CALLING 2011 a “turning point” in the regional economic recovery, CB Richard Ellis New England predicted a slow but steadily improving Rhode Island commercial real estate market for the year ahead in its annual market overview Thursday.
PROVIDENCE – Calling 2011 a “turning point” in the regional economic recovery, CB Richard Ellis New England predicted a slow but steadily improving Rhode Island commercial real estate market for the year ahead in its annual market overview Thursday.
“We really have seen 2011 as a rally and a turning point in the Rhode Island economy, when we hit that point where we see the economy turning favorably and see 2012 as a recovery,” said Alden Anderson, senior vice president and partner of CD Richard Ellis New England in remarks at The Westin Providence. “We don’t see it as a quick turn around, but 2011 was an inflection point.”
In addition to positive indicators for the New England economy as a whole, such as slowly receding unemployment levels, Anderson said recent leasing activity in downtown Providence had improved the firm’s market outlook for the year ahead.
“I think the major transactions that occurred in the City of Providence, significant lease renewals and tenants moving into large blocks of space are clear indications [that] companies are making plans to satisfy growth for the future,” Anderson said. “We are seeing a generally elevated interest in transactions and interest in businesses expanding.”
As evidence of progress, the CB Richard Ellis report pointed to absorption of 172,025 square feet of office space in downtown Providence during 2011, leading the vacancy rate to drop to 15.9 percent.
While overall rental rates are still down, downtown class A office space asking rents increased from $29.60 to $30.05 per square foot year-over-year, according to the overview.
Areas of the city that saw decreasing office vacancy rates in 2011 included the Capital Center, South Main Street, Randall Square, Empire Street and the Promenade, while the Financial District, Westminster Street and Jewelry District saw vacancy rates rise for the year.
The market for office space in suburban Rhode Island was more mixed, the report said, with vacancy rates decreasing in the East Bay, but increasing in the West Bay, suburban Providence, northern Rhode Island and Aquidneck Island.