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Bryan E. Cole
Bcole@naikeystone.com 610.370.8502 (direct) 610.370.8503 (e-fax)
This market report and data is assembled in house by Bryan Cole. All rights are reserved as this information has not been obtained by Public Sources. The report will be available on a quarterly basis by emailing marketing@bryanecole.com and subscribing to our mailing list.
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
Vacancy Rates
Class A Class B
The Greater Reading Suburban Office Market ended the 4th quarter 2012 with a vacancy rate for Class A Office buildings at 18.5%. This is a slight increase in vacancy rates from 3rd quarter 2012 and an increase in vacancy from same period 2011. The average rental rates remained steady at $16.00 $19.50 per square foot Modified Gross which is a slight decrease to the rates from the same period 2011. Deals of primary focus within Class A building sector were the 48,000 sf National Penn Bank location proposed at the Spring Ridge Corporate Center, which will be leased 100% to Nat Penn, and the new Fairfield Inn proposed along Meridian Blvd., is assisting to reduce the office vacancies by approximately 113,600 sf. The Fairfield Inn is purchasing three proposed office pad sites at 3 Meridian Blvd. The Class B Suburban office market ended the fourth quarter of 2012 with a vacancy rate of 18.98%. This is a decrease in vacancy from 3rd quarter 2012 by less then one percent, however it is an increase from the same period 2011 by almost four percent. The average rental rates remained unchanged from 3rd to 4th quarter 2012 at $11.00 - $16.50 per square foot modified gross opposed to that of rates from the same period 2011 which was $13.00 - $18.00 per square foot. Deals of primary focus within the Class B building sector were the new leases at 975 Berkshire Blvd. of 5,000 sf, and Stonepointe Center at 10,550 sf along with the recent purchase of 30,966 sf at 6 Commerce Drive by Brentwood Industries. And the Class C Suburban office market sector ended the 4th quarter of 2012 with a vacancy rate of 10.97% which was an increase from the 3rd quarter 2012. Our outlook for the office market going into 2013 is very optimistic with activity levels at new highs within the market place and owners offering additional incentives and concessions to assist in getting deals done.
Tour Activity
Net Absorption
Class A Class B
Concessions
Sales Volume
Asking Rents
Class A Class B
Construction
Class A Class B
Non Classified buildings include Hospital and Large Governmental institutions. Although we track these facilities, in our opinion we cannot accurately display vacancy rates when these facilities are used in the overall numbers.
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
Tenant perspective: (As a Tenant Representative) The Greater Reading market has experienced a high level of interest within the 4th quarter 2012, although activity is high and deals are steadily coming forward the A and B product is still offering incentives/concessions which have allowed Tenants to continue to capitalize on past market conditions. However moving forward especially in 2013, landlords will begin to limit the concessions and negotiate much harder on higher base rates. Tenants should begin to negotiate any leases that are within 18 months of expiration. This allows for enough room to negotiate and capitalize on the current conditions. Although the markets are improving and landlords will begin to lock in better terms, we feel the market will continue to be a Tenants Market into the late stages of 2013 based on current vacancies and leasing activity.
Landlord perspective: (As a Landlord Representative) Greater Readings recent activity will sway some landlords to think the market has turned around. Be cautious as we feel well into 2013 the market will maintain its Tenant Market status. Rates have been low over the past few years, so by offering free rent on the front end while maintaining higher base rates will not only provide tenants the ability to get into the space on a lower initial cost for year 1, it will allow landlords to maintain higher valuations on their assets since most Free Rent is outside the term. This allows landlords to still get effective 3, 5, or 7 year terms while limiting their exposure long-term. Interest rates will probably remain low well into 2013. This will allow tenants to finance TI themselves at sometimes better rates then landlords. This makes the Free Rent on the front end even more appealing to some tenants.
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
Tenant
Address
Submarket
SF
Type
National Penn Bank Anderson Insurance Brokers Regional Orthopedic Associates A to Z Vacuum Inspiritek
Spring Ridge Corporate Ctr Spring Township 1150 Berkshire Blvd. 975 Berkshire Blvd. 220 N. Park Road 1030 Reed Ave.
48,000
Wyomissing Boro 2,732 Wyomissing Boro 5,200 Wyomissing Boro 10,000 Wyomissing Boro 2,200
Address
Submarket
Buyer/Seller
SF
$ psf
6 Commerce Dr. 1235 Penn Ave. 10 - 12 Wingo Lane 1065 Woodland Road
Sherriff of Berks / Brentwood Industries Irmgard H. Barrett / EJ Penn Associates Wingco Development / Silveroak Properties Pen Trust / Wywood Realty Associates, LP
Dont forget to check: www.WyomissingOfficeSpace.com for more properties for Lease in Spring Township and Wyomissing Borough.
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
Property Name
Spring Corporate Campus - Building A Spring Corporate Campus - Building B Spring Corporate Campus - Building C Spring Corporate Campus - Building D Spring Corporate Campus - Building E Spring Corporate Campus - Building F 1001 James Drive Wyomissing Corporate Campus - Building C Wyomissing Corporate Campus - Building E 520 Van Reed Road White Pines Professional Center Hearthstone Court Spring Commons Wyomissing Professional Center Spring Ridge Corporate Campus Berkshire Court Meridian Blvd. - Building A Meridian Blvd. - Building B Meridian Blvd. - Building C Meridian Blvd. - Building D 20 Total Sites w/16 Available
City
Spring Twp. Spring Twp. Spring Twp. Spring Twp. Spring Twp. Spring Twp. Leesport Wyomissing Wyomissing Wyomissing Flying Hills Exeter Sinking Spring Wyomissing Spring Twp. Wyomissing Spring Twp. Spring Twp. Spring Twp. Spring Twp.
Zip
19609 19609 19609 19609 19609 19609 19533 19610 19610 19610 19607 19606 19608 19610 19610 19610 19610 19610 19610 19610
Meridian Condos 67,692 +/- sf of Single Story Office Condos. Located in Spring Twp. PA Total of 4 Buildings Proposed For Sale or Lease
Wyomissing Corporate Campus 169,000 Total Square Feet Located in Wyomissing PA 19610 3 Buildings Existing with 2 additional buildings proposed For Lease
Spring Corporate Campus 167,000 Total Square Feet Located in Spring Twp. PA 19609 6 buildings proposed with the smallest calculated at 6,000 sf. For Lease or Sale
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
including market.
Bryan E. Cole | Office & Medical Specialist Check Bryan Out on: 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com
Contact info:
Bryan Cole Office & Medical Specialist 610.370.8502 (direct) Bcole@naikeystone.com
www.Bryan-Cole.com
Bryan Cole
NAI Keystone Commercial & Industrial, LLC Exeter Ridge Corporate Center 3970 Perkiomen Avenue Suite 200 Reading, PA 19606 www.Bryan-Cole.com www.NAIKeystone.com