strictly commercial real estate.  www.Bryan-Cole.com.