NORTHEAST SNAPSHOT, MAY 2007
Albany, New York Retail Market
Albany’s commercial real estate market continues to be driven by the growing technology sector. Recent information released by the Census Bureau shows substantial population gains in all sections of the region, which supports the fact that the high-tech initiative is having positive impact in terms of both economic and demographic measures in Albany.
High-tech initiatives such as the impending development of the AMD chip fabrication facility in Malta, New York, just 22 miles north of Albany, have been a catalyst for development in other sectors of the market. This $2.5 billion investment will further the efforts being put forth from the University at Albany’s College of Nanotechnology and Sematech North and Tokyo Electronics, which have made substantial investments in the campus. The primary impact will be the creation of approximately 1,500 jobs on a direct basis for the chip fabrication plant and more than 2.5 times that in indirect employment opportunities. This influx of new residents to the area will have a distinct impact on the retail sector in Albany.
Due to this new demand, many more high-end retailers such as LL Bean, The Cheesecake Factory, PF Chang’s, and many of the other higher end food presentations are putting the Capital region on the map. LL Bean recently leased 30,000 square feet at Colonie Center and CVS/Pharmacy leased 13,500 square feet at 855 Central Avenue in Albany. Vacancy rates on Class A retail are under 3 percent, and overall, the market’s vacancy rate is slightly more than 4 percent. Rates in strip centers are typically approaching the low to mid $20s range for newer product and rates in well located, established centers are renewing at rates from the mid-teens to the high $20s range.
New retail developments and redevelopments are underway to meet the needs of the surging residential population. Some of the most active developers in the market have been Feldman Mall Properties, Schuyler Companies, BET Investments, First Columbia and Windsor Development. The majority of the new development currently being executed is taking place within the eastern portion of the market, specifically in Rensselaer County. As one of the fastest growing portions of the region over the last few years, this area was previously under-retailed and is now coming into its own due to the current demographics and the continued level of development enticing new retailers to the market.
The most significant project is the redevelopment and expansion of Colonie Center. With the addition of an entertainment module, which this center was previously without, there should be significant changes occurring related to the tenants that are attracted to the project along with new retailers coming into the market. All of the major announcements of new retailers have been focused around this redevelopment effort. A new project that has been 10 years in the making, as a result of extensive litigation by the NIMBY’s, has resulted in the confirmation of the rights to build Van Rensselaer Square in North Greenbush, New York. This 250,000-square-foot center, along with its 175,000-square-foot neighbor across the street, which is about to enter into the final approval process, will solidify the eastern portion of the capital region market, the second fastest growing sub-market in the Albany area for the last few years. The impacts of these projects will be seen for many years to come.
In the future, the submarkets surrounding the expected growth associated with the development of the AMD facility in Saratoga County will certainly fuel the need for goods and services to accommodate the new hires for the plant and its related industries. The Glens Falls region is also anticipated to experience substantial growth once the Luther Forest Tech Park begins to build out. The proximity of this market to readily developable land with public utilities and its proximity to the leisure time facilities of Lake George and the Adirondacks will in no doubt spell further growth for the Albany retail market.
— Howard Carr, is president of the The Howard Group/TCN Worldwide.
©2007 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.