Greater Reading Market Information

Transcription

1 - By Bryan Cole Committed to Connected to the W Greater Reading

2 Bryan E. Cole 2012 This report provides an overview of Greater Reading and Employment Information. NAI Keystone maintains a comprehensive list of all available properties, and market conditions within the Greater Reading marketplace, including but not limited to; available space, number of facilities in market, asking rents, incentives, extra costs, etc The information contained in this report was courtesy of The Greater Reading Economic Partnership (GREP), Bryan Cole of NAI Keystone. Bryan E. Cole Broker Bcole@naikeystone.com (direct) (e-fax) Bryan Cole of NAI Keystone maintains a comprehensive list of all available properties within the Berks County marketplace, including but not limited to; available space, number of facilities in the market, asking rents, incentives, extra costs, etc The information that NAI Keystone has assembled is separated by Class A and Class B facilities and consists of market data such as, absorption rates, vacancy rates, asking rents, etc This market report and data is assembled in house by Bryan Cole. Bryan E. Cole Resume Bryan joined NAI Keystone in July of 2004, prior to joining NAI, Bryan Cole spent 4 year s active duty in the U.S. Marine Corp, including a 6 month deployment in Afghanistan, a 4 month deployment in Kuwait/Iraq, and a 7 month deployment in Japan. Prior to joining the military Bryan was involved in the construction of commercial and multi-unit properties in the Philadelphia suburbs. Bryan has experience working with a diverse group of individuals in numerous countries throughout the world. During Bryan s time at NAI, he has sold and leased in the excess of $290 Million Dollar s worth of Commercial Real Estate. Because of this, Bryan earned NAI gold club status his first year in the business. Bryan is currently working on earning both his CCIM designation and SIOR designation. Bryan has been the Top Performer/Producer at NAI since 2006 with an average of $30-$35 Million in production annually, and over $64 Million in Bryan has concentrated his efforts on medical/office property along with Big Box industrial. Personal Memberships: NAI (New America International) Veterans of Foreign Wars PA Assoc. of Realtors NAI Office Council CoreNet Global National Assoc. of Realtors NAI Retail Council Young Professionals Network Commercial Industrial Council of Berks CIC Board Member (2007) Chapter President of NMCBN Berks Chamber of Commerce NAI Gold Club ICSC Member NAI Corporate Services Council CCIM Candidate SIOR Candidate WERC TriState Board or Realtors Council of Supply Chain Management NAIOP Member Greater Reading Economic Partnership The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.

3 Location Few locations on the East Coast offer a more central location than Greater Reading, with easy access to markets, hubs and major cities in the Mid-Atlantic and Northeast. Philadelphia is just 50 miles to the southeast, and New York and Washington are a little more than 100 miles away. Greater Reading is an affordable location too, with occupancy costs among the most attractive of any comparable area in the eastern region. Over 100 million people within an overnights drive Class-A office buildings, industrial parks, manufacturing sites and prime retail locations Reliable electric grid Good management relations Strong and pro-active economic development groups Road Systems: Routes 222, 61, and 422 are main state roads through Greater Reading, connecting Reading and its suburbs with the Lehigh Valley (Allentown/Bethlehem/Easton) to the north and east and Central Pennsylvania )Lancaster/York/ Harrisburg) south and west. I-78, I-476, and I-76 are interstates connecting Greater Reading to the rest of the region. Greater Reading is home to such companies as Carpenter Technologies, Penske Corp., East Penn Manufacturing, Godiva, and Boscov s stores. Take advantage of a diverse workforce and a great lifestyle. Greater Reading is naturally beautiful and family oriented. Its diverse community lifestyle means there s something for everyone. In addition, residents enjoy a much lower cost of living then those of neighboring metropolitan centers. The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.

4 Market Data Wage Information and Employee Availability in Greater Reading The Greater Reading community obtained an assessment from a site selection consultant on workforce availability, which confirmed a local CareerLink assessment and provided some additional empirical data. According to their evaluation: The metro Reading labor market could accommodate another 4,100 customer related positions (FTEs) As a rule of thumb, labor saturation is reached when call center employment exceeds 3% of the civilian labor force Metro Reading s labor force is 202,300 At 3%, the market could likely sustain a call center base of 6,100 Looking over the employer roster, the best estimate is that current call center employment approximates 2,000 FTEs. This leaves excess capacity of about 4,100 A new call center paying market competitive wages would be able to sustain an HR level in at least the 750 FTE range The estimated white collar underemployed pool (employment in lower wage occupations) is about 15,000+/- A new employer would likely be able to find 5% of that total to be well-qualified This translates into 750 additional positions As a buffer, a new call center could also draw from: The unemployed - 7.9% or 16,000 people Annual college graduates Two Year 700 Four Year 3,500 Total 4,200 Availability of a bilingual workforce Population ages is roughly 264,000 About 6% of metro population ages is bilingual (English/Spanish according to the US Census) The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.

5 Market Data cont. At 6%, this equates to 15,800 bilingual working age adults Tapping only 1% of this pool would allow a new employer to staff about 150 bilingual positions The CareerLink is a one-stop workforce development system comprised of a partnership of several public and private workforce development agencies. They offer a variety of employer and employee support services including: play a role in filling 2nd, 3rd, and weekend shifts at a call center. Below are the current enrollment numbers for each of our higher education institutions. Albright College 2,358 Alvernia University 2,906 Kutztown University 10,634 Penn State University 2,759 Reading Area Community College 5,425 Screening and referral of applicants to employer specifications Information on hiring incentives such as tax credits and new-hire training programs Specialized recruitment, including management of large recruitment campaigns Recruitment facilities (meeting rooms and private office) for daily rental WorkKeys Functional and Personal Skill Assessments for applicants and incumbent workers WorkKeys Profiling to better assess skill needs of specific jobs Wage and workforce availability confirmation was also obtained from one of the community s premier employment agencies, Gage Personnel. Lastly, employer surveys annually conducted by Greater Reading Economic Partnership of call center operations in Berks County, confirmed the following ranges: Entry-Level: $11-12/hr Mid-Level: $12-14/hr Senior-Level: $15/hr Pay rates for a supervisor in a call center are in the $45-55K range. The CareerLink partners assessed that an employer would need to pay an $11/starting wage, with increases based on performance. They believe that there will be second-income individuals and single parents applying for customer service positions. For bilingual needs, the applicant pool will be strong. If a high school diploma is not required, the applicant pool would be even greater because there are very capable people in our community who lack that credential but would be good employees. The CareerLink website can act as one of the bases for recruiting as well as the physical office if there is a desire to do paper applications. CareerLink also offers pre-employment assessments for example, providing a short script that they ask folks to read. Additionally, Greater Reading Economic Partnership confirmed that students at the five local colleges and universities could Summary The wage rates contemplated throughout the entire evaluation was a salary of $11.50 as a starting point for employees. This salary would be competitive and attract a stable employee base for these type of positions. A bilingual workforce will be available in Greater Reading due to the large Latino population and correspondingly available workforce. The Commonwealth of Pennsylvania, the PA Career- Link office, and the Greater Reading Economic Partnership and its workforce partners can offer support and substantive resources for new employee recruitment and training. The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.

6 Office Report for the End of 2012 Greater Reading Office Market Overview End of 2012 Report The Greater Reading Suburban Office Market ended 2012 with a vacancy rate for Class A Office buildings at 18.5%. This is a slight increase in vacancy rates from 3rd quarter 2012 and an increase in vacancy from same period The average rental rates remained steady at $ $19.50 per square foot Modified Gross which is a slight decrease to the rates from the same period Deals of primary focus within the Class A building sector in 2012 were the 48,000 sf National Penn Bank location proposed at the Spring Ridge Corporate Center, which will be leased 100% to Nat Penn, the new Fairfield Inn proposed along Meridian Blvd., the Fairfield Inn is purchasing three proposed office pad sites at 3 Meridian Blvd, and the 30,000 sf leased to Digestive Disease Associates and BCDH at the Wyomissing Corporate Campus. The Class B Suburban office market ended 2012 with a vacancy rate of 18.98%. This is a decrease in vacancy from 3rd quarter 2012 by less than one percent; however it is an increase from the same period 2011 by almost four percent. The average rental rates remained unchanged from 3rd to 4th quarter 2012 at $ $16.50 per square foot modified gross opposed to that of rates from the same period 2011 which was $ $18.00 per square foot. Deals of primary focus within the Class B building sector in 2012 was the purchase of 210 George Street in Muhlenberg Township, a building consisting of approximately 40,000 and bought by the Municipality for their operations center, and the purchase of 6 Commerce Drive consisting of approximately 30,966 sf. which was purchased by Brentwood Industries and will be home to their new Headquarters. The Class C Suburban office market sector ended 2012 with a vacancy rate of 10.97% which was an increase from the 3rd quarter 2012 and similar to the same period Our outlook for the suburban office market going into 2013 is very optimistic with activity levels at new highs within the market place and owners offering additional incentives and concessions to assist in getting deals done. The Greater Reading Downtown Office Market ended 2012 with a vacancy rate for Class A Office buildings at 22.96%. There was no change in vacancy rates from 3rd quarter 2012; however it was a significant increase from the same period The average rental rates slightly decreased from 3rd to 4th quarter 2012 at $14.00 per square foot Modified Gross to $13.50 per square foot Modified Gross. The largest additions to the overall vacancies in Class A facilities were at 401 Penn Street and 201 Penn Street, which caused Class A vacancy rates to sky rocket from 2011 into Due to the current economic climate and overall interest in the City, these buildings remain vacant and are still taking a toll on the overall vacancy rate within Downtown. The Class B Downtown office market ended 2012 with a vacancy rate of 22.08%. There was no change in vacancy rates from 3rd quarter 2012, and it was a slight increase from the same period The average rental rates dropped from $11.50 per square foot Modified Gross in the 3rd quarter 2012 to $10.00 per square foot Modified Gross in 4th quarter 2012 this is also a slight decrease to the rates from the same period By Bryan Cole, NAI Keystone Commercial & Industrial, LLC Bryan E. Cole Office & Medical Specialist (d) Bcole@naikeystone.com Check Bryan Out on:

7 Suburban Office Report Vacancy Rates Net Absorption Asking Rents Construction The Greater Reading Suburban Office Market ended the 4th quarter 2012 with a vacancy rate for Class A Office buildings at 18.5%. This is a slight increase in vacancy rates from 3rd quarter 2012 and an increase in vacancy from same period The average rental rates remained steady at $ $19.50 per square foot Modified Gross which is a slight decrease to the rates from the same period Deals of primary focus within Class A building sector were the 48,000 sf National Penn Bank location proposed at the Spring Ridge Corporate Center, which will be leased 100% to Nat Penn, and the new Fairfield Inn proposed along Meridian Blvd., is assisting to reduce the office vacancies by approximately 113,600 sf. The Fairfield Inn is purchasing three proposed office pad sites at 3 Meridian Blvd. The Class B Suburban office market ended the fourth quarter of 2012 with a vacancy rate of 18.98%. This is a decrease in vacancy from 3rd quarter 2012 by less then one percent, however it is an increase from the same period 2011 by almost four percent. The average rental rates remained unchanged from 3rd to 4th quarter 2012 at $ $16.50 per square foot modified gross opposed to that of rates from the same period 2011 which was $ $18.00 per square foot. Deals of primary focus within the Class B building sector were the new leases at 975 Berkshire Blvd. of 5,000 sf, and Stonepointe Center at 10,550 sf along with the recent purchase of 30,966 sf at 6 Commerce Drive by Brentwood Industries. And the Class C Suburban office market sector ended the 4th quarter of 2012 with a vacancy rate of 10.97% which was an increase from the 3rd quarter Our outlook for the office market going into 2013 is very optimistic with activity levels at new highs within the market place and owners offering additional incentives and concessions to assist in getting deals done. Tour Activity Concessions Sales Volume # of Properties for Sale For Full Article visit Non Classified buildings include Hospital and Large Governmental institutions. Although we track these facilities, in our opinion we cannot accurately display vacancy rates when these facilities are used in the overall numbers. Bryan E. Cole Office & Medical Specialist (d) Bcole@naikeystone.com Check Bryan Out on:

8 Suburban Office Report Tenant perspective: (As a Tenant Representative) The Greater Reading market has experienced a high level of interest within the 4th quarter 2012, although activity is high and deals are steadily coming forward the A and B product is still offering incentives/concessions which have allowed Tenants to continue to capitalize on past market conditions. However moving forward especially in 2013, landlords will begin to limit the concessions and negotiate much harder on higher base rates. Tenants should begin to negotiate any leases that are within 18 months of expiration. This allows for enough room to negotiate and capitalize on the current conditions. Although the markets are improving and landlords will begin to lock in better terms, we feel the market will continue to be a Tenant s Market into the late stages of 2013 based on current vacancies and leasing activity. Landlord perspective: (As a Landlord Representative) Greater Reading s recent activity will sway some landlords to think the market has turned around. Be cautious as we feel well into 2013 the market will maintain its Tenant Market status. Rates have been low over the past few years, so by offering free rent on the front end while maintaining higher base rates will not only provide tenants the ability to get into the space on a lower initial cost for year 1, it will allow landlords to maintain higher valuations on their assets since most Free Rent is outside the term. This allows landlords to still get effective 3, 5, or 7 year terms while limiting their exposure long-term. Interest rates will probably remain low well into This will allow tenants to finance TI themselves at sometimes better rates then landlords. This makes the Free Rent on the front end even more appealing to some tenants. Bryan E. Cole Office & Medical Specialist (d) Bcole@naikeystone.com Check Bryan Out on:

9 Downtown Office Report Vacancy Rates Net Absorption Asking Rents Construction The Greater Reading Downtown Office Market ended the 4th quarter 2012 with a vacancy rate for Class A Office buildings at 22.96%. There was no change in vacancy rates from 3rd quarter 2012., however it was a significant increase from the same period The average rental rates slightly decreased from 3rd to 4th quarter 2012 at $14.00 per square foot Modified Gross(1) to $13.50 per square foot Modified Gross(1). The largest additions to the overall vacancies in Class A facilities were at 401 Penn Street and 201 Penn Street, which caused Class A vacancy rates to sky rocket from 2011 into Due to the current economic climate and overall interest in the City, these buildings remain vacant and are still taking a toll on the overall vacancy rate within Downtown. The Class B Downtown office market ended the fourth quarter of 2012 with a vacancy rate of 22.08%. There was no change in vacancy rates from 3rd quarter 2012, and it was a slight increase from the same period The average rental rates dropped from $11.50 per square foot Modified Gross(1) in the 3rd quarter 2012 to $10.00 per square foot Modified Gross(1) in 4th quarter 2012 this is also a slight decrease to the rates from the same period Overall Vacancy Rates for Class C buildings remained unchanged throughout 2012 however, various buildings previously tracked as Class B buildings were changed to Class C buildings, due to re-evaluating the assets and conditions. Tour Activity Concessions Sales Volume # of Properties for Sale For Full Article visit (1) = Modified Gross is a rate that includes CAM, Taxes, Insurance. However typically Utilities are separate as well as in-suite janitorial. Total Blocks of Space (Can be Demised) # of Bldgs. Size Class A Class B Class C Total 0-4, ,000-9, ,000-19, ,000-39, ,000-74, ,000 - Greater Bryan E. Cole Office & Medical Specialist (d) Bcole@naikeystone.com Check Bryan Out on:

10 Downtown Office Report Current Rental Rates Year 2011 $ $15.00 MG(1) $ $13.00 MG(1) 1st Qtr $ $15.00 MG(1) $ $13.00 MG(1) 2nd Qtr $ $15.00 MG(1) $ $13.00 MG(1) 3rd Qtr $ $15.00 MG(1) $ $13.00 MG(1) 4th Qtr $ $15.00 MG(1) $ $12.00 MG(1) (1) MG - Modified Gross is a form of Lease Rate. This typically includes CAM, Taxes, and Insurance. Largest Blocks of Space Vacant SF Building Class 401 Penn Street 180,000 Class A 201 Penn Street 40,690 Class A 400 Washington Street 35,579 Class A 35 N. 6th Street 75,000 Class B 501 Washington Street 46,595 Class B 443 Penn Street 37,740 Class B 230 N. 5th Street 30,000 Class B 645 Penn Street 24,889 Class B Local Resources Greater Reading Economic Partnership City of Reading Tax Rates Earned Income Tax (Resident) 3.4% Greater Reading Chamber of Commerce Greater Berks Development Fund Earned Income Tax (Non-City Resident) Local Services Tax City Real Estate Tax Per Capita Tax 1.1% Max $52.00 annually Mills $15.00 Annually Business Privilege Tax Service 2.25 Mills Reading Redevelopment Authority NAI Keystone Commercial & Industrial, LLC Commission Rental Retail Wholesale 2.25 Mills 2.25 Mills 1.5 Mills 1.0 Mills Real Estate Transfer Tax 5% Bryan E. Cole Office & Medical Specialist (d) Bcole@naikeystone.com Check Bryan Out on:

11 Contact info: Bryan Cole Office & Medical Specialist (direct) Look for our marketing material Newsletters Quarterly Monthly Weekly Specific Industry s Brochures & Market Reports E-Brochures E-News Flyers Office Report Check Us Out on: One of the many ways we Market Real Estate Bryan Cole NAI Keystone Commercial & Industrial, LLC Exeter Ridge Corporate Center 3970 Perkiomen Avenue Suite 200 Reading, PA