Vacancy increased slightly in the 12-million-square-foot metro Syracuse general purpose, multi-tenant office market in the second quarter of 2012, according to Reis. After finishing the first quarter at 15.4%, the rate increased to 15.8% in the second, up 20 basis points year-over-year. First Glance data from Reis indicate a third quarter rate of 15.6%. The Class A rate is reported at 11.1%, up 40 basis points over the quarter, and the Class B/C rate is reported at 18.1%, also up 40. The recent increases comes on the heels of 43,000 square feet of negative net absorption in the second quarter, unfortunately in keeping with this market’s generally poor demand profile. Although 70,000 square feet were absorbed in 2011, over 500,000 on the minus side were recorded for 2010, with lower but still negative annual totals before then. There has been no general-purpose office space completed so far in 2012 and none is expected for the rest of the year.
From 2012 to 2016 Reis forecasts new construction to total only 61,000 square feet. Even with minimal construction, net absorption is forecast to total negative 43,000 square feet by the end of the Reis forecast period. Thus Reis forecasts a 15.6% vacancy rate for year-end 2012, with slight increases to follow. However, despite the current occupancy travails, rents actually managed to post gains. Reis reports average asking and effective rents of $15.90 psf and $12.17 psf, up 0.6% and 0.7%, respectively, year-over-year and up 0.3% and 0.2%, respectively, for the second quarter. Effective rents are currently lower than what they were in the early 2000’s, and Reis forecasts several years of increases in the 1.0%-to-2.5% range through 2016.
Cushman & Wakefield reports a 20-basis-point increase in the vacancy rate to 20.9% in the second quarter, up from 20.7% a year earlier. This source reports a direct weighted lease rate of $15.09 psf, down 0.65% year-over-year.