Boston Financial Data Services will be moving out of the American Express building
across from Providence Place after Jan. 1, 2005, leaving a large hole in the
city’s commercial real estate market that some say will be hard to fill.
Even with talk of Boston-based Investors Bank & Trust moving into half of the building – the company has reportedly reached a tentative agreement with the state Economic Development Corporation for two tax breaks – that still leaves roughly 60,000 square feet of available office space.
“Just the market itself (will prove problematic). The leasing market continues to be very soft,” said Michael Giuttari, president of NAI MG Commercial Real Estate in Providence. “It’s a large space, larger than the typical Rhode Island tenant and in an area that people are generally moving out of.”
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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Giuttari and others in the commercial real estate industry said it would be difficult to lease the 113,609-square-foot building to another large tenant, and that instead it would have to be broken up into smaller units.
Karl Sherry, partner of Hayes & Sherry Real Estate in Providence, which is brokering the lease, said either option would be viable.
The building, also called Gateway Center, has only been on the market for a couple of months, Sherry said. As to whether the interior design and layout of the building makes it difficult to rent, he said, “it hasn’t been on the market long enough to determine that.
“Any building built for one tenant is obviously going to be more difficult to split up than one that is designed for multiple tenants,” he said.
Sherry said he is optimistic that he and partner Peter Hayes will be able to secure another large tenant to occupy the entire four-story building, listed on the firm’s Web site with a lease rate of $27.50 per square foot. The building’s available square footage is broken down by floor. The second and third floors have about 30,000 square feet of office space; the first floor has almost 28,000 square feet and the fourth floor has nearly 23,000 square feet available. The building also has 150 subsurface parking spaces.
“We’re hoping to lease it to one large tenant, but it could be split up if we had to into smaller sections,” Sherry said. “It wouldn’t be difficult. It’s a modern building. It would be a little more expensive than having one user, though. It was built for one user.”
Sheldon Rodman, president of Rodman Real Estate in Providence, is also optimistic, and said Hayes & Sherry must market the property to the hilt to secure a tenant.
“Its prominent location dictates that it’s a main cog in the Waterplace and Capital Center area and it’s important that it be full,” he said. “It’s an important piece of real estate and we have to exhaust all resources to get it occupied.”
If the building were to be broken down, the size and configuration of each space would depend on the tenant, Sherry said, but added that he isn’t concerned.
“There’s no other space (like this) on the market in Providence,” he said. “This is the only large block.”
