NORTHEAST SNAPSHOT, MAY 2005
Rhode Island Office Market
That Rhode Island office market has shown continued signs of growth, although it may be sporadic, says Don Morash Jr., a broker and the owner of Abbott Properties in Warwick, Rhode Island. “I see a lot of smaller users looking for space as their companies grow and expand,” he adds. “There have not been many of the larger national companies coming into the state.
“I think Rhode Island is a viable submarket of Boston. Its proximity to airports, highways and New York as well as Boston make it a likely market for continued growth,” says Morash. But with land currently at a premium throughout the state, he doesn’t believe there will be an upward trend in office development similar to those seen in some of the bigger Northeast markets.
Development is spotty throughout the state and is not concentrated in a specific market. There is a significant office development in Warwick near Rhode Island’s T.F. Green Airport and new Warwick train station that has generated sufficient interest and should fill up quickly. The Jefferson Office Park, which is underway near the airport, comprises two buildings totaling 120,000 square feet. Approximately one-third of the space has been leased, although it is too early to disclose signed tenants. The new office park is fetching rents in the mid-$20-per-square-foot range.
In Providence, GTECH will soon be a major tenant once its new world headquarters facility is completed. The 210,000-square-foot build-to-suit project is expected to deliver in 2006.
Rental rates for Class A suburban office space currently range from $18 to $25. Morash estimates suburban vacancies to be approximately 10 percent. In the more populated markets such as downtown Providence, rents range from $25 to $32. The vacancy rate in the downtown districts is approximately 8 percent.
The rental market has been slow for most property types. However, the demand for office condos among users with small space requirements is active, with all available space selling quickly.
“I am optimistic that we will continue to see slow, steady growth in the Rhode Island markets,” says Morash.
Though it is relatively light in Rhode Island right now, development and leasing activity is continuing in pockets throughout the state. Vacancies are marginal, and new, modern space is being absorbed quickly. The state should continue to draw smaller businesses seeking space in close proximity to the major Northeast business hubs and with strong transportation infrastructure.
©2005 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
of this article contact Barbara
Sherer at (630) 554-6054.