Commercial real estate shows ‘signs of improvement’ in 2012

SEVERAL LARGE BUILDINGS, including Cranston-based Calart Tower, are for sale or lease, according to Capstone Properties' midyear survey.
Posted 8/9/12

PROVIDENCE – Commercial real estate sales and leasing showed “multiple signs of improvement” in the first half of 2012 compared with the same period of last year, but prices remain stagnant, Capstone Properties said in its midyear survey.

“Sale and leasing activity in the first six months of the year was broader based and spread out over more categories and sizes,” said Capstone Vice President Neil Amper. “While we have not seen an increase in pricing, the re-entry of the smaller user makes us more optimistic than last year. Banks appear more willing to lend and some local companies have expanded and begun to occupy buildings that have been vacant for years.”

In the office market, Amper noted the statewide vacancy dropped to 9.2 percent in the first half of the year from 10 percent at the same time last year.

Encouraging office transactions during the period include Atrion Networking Corp.’s lease of 45,000-square feet on Metro Center Boulevard in Warwick, Alex and Ani’s acquisition of a 16,400-square-builting on Weybosset Street in downtown Providence and the sale of the 210,000-square-foot GTECH building in downtown Providence to RJ Kelly of Massachusetts.

There has been minimal leasing activity in Class B office space, however, and there are numerous spaces available in the Jefferson Boulevard corridor in Warwick.

“The marketplace is not absorbing space and consequently prices have stagnated and concessions are still prevalent in all categories,” Amper said.

There has been very little improvement in the retail market, with the vacancy rate unchanged at 6.1 percent and “very few major retailers expanding in New England,” the report said.

Activity is most evident in the food service sector, but big box store vacancies remain a problems and vacancies on the Bald Hill Road strip in Warwick are not going away.

The industrial market has been more encouraging, the report said, with increased inquiries and Quick Fit leasing 50,000 square feet in Warwick for manufacturing.

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