Greater Reading Office Market Overview End of 1st Quarter 2017 Office Report By Bryan Cole, SIOR

Suburban Overview

The overall Suburban Office Market was relatively flat thru the 1st quarter of 2017 with vacancy rates for Class A Office product at 5.56% which is a higher than Year End 2016 and a few percentage points higher than the same period in 2016.  There were several lease renewals which were good for the market, however it did not attribute to the absorption rate as most leases were renewed as is with little to no expansions.

The total proposed sites tracked, equates to 93,100 sf. which when added to the existing product and sublease space pushes the vacancy rates up to 8.22%.

The average rental rates also remained flat from the previous quarter at $19.50 – $24.50 per square foot modified gross, however they are a few dollars per square foot higher than the same period in 2016.

The Class B office sector continues to be the driver of most absorption within the County, however it also remained flat in the 1st quarter of 2017.  The overall vacancy rates increased to 15.01% from the end of 2016 which is exactly where the rates were in the same period of 2016.

The rental rates were flat from the end of 2016 to the end of the 1st quarter of 2017 with rates in the $15.50 – $19.50 per square foot modified gross range.  However, the rates are much higher than the same period in 2016.

The 2017 Office market as described in the end of year 2016 report seems to be poised for strong growth in the Financial Sector and the Medical Sector.

The description from the End of Year 2016 report remains true:

The financial sector has seen significant growth locally with various financial institutions looking to increase their footprints and amenities to attract a younger workforce and embrace the change in technology.  The Medical Sector is another part of the industry which continues to see growth.  Several smaller, less efficient medical buildings have been placed on the market for sale or lease, however these facilities are becoming outdated and too small to benefit or attract the larger health systems.  The growth pattern seems to indicate larger, better located facilities, with easy access to customers and better technology.

Overall activity was concentrated on Lease Renewals rather than new deals.  This is a common pattern in the 1st quarter as leases expiring towards the middle or end of the given year result in early negotiations.

 

Downtown Overview

The Reading Central Business District (CBD) ended the 1st quarter of 2017 with a vacancy rate of 5.02% which is slightly higher than the same period in 2016.  As previously outlined, we currently track eight (8) buildings which are classified as Class A Office Buildings in Downtown Readings CBD.  These variables are location, infrastructure, and overall appeal.  The Reading Class A CBD is below National Averages for CBD related markets, as well as the Philadelphia CBD.

The Class A sectors rental rates remain unchanged from the end of 2016 at $11.00 – $15.50 psf. modified gross.

The Class B Downtown Office Market ended the 1st quarter of 2017 with a vacancy rate of 27.89%.  This was a slight decrease in vacancy rates from the previous quarter.  The vacancy rate is slightly higher than the same period in 2016.  The average rental rates for downtown product is very low compared to the other CBD markets at $8.50 – $12.00 per square foot modified gross.

As outlined in the 2016 End of Year Report and as shown below remain true:

The positive spin is that there are a few local investors who have been trying to resurrect some of the outdated facilities, and the hope is they are successful at attracting new companies that can take advantage of the workforce and bring some business back to downtown.  The City and the local business leaders need to continue to work together to make this a reality; and remove the obstacles to help business succeed in downtown.  Other nearby markets, such as Lancaster and Allentown have had local companies take larger buildings and convert them into residential and higher end updated office facilities.

 

Commercial Space Overall

As I have mentioned in every quarterly article that I have written, the key elements that will be critical to all sectors of commercial real estate, is the need to work with dedicated, educated, and willing township officials and boards that can assist in getting approvals expedited and incentives obtained.  This will be an absolute critical element in all deals moving forward.  Greater Reading is fortunate to have these types of organizations and people in place.  The hope is that municipalities will learn the successes from one another and incorporate that into their areas.  Berks County is also fortunate to have strong local business leaders that are willing to spend their time and resources to assist their respective areas, and it is critical that municipalities lean on those individuals for guidance.

www.WyomissingOfficeSpace.com

 

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

 

By Bryan Cole, SIOR | Principal

NAI Keystone Commercial & Industrial, LLC | www.Bryan-Cole.com

Wyomissing Office Properties for Lease

List of Properties for Lease / Sale in Wyomissing Pennsylvania.

By Bryan Cole of NAI Keystone

Wyomissing Office Property Cover

You can click the photo above to take you to the Wyomissing Office Mailing, or click here.

If you are looking to lease office space in Wyomissing or Spring Township, be sure to check out www.WyoOfficeSpace.com.  If you are looking for office space in any other market, please give us a call or visit www.Bryan-Cole.com.

Thank you,

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.WyoOfficeSpace.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

Reading’s Boscov breaks ground today on $56M four-star hotel

By Jennifer Glose of LVB.com

Well-known Reading retailer Albert Boscov broke ground this morning on what will be a $56 million four-star hotel in the city’s downtown – a vision that has been seven years in the making.

Taking up the entire 700 block of Penn Street, the nine-floor, 208-room Double Tree by Hilton will sit directly across from Santander Arena. Hotel features will include a convention center, pool, ballrooms and a restaurant, along with a 928-space parking lot. The complex is expected to be completed by summer 2015.

“We have been working for seven years to make this happen,” said Boscov, the well-known owner of Boscov’s retail store chain. “We didn’t want just a regular hotel; we wanted a four-star hotel.”

The hotel project, Boscov said, is the result of efforts by his nonprofit Our City Reading Inc. and a group of 10 people in the community who supported the project.

“We are excited to see this movement on the long anticipated hotel,” said Charles Broad, executive director of the city’s Downtown Improvement District Authority. “First of all, it will provide benefit to people coming into the arena, and we hope that it will attract other restaurants and coffee shops.”

Boscov’ connection to Reading is eminent. His deep roots in the city are in part from his late father’s legacy, Solomon Boscov, who more than a century ago opened the first Boscov’s retail department store at Ninth and Pike streets in the downtown. Albert Boscov was instrumental in growing his father’s business into a multistore retail chain of more than 40 stores throughout the East Coast.

“He has been a visionary for Reading,” Broad said. “He has a vision for what should be here and makes it happen and never stops trying.”

In 2001, Boscov started Our City Reading as a nonprofit to renovate old homes in the city and make them affordable for first-time homebuyers in the city and to develop the city to bring quality jobs. To date, Our City Reading has renovated 550 homes.

Our City Reading also helped to develop the 200 block of the downtown near Washington Street with a GoggleWorks luxury apartment building, Imax Theater, Panevino Rustic Italian Cuisine and the Goggleworks Center for the Arts.

“I am proud of the fact that we have had the support of the community,” Boscov said.

“Reading never had a four-star hotel, and I believe this is one of the most important projects in Reading to date and a great step forward – and we are far from done.”

Article By Jennifer Glose and the original can be found by clicking here

End of Original Article ~

“The project will be a great addition to Downtown Reading and add another amenity that is much-needed.  I look forward to seeing it finished and have high hopes that the hotel will bring new business to downtown Reading while helping retain the existing” ~Bryan Cole, NAI Keystone Commercial & Industrial, LLC

NAI Keystone’s Bryan Cole and Steve Willems are marketing two office buildings which are very close to the new Hotel.   One of the buildings is directly next door.

645 Penn Street, Reading PA

201 Penn Street, Reading “The Gateway Building”

 

 

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

Bryan Cole of NAI is awarded Exclusive Representation of Office Building Assignment

Bryan Cole and Steve Willems of NAI Keystone has been awarded the listing assignment for 2901 St. Lawrence Ave, Reading PA.  The property is a 16,232 sf. two-story office building in Mount Penn, Berks County.

The facility is owned and managed by Dolan Family Partnership a subsidiary of Dolan Construction.ServeAttachment (22)

The building currently has three solid tenants including the U.S. Bankruptcy Court.

The facility only has one suite for lease totaling 2,700 sf. +/- and will be placed on the market for sale at $1,075,000.00.

For More Information Check the Offering Package Link Below and for full financials please contact us for a confidentiality agreement.

For More information, please contact Bryan Cole and don’t forget to visit 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

December 2012 Commercial & Industrial Real Estate Newsletter

December 2012 Commercial & Industrial Real Estate Newsletter

CRR-Monthly December 12

See Link Below

 

The December 2012 Commercial Real Estate Newsletter – This Newsletter outlines property listings of the month, events, deals, and articles relative to Commercial Real Estate in Berks and Schuylkill County PA.

Click Here for Decembers Newsletter.

 

For a full list of all our Newsletters please visit:  http://www.bryan-cole.com/newsletters.html

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 July of 2004, prior to joining NAI,  Bryan Cole spent 4 year’s active duty in the U.S. 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 in the excess of $270 Million Dollar’s 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 the Top Performer/Producer at  NAI since 2006 with an average of $30-$35 Million in production  annually.
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  | 610 779 1400 (o) | 610 779 1985 (f)

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