Neal Amper, vice president of Capstone Properties Inc. in Providence, annually writes a report that summarizes market activity in Rhode Island. He spoke to the Providence Business News this week about midyear trends in 2019.
PBN: In your 2018 report, you noted that retail had a substantial increase in the size and dollar volume sold. Are you still seeing additional absorption this year?
AMPER: That’s a two-sided question. Most of the … national or regionals are all here. There are very little new retailers coming on the scene. The Family Dollars and the Dollar Trees and the like are always looking for new locations, but the smaller users – the 2- to 3,000 square feet [spaces], they tend to be hard to fill.
PBN: Is that because small retailers have moved online?
AMPER: That’s certainly a contributing factor. The bigger boxes – for instance, Raymour & Flanagan – went into Rhode Island Mall. Sears is gone. Raymour & Flanagan is there. That’s been typical of retail now, where people will switch to better locations, chase a better location. If you have a choice to go to the Rhode Island Mall or something up Bald Hill Road on a Saturday, you’re going to pick the Rhode Island Mall.
PBN: Are you still seeing absorption even if big-box retailers aren’t filling the entire space left behind?
AMPER: Yes, there is some absorption. It’s not big. We’ve seen the contraction has affected the sales prices, too. It’s lowering them. As spaces go vacant, they are not replacing the tenants with the same rental or lease value. If the leases go down, the value of the property goes down.
PBN: In office space, what is happening in the suburbs compared to the city?
AMPER: It’s a different kind of workforce downtown. We had some people move in from out of town and specifically wanted to be downtown near the train station, in the Providence Journal Building. They found a retrofitted building in the city center, within walking distance of the train, was a good place to be.
Now, rents in downtown, because of the cost of taxes and maintenance, [are] more expensive than in the suburbs. You might have $17 a square foot downtown for office space, but you might have [another] $8 a square foot between taxes and maintenance and parking. If someone has 2,000 square feet, and they go to Jefferson Boulevard, they might get $17 a square foot for space, plus electricity and heat and free parking.
PBN: Do businesses that locate in the suburbs tend to draw their workforce from people living out there?
AMPER: It’s a mix. There are 4,500 people living downtown. Can they draw from that workforce? I don’t know the demographics of it, but probably. It’s an evolving workforce in both the suburbs and the city.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
