Downtown Office Market is Stable

WCPerspective 7

The downtown office market held its own last year. Considering the national economic turmoil, stable is good. Buffalo's Central Business District (CBD) saw a small increase in its Class A vacancy rate with newly redeveloped space coming onto the market according to an end-of-year market summary prepared by the CB Richard Ellis Buffalo office.

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128,000 sq.ft. of new Class A office space was created in the CBD last year and total occupancy increased by 99,977 sq.ft. The vacancy rate for Class A space bumped up .52 percent to 6.28 percent.

Two newcomers to downtown signed leases last year. Watts Architecture & Engineering, P.C. is relocating from Eggertsville and taking 20,000 sq.ft. at 95 Perry Street. The Department of Homeland Security is establishing an administrative services office in 33,000 sq.ft. of space in the Bank of America Building. Two law firms have found new homes and are expanding. Cellino & Barnes took space in Main Place Tower and Damon & Morey will be moving to Avant later this year.

One large tenant made plans to leave downtown. LP Ciminelli is exiting the Cyclorama Building and leased space at 325 Delaware Avenue. The construction services firm has purchased the former Great Buffalo Savings Bank headquarters at 2393 Main Street at Jewett Avenue.

Downtown's Class A and B vacancy rate is 9.8% compared to a national average rate of 11.6% for downtown markets (as reported by CB Richard Ellis' National Office Vacancy Index, Third Quarter 2008). The CBD's Class B space saw a .74 percent drop in vacancy to 13.4 percent.

CB Richard Ellis does not report the vacancy rate of Class C space which is typically older and functionally obsolete.

Get Connected: CBRE Buffalo, 716.855.3700

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Comments

7 Comments Leave a comment

Ike

January 16, 2009 12:45 AM

so over 1/3 of all office space is functionally obsolete?

Guess it would be reno'd if there was demand

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Andrew

January 16, 2009 8:00 AM

You'll see similar proportional numbers between A, B, and C space in every downtown across America

replied to Ike

Nate Neuman

January 16, 2009 8:47 AM

The benefits to Class C office space is its desirablility to small, start up firms until they get on their feet (i.e. Statler Towers) and for residential conversion (i.e. Sidway Building). Not all office space should be pristine and corporate.

MJ Worthington

January 16, 2009 12:04 PM

Every healthy district needs a mix of new and old. As mentioned above the older cheap spaces allows new buisnesses to grow up (hopefully) to pricier space some day.

QueenCity

January 17, 2009 1:52 PM

Buffalo's class A office space is underbuilt and regardless of the economy...downtown Buffalo will continue to get building projects, especially period style infill between the Niagara and Main Street.

and I see NEW BUFFALO taking advantage of lower land prices, larger urban lot sizes on the eastside....if only they could build up Jefferson as the conduit between the KEnsington and I-190 and downgrade Elm/Oak.

sonyactivision

January 18, 2009 12:36 AM

If a selected few older 'Class B&C' buildings like the Liberty were converted to residential, the necessity to replace that lost office space might give new development a big boost. As stated above, there is a very useful role for those lower grades of space and that's where someone could step in and redo the old AM&A and other valuable structures to deliver that GLA. A bit of reshuffling would really help Downtown...