Kenneth Dill is principal of Cresa Providence, a commercial real estate advisory firm that specializes in tenant representation. The company exclusively advises commercial tenants, not landlords or developers, and says that focus provides a conflict-free advantage for tenants.
PBN: When did Cresa expand into Providence and why has the company moved into the Rhode Island market?
DILL: Cresa Providence entered the market in August 2009 in order to fill a vacuum in the market. Prior to Cresa Providence, there was no commercial real estate firm in the Rhode Island market that exclusively served tenants. This situation creates a very insular marketplace that is tilted heavily in favor of landlords.
PBN: What is the advantage to a business of choosing a commercial real estate company that focuses on tenants exclusively?
DILL: All of our competitors in the Rhode Island market are so-called “full service” real estate firms, meaning that they represent both tenants and landlords. Therefore, when representing a tenant, they have an inherent conflict of interest, either because of an existing relationship with the landlord or because of a desire for a future relationship with the landlord. When you represent the landlord, or hope to in the future, you are less likely to push for every possible concession on behalf of the tenant. As a firm that never represents landlords, Cresa Providence never has to question whose interests to put first – it is always our clients, tenants, who get our full and undivided expert attention. At Cresa, our focus is on integrity and customer service. Again this year we were rated No. 1 in client satisfaction by a wide margin. This rating is the result of annual interviews of real estate executives by The Watkins Research Group.
PBN: What kinds of properties are you involved in leasing, or selling? Is it primarily office or also industrial?
DILL: We represent clients who are users of all areas of commercial real estate: office, industrial/warehouse and retail. On a percentage basis, our business mix reflects the market – primarily office, with smaller portions of industrial/warehouse and retail. Our clients range in size from small businesses and startups to large multinationals and with over 50 offices across North America and offices around the globe. We are able to serve our clients wherever they have real estate needs.
PBN: What is the greatest challenge about the Rhode Island market in 2016? Is there sufficient movement among companies?
DILL: The market is much improved compared to two or three years ago. Tenants are demonstrating more optimism about the future and a willingness to plan for expansion as the general economic climate continues to improve. We continue to battle a perception and the reality of Rhode Island being an expensive and difficult place to do business, but the new leadership at the state and city level has engendered some excitement and hope that those things will continue to improve. The perception of limited parking in downtown Providence continues to be a major barrier, as does the relatively limited inventory of larger (10,000 square feet or more) Class B+ or Class A office spaces in the market. Most companies are in smaller spaces than 10,000 square feet, but larger users who want to come to Rhode Island don’t have many choices if they want suites of 10,000 square feet or larger. Landlords are demonstrating that there is a pent-up desire to increase rental rates after the long period of economic instability, and we continue to battle that trend on behalf of our clients.
PBN: What is your outlook for 2016 in this market? Will absorption continue slowly in office space?
DILL: We believe that the market will continue on its current trajectory for the remainder of the year – steady improvement, but not explosive growth in the office sector. The inventory of available industrial/warehouse space is quite limited, so we expect rates to increase in that sector, and that there will be a limited number of new industrial buildings under construction over the next 12 months, which represents growth relative to the last few years.
