Five Questions With: Jerry McDonough

JERRY MCDONOUGH, senior managing partner of Integra Realty Resources, believes Rhode Island's commercial real estate market is improving but is not a world-beater just yet. / COURTESY INTEGRA REALTY RESOURCES
JERRY MCDONOUGH, senior managing partner of Integra Realty Resources, believes Rhode Island's commercial real estate market is improving but is not a world-beater just yet. / COURTESY INTEGRA REALTY RESOURCES

Jerry McDonough, senior managing director of Integra Realty Resources, which has offices in Providence and Middletown, Conn., recently spoke with the Providence Business News about the mid-2015 market for Rhode Island commercial real estate. In a word, it’s quiet.

PBN: How would you characterize the Rhode Island office market? The national report published by IRR indicates most markets are in recovery. Where do we stand?
MCDONOUGH:
The office market in Providence is quiet. The dynamics for the general office market are changing. It’s been evolving over years. As you know, people are working from their cars, their houses and everywhere else. The conventional office space, it’s challenging. Your classic 3,000-square-foot space? That [market] is changing. Specialized offices and medical [space] will be here for a while.

PBN: When might rents increase enough to spur new construction? Are we close to approaching that tipping point?
MCDONOUGH:
I don’t think so. Unless things go absolutely crazy in Boston, and we begin to see a lot of push back. And people are recognizing Rhode Island is a nice place to live, there’s an easy commute.

PBN: The retail market outlook seems similar to the office market, stable but notable gains aren’t expected in the near future. What will it take to increase demand? Sustained wage growth or population growth?
MCDONOUGH:
It’s both. The big problem we have is we have a million people. The southern part of Dallas has that many people. We’re trying to make these comparisons, but our population sample is [too small].

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PBN: So that is the biggest challenge, it’s not income, but population?
MCDONOUGH:
It is. And why do we need 39 towns and cities?

PBN: Why does that affect retail business?
MCDONOUGH:
With retail, it’s a localized market. Are South County people going to drive up to Providence to go shopping, Newport? I doubt it.

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