Yet available space drops with buildings turned to residences
A recent real estate survey shows that downtown Providence has more office space available for lease than a year ago, even though this year’s stock was reduced by 9.5 percent as developers convert office buildings into housing and retail spaces.
Hayes & Sherry Real Estate Services’ Providence Office Market Survey 2004 found that the vacancy rate for downtown office space jumped from 7.3 percent to 8.6 percent from 2003 to 2004. It went from 517,150 square feet available last year to 552,044 square feet as of May.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
“It’s a reasonable vacancy rate,” said Karl F. Sherry Jr., a partner at the Providence commercial real estate firm. “I wouldn’t say it’s high, I wouldn’t say it’s low.”
The vacancy rate would have remained about the same, Sherry said, had Boston Financial Data Services not vacated the 114,000-square-foot Gateway Center on American Express Boulevard in January.
“In an (office) market as small as this,” he noted, “you really have to analyze the numbers and find out why they are lower from year to year.”
Once the Gateway Center finds a tenant, though, available office space will be in short supply, Sherry said. He attributed decreasing office vacancies in past years to the relatively small size of the market and lack of office construction.
Sherry indicated, however, that the new GTECH headquarters under construction downtown will consist of an additional 55,000 square feet for lease to other companies. The project adds a total of 210,000 square feet of office space to the downtown market. Beyond that, the survey says an additional 180,000 square feet of office space is proposed for construction in the downtown area.
While new office space increases, according to the study, older office buildings are fast becoming residential space. In fact, the total square footage of office space in downtown fell from 7.1 million to 6.4 million in the past year.
“We have a trend here in the last several years, that these historic downtown office buildings are being converted into residential space,” Sherry said.
Development firm Cornish Associates has led the way in restoring mostly vacant office space in historic downtown buildings, converting them into residential and retail spaces, according to the firm’s Web site. The firm’s projects, such as refurbishing the circa-1870 Burgess O’Gorman Building on Westminster Street, will add hundreds more residential units to the downtown area.
Sherry said his firm’s market survey represented vacancies in the office market as of May 2005.
The survey excluded owner-occupied office buildings, and only took stock of buildings available for lease.
Hayes & Sherry has no financial stake in either the Gateway Center or the new GTECH headquarters, Sherry confirmed.
