Suburban Berks County Office Report – 3Q16

Suburban Berks County Overview – End of 3rd Quarter 2016

The Greater Reading Suburban Office Market ended the 3rd Quarter 2016 with a vacancy rate for Class A Office Buildings at 8.94% which includes existing and proposed sites. The vacancy rate for only Existing Class A Office Buildings is 3.00%.  This is a negative in vacancy rates from the end of 2015, and an overall decrease from the same period in 2014.  The average rental rates went up slightly and are now at $19.50 – $24.50 per square foot modified gross, which is a larger increase in the rates from the same period in 2014.

The Class A Product has 185,120 sf. as being proposed within the market and another 28,165.00 sf. that is available for sub-lease.   There was a major reduction in proposed square footage after the Spring Township Corporate Office Campus; which is now being proposed for a different use.

The Class B Suburban Office Market ended 3rd Quarter 2016 with a vacancy rate of 17.35% for existing and proposed sites.  8-17-2014 9-56-21 PMThe vacancy rate for only Existing Class B Office buildings is 15.11%.  This is a slight decrease in vacancy rates from the end of 2nd Quarter 2016 and an increase from the same period in 2015.   The average rental rates had a much-needed increase in the 2nd quarter of 2016; however they remained relatively flat ending out the 3rd quarter of 2016 with rates at $15.00 – $19.50 per square foot modified gross.

The Class B Product has 73,000 sf. as being proposed within the market.  These are subject to change as well, since one of the office sites was on/off again for a hotel development.

The Class C Suburban Office Market ended the 3rd Quarter with a vacancy rate of 14.99%, which is a larger drop from same period 2015 and a slight drop from 2nd Quarter 2016.

The overall Suburban 3rd Quarter Office Market noticed continued growth due to several lease renewals that contained expansions.  The majority of the growth has been from within the county.

The EOY report should contain positive news in an entire market review; however, going into 2017 the belief is, there will be large blocks of space added to the market which will affect the numbers, specifically the announcement by Teleflex to sell their facility.

Landlord concessions are being removed from offerings since the market has stabilized, which is also pushing rental rates upwards.

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).  The primary issue within the investment market is the lack of quality product.

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.

 

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.WyomissingOfficeSpace.com

 

3rd Quarter Office Market Report Update for Greater Reading

Suburban overview

The greater Reading suburban office market ended the second quarter of 2015 with a vacancy rate for Class A, or highest quality, office buildings at 10.93 percent, which includes existing and proposed sites. The vacancy rate for only existing Class A office buildings is 4.57 percent.

This is a decrease in vacancy rates from the end of first quarter this year and a decrease from the same period in 2014, which was at 13.55 percent. The average rental rates      remained unchanged at $17.50 to $22.50 per square foot modified gross (in which the tenant pays the base rent and the landlord covers all costs relating to property + operations), which is a decrease in the rates from the same period of 2014.

The Class B suburban office market ended the first quarter with a vacancy rate of 18.40 percent for existing and proposed sites. The vacancy rate for only existing Class B  Office buildings is 16.19 percent. This is a slight increase in vacancy rates from the end of the first quarter 2015, and it is a decrease from the same period in 2014. The average  rental rates remained unchanged at $12.50 to $15.50 per square foot modified gross from the end of the first quarter 2015 to the end of the second quarter of 2015. That is a  larger decrease from the same period in 2014, when average rental rates were $12.50 to $17.50 per square foot.

The Class C suburban office market ended the second quarter of 2015 with a vacancy rate of 13.97 percent, which is a slight decrease from the same period in 2014 and the  previous quarter.

The outlook for the office market sector going into the third quarter of 2015 is very optimistic, because of the high level of continued interest in the marketplace. Various deals that are finalized were completed in the beginning of the third quarter, including an 18,000-square-foot lease on Berkshire Boulevard, which could help third quarter numbers.

The opinions in the next two paragraphs are from the first quarter of 2015 and remain unchanged:

Cap rates for investment-grade office buildings remain low because of attractive financing. The most important variables are length of leases, credit of tenant(s), type of lease and type of asset (such as single tenant, multi-tenant, medical or 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 second quarter of 2015 with a vacancy rate for Class A office buildings at 22.63 percent. It was a slight decrease in rates from the end of the first quarter of 2015. The average rental rates remained unchanged from the first quarter of 2015 through the second quarter of 2015 at $11 per square foot modified gross to $14.50 per square foot modified gross.

The reason for the slight decrease in vacancy rates is because of the new location of a 11,000-square-foot tenant at 501 Washington St. and expansion of various tenants throughout the marketplace. The Class A market noticed a benefit of the expansion of the large lease completed in the first quarter of 2015. However, Class B space is feeling the effect into the second quarter of 2015 because of the large vacancy that was created by the move.

The Class B downtown office market ended the second quarter of 2015 with a vacancy rate of 23.10 percent. This was an increase in vacancy rates from the end of first quarter 2015, and it was a smaller 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 the second quarter to $11 per square foot modified gross. This is similar to the rates from the same period in 2014. Overall vacancy rates for Class C buildings remained unchanged at 23.62 percent.

 

Bryan Cole is the real estate office and medical specialist of NAI Keystone Commercial and Industrial LLC. The website is www.Bryan-Cole.com. – See more at: http://readingeagle.com/business-weekly/article/office-space-vacancy-rates-decrease-from-1st-quarter-and-from-second-quarter-of-2014#sthash.Aq2nFSP1.dpuf

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 

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)

Cole and Willems of NAI Keystone Receives SIOR Designation

Bryan Cole and Steve Willems of NAI Keystone Commercial & Industrial, LLC have received the SIOR designation.

 

The designation includesSIOR Logo the leading professionals within office and industrial real estate brokerage and represents today’s most knowledgeable, experienced, and successful commercial real estate brokerage specialists in the world.

 

There are strict guidelines to obtain the designation including Education, Experience, and High Levels of Income.  There are 2,800 brokers worldwide who have met the stringent qualifications to earn the SIOR designation.

 

And one of the most important aspect is, providing exceptional service with an emphasis on ethics.

 

About SIOR:

Thee SOCIETY OF INDUSTRIAL AND OFFICE REALTORS® is the leading professional commercial and industrial real estate association. With more than 3,000 members in more than 630 cities in 34 countries, SIOR represents today’s most knowledgeable, experienced, and successful commercial real estate brokerage specialists.

SIOR has certified thousands of members with the prestigious SIOR designation, a professional symbol of the highest level of knowledge, production, and ethics in the real estate industry. Real estate professionals who have earned the SIOR designation are recognized by corporate real estate executives, commercial real estate brokers, agents, lenders, and other real estate professionals as the most capable and experienced brokerage practitioners in any market. SIOR designees can hold the following specialty designations: industrial, office, sales manager, executive manager, or advisory service.

SIOR also consists of associate members who include corporate executives, developers, educators, and others involved in the commercial real estate industry.

A professional affiliate of the NATIONAL ASSOCIATION OF REALTORS®, SIOR is dedicated to the practice and maintenance of the highest professional and ethical standards. SIOR maintains a commitment to business and industry by providing outstanding professional services, publications, and educational programs.

Transaction Data shows the success of SIOR members:
On average from 2008-2012 SIOR members reported that he or she leased or sold an average of 1 million square feet of space for a total dollar volume of $31 million in 30 transactions.

As a group, SIOR designees closed more than 78,000 transactions.

SIOR maintains and promotes a professional designation of the highest quality for the benefit of its members and their clients. The SIOR designation stands unchallenged for excellence in the performance of real estate services, and is universally recognized as the prerequisite in the selection of a commercial real estate broker, agent, or consultant.

– See more at: http://www.sior.com/about/sior-overview#sthash.nJpVtErv.dpuf

 

 

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

Bryan Cole, SIOR | 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

Year End 2013 – Greater Reading Office Report

Year End 2013 Full Office Report

By Bryan Cole of NAI Keystone

Year End 2013 - Cover

Please join my Client/Member site to access all market reports.

You can click the photo above to take you to the current report, or click here.

 

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

Greater Reading Office Market Overview – 4th Qtr. 2013

Greater Reading Office Market Overview
4th Quarter 2013 Report
By Bryan Cole

Suburban Office Market Overview

The Greater Reading Suburban Office Market ended the 4th quarter of 2013 with a vacancy rate for Class A Office buildings at 12.71 percent. This is a large decrease in vacancy rates from 3rd quarter of 2013 and a larger decrease in vacancy from same period in 2012. The average rental rates increased to $17.50 – $22.50 per square foot Modified Gross, which is also an increase in the rates from the same period in 2012.

Deals of primary focus within Class A building sector were the 53,000 sf. lease at 1 Meridian Blvd, in Wyomissing, which was a relocation from another area of Berks County, and the reduction of around 50,000 sf. of space previously slated for office buildings being converted to a hotel. The lease outlined, along with other market factors, helped to reduce vacancy rates and increase overall absorption.

The Class B Suburban Office Market ended the 4th quarter of 2013 with a vacancy rate of 16.12 percent. This is a large decrease in vacancy rates from 3rd quarter of 2013, and it is a decrease from the same period in 2012. The average rental rates increased $14.50 – $18.50 per square foot Modified Gross from the 3rd quarter of 2013 to 4th quarter of 2013 and that is an increase from the same period in 2012, when average rental rates were $11.00 – $16.50 per square foot.

Deals of primary focus within the Class B building sector were two new leases, including the 26,016 sf. lease at 1125 Berkshire Blvd. in Wyomissing, and the 15,000 sf. lease at 6 Commerce Drive in Wyomissing. The activity level for second generation Class B space has slowed in the 4th quarter, however, this is typical toward the holiday months.

And the Class C Suburban Office Market ended the 4th quarter of 2013 with a vacancy rate of 13.07 percent, which contained no change from the 3rd quarter of 2013.

Our outlook for the office market sector going into the 1st quarter of 2014 is continued optimism as activity levels continue to remain strong.

Downtown Reading Office Market Overview

The Greater Reading Downtown Office Market ended the 4th quarter of 2013 with a vacancy rate for Class A Office buildings at 5.45 percent. This was welcome news as it was a very large positive change in vacancy rates from 3rd quarter of 2013; it was also a large decrease from the same period in 2012. The average rental rates slightly decreased from the 3rd to the 4th quarter of 2013 at $11.00 per square foot Modified Gross to $14.50 per square foot Modified Gross.

The reason for the large drop in vacancy rates was due to the sale of 401 Penn Street to I-Lead Charter School. Although the public’s understanding is they will be leasing some of the space out, nothing has been clearly defined. Due to the sale, the large block of available space has been removed from the market, causing vacancy rates to significantly drop.
The Class B Downtown Office Market ended the 4th quarter of 2013 with a vacancy rate of 25.59 percent. This was an increase in vacancy rates from 3rd quarter of 2013, and it was a large increase from the same period in 2012. The average rental rates remained unchanged at $7.50 per square foot Modified Gross in the 4th quarter 2013 to $11.00 per square foot Modified Gross, this is however a slight decrease to the rates from the same period 2012.

Overall Vacancy Rates for Class C buildings jumped from 4th quarter to more than 23.35 percent. This was due to 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 re-evaluating the assets and conditions.

www.Bryan-Cole.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