3rd Qtr. 2012 Downtown Report by Bryan Cole

7/28/2019 3rd Qtr. 2012 Downtown Report by Bryan Cole

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Downtown O ce Market ReportDowntown O ce Market Report -- by Bryan Coleby Bryan Cole

20122012 -- 3rd Qtr. Update3rd Qtr. Update Reading, Berks County Pennsylvania

Downtown O ce Market ReportDowntown O ce Market ReportDowntown O ce Market Report

www.Bryanwww.Bryanwww.Bryan ---Cole.comCole.comCole.com

Committed to Greater Reading.

Connected to the W orld.


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Downtown O ce Market ReportDowntown O ce Market Report -- by Bryan Coleby Bryan Cole

From the Authors Desk

Bryan E. Cole

Broker

[email protected]

610.370.8502 (direct)

610.370.8503 (e -fax)

This report provides an overview of the current o ce market condi ons in Suburban Berks CountyPennsylvania. NAI Keystone maintains a comprehensive list of all available proper es within theBerks County marketplace, including but not limited to; available space, number of facili es in mar-ket, asking rents, incen ves, extra costs, etc The informa on that NAI Keystone has assembled isseparated by Class A and Class B facili es and consists of market data such as, absorp on rates,vacancy rates, asking rents, etc

This market report and data is assembled in house by Bryan Cole. All rights are reserved as thisinforma on has not been obtained by Public Sources.

The report will be available on a quarterly basis by emailing us at marke [email protected] andasking to subscribe to our mailing list.

2012

Bryan E. Cole Resume

Bryan joined NAI Keystone in July of 2004, but before joining NAI, Bryan Cole spent 4 years ac veduty in the U.S. Marine Corp, including a 6 month deployment in Afghanistan, a 4 month deploy-ment in Kuwait/Iraq, and a 7 month deployment in Japan. Prior to joining the military Bryan wasinvolved in the construc on of commercial and mul -unit proper es in the Philadelphia sub-urbs. Bryan has experience working with a diverse group of individuals in numerous countries

throughout the world. During Bryans me at NAI, he has sold in the excess of $250 Million Dollarsworth of Commercial Real Estate, and leased hundreds of thousands of square feet of industrial ando ce/medical space. Because of this, Bryan earned NAI gold club status his rst year in the busi-ness which is presented to approximately 75 - 100 brokers within the NAI Global network, which iscomprised of over 8,000 Brokers. Bryan is currently working on earning both his CCIM designa onand SIOR designa on. Bryan has been NAI Keystone's Top Performer from 2006 - 2011.

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Bryan E. Cole | O ce & Medical Specialist

610.370.8502 (d) | www.Bryan -Cole.com | [email protected]


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Total Blocks of Space (Can be Demised)

Size

# of Bldgs.

Class

A Class

B Class

C Total

0 - 4,999 2 1 3 6

5,000 - 9,999 5 4 9

10,000 - 19,999 1 2 3

20,000 - 39,999 1 3 1 5

40,000 - 74,999 1 1 2

75,000 - Greater 1 1 1 3

NAI Keystone - Bryan Cole Downtown O ce Market Report 3rd Qtr. 2012

OVERVIEW:

The Downtown City of Readings 3rd Quarter overall o ce market was much like the similarperiod of 2011 and the rst half of 2012.

The largest addi ons to the overall vacancies in Class A facili es were at 401 Penn Streetand 201 Penn Street, which caused Class A vacancy rates to sky rocket from 2011 into2012. Due to the current economic climate and overall interest in the City, these buildingsremain vacant.

Overall Vacancy Rates for Class B/C buildings remained unchanged throughout 2012 howev-er, various buildings previously tracked as Class B buildings were changed to Class C build-ings, due to re -evalua ng the assets and condi ons.

There is over 523,000 sf. of vacant space located within Class A & Class B buildings and anaddi onal 272,000 sf. available in Class C product. Vacancy rates will con nue to climb if Tenants con nue to relocate out of the city into thesuburbs.

In the event C.N.A relocates its en re opera ons., Another 80,000 sf. +/ - will be added tothe overall high vacancy.

Downtown City of Reading vacancy rates for Class A buildings is 22.96% with Class B build-ing es mates at 22.08% and Class C vacancy rates at 20.35%

Concessions and Incen ves including free rent, high tenant improvement allowances andmoving allowances are some ways landlords are ge ng crea ve to assist in landing quality

long term tenants.

For Full Ar cle visit h p://bryan -cole.com/MarketIntel.html

3rd Qtr. TRENDS Vacancy Rates

Class A Class B

Net Absorp on

Class A Class B

Asking Rents

Class A Class B

Construc on

Class A Class B

Other Trends

Tour Ac vity

Concessions

Sales Volume

# of Proper es

for Sale

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NAI Keystone - Bryan Cole Downtown O ce Market Report 3rd Qtr. 2012

Current Rental Rates

Year Class A Class B

2011 $13.00 - $15.00 (MG) $10.00 - $13.00 (MG)

EO 1st Qtr. 2012 $13.00 - $15.00 (MG) $9.00 - $13.00 (MG)

EO 2nd Qtr. 2012 $13.00 - $15.00 (MG) $9.00 - $13.00 (MG)

EO 3rd Qtr. 2012 $13.00 - $15.00 (MG) $10.00 - $13.00 (MG)

Number of Buildings Tracked

Loca on

Downtown Total 229 Buildings

Class A 8 Buildings

Class B 41 Buildings

Class C 180 Buildings

Tenant perspec ve: (As a Tenant Representa ve)

The Greater Reading market has experienced a high level of vacancy in its Class A and B product and increased incen ves/concessions which have allowed Tenants to capitalize on thecurrent market condi ons.

Within the past 18 months Tenants have been able to lock infavorable rates, while obtaining leases with early out clausesin the event their long term commitments do not pan out.

Tenants should begin to nego ate any leases that are within18 months of expira on. This allows for enough room to ne-go ate and capitalize on the current condi ons.

The market will con nue to be a Tenants Market into thelate stages of 2013 based on current vacancies and leasingac vity.

Landlord perspec ve: (As a Landlord Representa ve)

Greater Readings recent ac vity has brought numerous ten-ants to the market place allowing landlords to get aggressive,now that tenants are star ng to commit rather then KickTires.

Landlords understand the value of maintaining their tenantbase even in the event of reducing their base rents and o er-ing addi onal TI dollars.

Overall the market has seen the majority of the ac vity sur-rounding Medical and Large Opera ons centers.

Most recently Na onal Penn Bank announced they will beconstruc ng a 48,000 sf. facility in Spring Twp.

Although the market will most likely be a Tenants Marketthrough 2013. Increased ac vity and deals being consummat-ed are encouraging.

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NAI Keystone - Bryan Cole Compe ve Set - Con guous Blocks of Space

Largest Blocks of Space VacantSF

Building

Class

401 Penn Street 180,000 Class A

201 Penn Street 40,690 Class A

400 Washington Street 35,579 Class A

35 N. 6th Street 75,000 Class B

501 Washington Street 46,595 Class B

443 Penn Street 37,740 Class B

230 N. 5th Street 30,000 Class B

645 Penn Street 24,889 Class B

Parking for the City of Reading

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Absorp on (Net)

The change in occupied space in a given me period.

Available SquareFootage

Net rentable area considered available for lease;excludessubleasespace.

Average Asking RentalRate

Rental rate as quoted from each buildingsowner/managementcompany, For o ce space, a full servicerate wasrequested; for retail, a triple net rate requested; for

industrial,a NNbasis. Building Class

Class A Product is o ce Spaceof steel and concreteconstruc on, built a er 1980, quality tenants, excel-lent ameni es & premium rates. Class B product iso ce Space built a er 1980, fair to good nishes &wide range of tenants.

DirectVacancy

Space currently available for lease directly with thelandlord or buildingowner.

Market Size

Includesall exis ng and under construc on o cebuildings(o ce, o ce condo, o ce lo , o ce med-ical, all classes and all sizes, both mul-tenant andsingle-tenant, including owner-occupied build-ings) within eachmarket.

OverallVacancy

All unoccupied lease space, either direct or sublease.

SF/PSF

Square foot/per square foot, used as aunit of measurement.

Sublease

Arrangement in which a tenant leases rental property to anoth,and the tenant becomes the landlord to the subtenant.

Sublease Space

Total square footage being marketed for lease by the tenant.Sublease space is not considered in the overall occupancy or asorp on numbers - only direct leases areincluded.

SubleaseVacancy

Space currently available in the market for sublease withanexis ng tenant within a building ac ng as the landlord.

NAI Keystone - Bryan Cole Methodology/De ni ons/Sub Market Map

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Contact info: Bryan Cole

O ce & Medical Specialist

610.370.8502 (direct)

[email protected]

www.Bryan -Cole.com

Check Us Out on:

Look for our marketing material

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

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3rd Qtr. 2012 Downtown Report by Bryan Cole