Rhode Island CRE market gains strength in 2012

The commercial real estate market in Rhode Island improved in 2012.

While the pricing aspect of commercial real estate has not been significantly changed during the first half of 2012, a report from Capstone Properties explained that there are many other signs that property management companies in Rhode Island have fared better to start the year.

Overall, the Ocean State had a vacancy rate of 9.2 percent during the first half of this year, Providence Business News explained, citing Capstone's midyear survey. There has also been a number of large office transactions through the state in the past several months.

"Sale and leasing activity in the first six months of the year was broader based and spread out over more categories and sizes," Neil Amper, vice president of Capstone, told the news source. "While we have not seen an increase in pricing, the re-entry of the smaller user makes us more optimistic than last year. Banks appear more willing to lend and some local companies have expanded and begun to occupy buildings that have been vacant for years."

The report did explain that there has been a lack of Class B office leasing throughout the first half of the year. This occurred even though there has been a large amount of this space available in some areas. Amper explained that this is partially due to a lack of space absorption. This has prevented significant price gains during the period.

In addition, the retail market has not had a significant change during this time period, the report noted. At the midway point of the year, retail vacancies were at 6.1 percent, which was the same as the midway point of 2011. Some of this may be due to retail chains in New England hesitating to expand in the current economic climate.

The food service sector has experienced the most impressive commercial activity, according to the report. This has occurred despite many vacancy issues throughout the state, including a sizable area in Warwick. In addition, the industrial market has experienced an impressive half of the year. A large property in Warwick spanning 50,000 square feet was recently leased, while there have also been a large number of leasing inquiries in the sector, as of late.

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