Office Rents Bloom with Spring
(5/10/2010) (from conntact.com)
NEW HAVEN - Office rents are starting to rise in the Elm City, amid a shrinking inventory of available space, and new office construction is on the horizon. In his New Haven Office Market Report for the first quarter of 2010, John Keogh of Colliers Dow & Condon reports that Keith Mahler, who now has control of 59 Elm Street, is asking $21.50 per square foot plus electric for space in the Class B building, up from $17.50. In late 2009, the New Boston Fund, owner of 545 Long Wharf, a Class A building, raised rates from $26 to between $27 and $30 per square foot.
Rates are mostly holding steady elsewhere, with Class A deals downtown ranging from $22 per square foot to the mid $30s and Class B space available outside the central business district in the mid-teens or even lower. Concessions are becoming scarcer during negotiations.
In the Central Business District (CBD) the vacancy rate is 10.4 percent for Class A space and 8.2 percent for Class B, but the overall rate for downtown buildings will plummet to 6.9 percent if 205 Church Street (the former Union Trust) becomes a hotel.
Plans for new office space are under development, and on a grander scale than the last big project in 2002, when David Beckerman built a 60,000-square-foot building at Audubon and State streets.
Winstanley Enterprises has two projects in the works, a 400,000-square-foot office and medical building at 100 College Street and a mixed-use development including as much as 200,000 square feet of office space at Science Park, which probably will be developed with Forest City Enterprises. Financial-services provider Higher One is expected to occupy most of the office space.
Keogh notes three major leasing deals during the first three months of 2010, which were all relocations from buildings in the New Haven market.
Accounting firm Meyers, Harrison & Pia leased 13,000 square feet at 1 Audubon Street, Smith Barney/Morgan Stanley took 15,000 square feet and Prometheus Research leased 12,000 feet at 55 Church Street
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