NORTHEAST SNAPSHOT, FEBRUARY 2006
Syracuse, New York Office Market
The Syracuse, New York, office market remained relatively stable over the last 6 months of 2005. Vacancy rates for office space has stabilized at approximately 14 percent throughout the Class A and Class B sectors in the downtown and suburban submarkets. In the same sectors, rental rates are averaging out to approximately $15.25 per square foot. Please see the accompanying chart, “Current Trends in the Syracuse, New York, Office Market,” for a broader snapshot of the market statistics.
In addition, office development has been trending toward the construction of smaller office buildings designed for occupation by medical, engineering and high tech users, while the development of very large office buildings currently is on a decline.
Significant developments directly affecting the Syracuse office market include the Syracuse Center of Excellence in Environmental and Energy Systems building, which is an extraordinarily designed six-story building located near the center of Syracuse. The development is a combination building for the study of office environments, a research facility in which Syracuse University and Carrier Corporation will study various office conditions and how that environment affects people and the community. COR Development, while traditionally developing retail shopping centers and only recently delving into office projects, continues to construct Collamer Crossing in the eastern suburbs, where it recently completed a 130,000-square-foot build-to-suit project for Sensis Corporation. In addition, COR will break ground this spring on a 50,000-square-foot speculative office project at Collamer. Furthermore, Bill Adams, a new developer to the area, is constructing four buildings each encompassing 10,000 square feet at Colonial Village Park, a significant development in the northern suburbs. The park derives its name from the buildings' design, which have a colonial type feel, one is brick, another is Pennsylvania blue stone, etc. These spaces appeal to medical practices and other smaller users as opposed to large corporations.
Generally, a majority of office development has been occurring in the eastern suburbs near the intersection of routes 298 and 481, and in the northern suburbs near the junction of routes 57 and 31. Both of these areas have in common a close proximity to residential growth, and good highway access with sewers and utilities available.
While no single type of tenant is absorbing a majority of space in the Syracuse office market, several large leases have been signed recently that have impacted the sector significantly. In addition to Sensis Corporation's absorption of 130,000 square feet at Collamer Crossing, which is located at the intersection of routes 298 and 481, Aspen Dental Management has leased 44,500 square feet at Route 298 and New Venture Gear Drive, and Rapid Resource is occupying 38,000 square feet at 400 West Division Street near the center of Syracuse.
— Paul Roach is a senior associate with CB Richard Ellis in Syracuse, New York.
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