In his 40 years in commercial real estate in the Capital Region, Richard Sleasman says he has never seen the vacancy rate for industrial space as low as it is today.
CBRE-Albany, where Sleasman is chairman, calculated the first-half vacancy rate at 2% for an area stretching from Albany, Saratoga, Schenectady and Rensselaer counties to northern Warren County, south to County of Columbia and west of Fulton and Montgomery counties.
That’s half the rate seen during the January to June period just two years ago, and down from 2.7% at the end of 2020, according to the CBRE-Albany industrial market report released on last month.
The current rate of 2% is a record, “never reached” in the history of CBRE-Albany and its predecessor, dating back to 1979, Sleasman said.
The report also sets asking rental rates at new highs: $ 7.43 per square foot in Saratoga County, for example. Unlike today’s rates, $ 6 per square foot, which “was a crazy number” when it was first seen about five years ago, Sleasman said.
The records are not unique to the region, however; they are “ubiquitous” in the country, he said.
This is partly linked to demand: “Industrial” encompasses not only light and heavy manufacturing spaces, but also warehouses used for distribution and order fulfillment that companies today deem necessary to meet demand. growing appetite of online consumers.
We’re seeing this locally at Amazon, which opened a 1 million square foot distribution center in Rensselaer County last year. The online giant is also targeting two other large warehouses in the region and has hidden smaller facilities in the region – all to serve different stages of its delivery network.
While Amazon’s need for space may grab headlines, Sleasman said local industrial demand is also coming from so-called 3PLs – third-party logistics companies that move goods from other businesses – and small businesses. suppliers of household items such as plumbing, construction and lighting materials.
The flip side of vacancy, however, is the perception that there is no space available. Larger metropolitan areas readily object to this with domestic developers willing to build “to specification” – on speculation, with no tenants on hand.
But our developers are local and generally more conservative. Sleasman noted, however, that the Galesi group in Schenectady and Rosetti Development in Colonie dipped specifications to offer buildings without a full complement of tenants – which they subsequently signed off before the end of the contract. construction.
Sleasman said “adaptive reuse” can also increase the available space, as older buildings that were not in demand or buildings constructed for other purposes are redeveloped.
He pointed to Halfmoon’s former Sportsplex, built on Route 9 to provide indoor playgrounds, which was expanded and opened last month as the new headquarters and factory for robotics maker Precision Valve & Automation, which moved a few kilometers north of Colony.
Marlene kennedy is a freelance columnist. The opinions expressed in his column are his own and not necessarily those of the newspaper. Reach her at [email protected]
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