Rhode Island

The office sector in Rhode Island’s commercial real estate market has seen a strong carryover and positive momentum from 2017, into 2018, which we continue to enjoy today. The market has seen positive absorption in most areas and with little speculative development on the horizon, lease rates are being affected accordingly. It’s safe to say, it is no longer a Tenant’s market. In Providence, vacancy rates are hovering in the 12 percent range, down from 16.5 percent just a few years ago. Recent projects include the redevelopment of South Street Landing, a $230 million dollar renovation of the former Narragansett Electric power station which is now home to the URI/CCRI Nursing School as well as some of the administrative offices of Brown University. Just a block away, construction is  underway for the 191,000-square-foot Providence Innovation Center. This will be occupied by the Brown University School of Professional Studies, Johnson & Johnson and the Cambridge Innovation Center. The redevelopment of 75 Fountain Street, a 160,000-square-foot building, once fully occupied by the Providence Journal, has also enjoyed positive absorption. The redevelopment by Nordblom Company and Cornish Associates has attracted companies such as Tufts Healthcare, GE Digital and Virgin Pulse to join the Providence …

Overall the Rhode Island office market exited 2015 with positive momentum, which resulted in a strong first quarter 2016. While much of the activity is intrastate, it is a sign that local businesses have regained confidence in the overall economy outside of Rhode Island. In Providence, office building conversions to residential apartments continues to drive much of the urban office building demand. The largest of the recent residential conversions include the sale of 95 Chestnut Street (57,000 square feet) and 170 Westminster Street (62,000 square feet), which has resulted in contraction of the Class B Providence office market. In addition, The Rhode Island School of Design’s (RISD) recent expansion/purchase of a 12,000-square-foot office condominium at 123 Dyer Street has also spurred downtown demand. The Providence office market has also been affected by corporate consolidation. Citizens Bank, Bank of America, Textron and Blue Cross have all reduced the size of their footprints in Providence over the past 18 months. As a result, the Providence office market experienced a slight uptick in vacancy rates ending 2015, at about 16.5 percent. In the Jewelry District, three construction projects are well underway. The South Street Landing project is a $220 million dollar renovation of …

In Providence, the Class A office market continues to maintain vacancy rates under 10 percent, with an overall office vacancy of about 14 percent. This trend should continue as there is not any new Class A office development on the horizon for the capital city. There have been a few larger market transactions in Providence over the past 12 months. Waldorf Capital Management, a local real estate investment firm, purchased the Turks Head Building (150,000 rentable square feet) in late 2014. In addition, 170 Westminster Street (65,000 rentable square feet) recently traded; according to local rumor, the property will be converted to residential apartments. If 170 Westminster comes out of circulation, this will have a positive impact on the Class B vacancy rate in the city. Just south of the city on the 195 redevelopment land — dubbed “The Link” by the 195 Commission — work is just about complete to make the 19 available acres “shovel ready.” The 195 Commission has been successful in fully negotiating two purchase and sale agreements. The first is for student housing and the second is mixed-use residential. However, both projects are contingent on an acceptable tax stabilization agreement from the city, which has …