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.

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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

EO 2nd Quarter Office Market Report for Suburban Greater Reading PA

Suburban Office Market Overview by Bryan Cole of NAI Keystone

The Greater Reading Suburban Office Market ended the second quarter 2013 with a vacancy rate for Class A Office buildings at 15.60%.  This is a decrease in vacancy rates from 1st quarter 2013 and an increase in vacancy from same period 2012.   The average rental rates increased to $16.50 – $21.50 per square foot Modified Gross which is an increase in the rates from the same period 2012.

Deals of primary focus within Class A building sector were the 6,863 sf. lease at 1220 Broadcasting Road, which was a relocation and expansion for the already Wyomissing based organization, and the new Amity Professional Center which Amity Dentistry leased space in the new building located at 957 Ben Franklin Highway, these leases along with a few other assisted in reducing vacancy rates and increasing overall absorption.Dates

The Class B Suburban office market ended the second quarter of 2013 with a vacancy rate of 19.46%.  This is a slight increase in vacancy from first quarter 2013 by less than one percent, and it is a slight decrease from the same period 2012.   The average rental rates had an increase from 1st quarter 2013 to 2nd quarter 2013 at $12.50 – $17.50 per square foot modified gross opposed to that of rates from the same period 2012 which was $11.00 – $17.50 per square foot.

Deals of primary focus within the Class B building sector were the new leases at 965 Berkshire Blvd. of 11,014 sf, and 2001 State Hill Road of 3,500 sf.  The activity level for second generation Class B space has slowed into the second quarter, however this is typical towards the summer months.  We expect an increase within the 3rd quarter 2013.

And the Class C Suburban office market sector ended the 2nd quarter of 2013 with a vacancy rate of 13.0% which was an increase from the 1st quarter 2013.

Our outlook for the office market going into 3rd quarter 2013 is continued optimism as activity levels continue to remain strong.  There are over 200,000 sf. of new lease deals within the Berks County market.

Link to Full Report Here – Don’t forget to join my members only website for up-to-date market reports, press, and many other tools and resources at www.NAIKeystoneMembers.com

2Q13 - Suburban

Bryan Cole Sr. Associate

Bcole@naikeystone.com

www.Bryan-Cole.com

 NAI Keystone Commercial & Industrial, LLC

3970 Perkiomen Ave, Suite 200 Reading, PA 19606

Direct +1 610 370 8502

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