By R.J. DeLuke
The commercial real estate market may
not be strong in some areas of the state, but in
Saratoga County it has been fairly strong in
recent years, according to real estate agents
in that field.
“We’re still suffering from a bit of a recession,
despite some of the talk out there,” said Jeffrey
W. Pfeil, president of J.W. Pfeil & Co. Inc. “But
Saratoga County is doing quite well compared
to the rest of the region. It’s very robust.”
Saratoga Springs and Clifton Park he cited as
being particularly strong, with a lot of retail activity.
Don McElroy of DCG Development said
leasing office space has been “on the slow side
in recent years” and the retail business has
been spotty overall, but “not locally so much
as a national trend.”
Nationally, commercial real estate investments are expected to produce generally solid returns in 2014, according to the authors of “Expectations & Market Realities in Real Estate 2014–The Future Unfolds,” an annual forecast report released by Real Estate Research Corporation (RERC), Deloitte, and the National Association of Realtors (NAR).
Findings indicate that although uncertainties remain, the economy is expected to continue to grow slowly and improve modestly in 2014.
“Capital is flush, and commercial real estate investment has expanded to the secondary and tertiary markets. In addition, the report carefully analyzes and offers a research-based assessment of the office, industrial, apartment, retail, and hotel property sectors,” the groups said in a news release.
“We have seen steady if slow progress since the commercial real estate market collapsed in second quarter 2008, and as the future unfolds, we expect that the positive returns for commercial real estate will continue,” said Kenneth Riggs, Jr., president and CEO of RERC.
“The stabilization that we have seen in the commercial real estate markets during the past year has added greatly to the ‘cautiously optimistic’ outlook we have for the year ahead,” said Matthew Kimmel, principal and U.S. real estate sector leader for Deloitte Transactions and Business Analytics LLP. “Overall, we see the potential for moderate and continued growth in the volume of commercial property transactions and in property prices.”
The commercial real estate recovery is expected to continue throughout 2014, based on slightly stronger economic growth, said Lawrence Yun, the National Association of Realtors’ chief economist. “We anticipate the economy to grow at an annual rate of approximately 2.6 percent, with about 2.2 million jobs to be added in 2014. More jobs mean increased demand for office, retail, apartment, and other commercial real estate sectors.”
Pfeil said Saratoga County is seeing new stores coming in at a steady rate, even as some disappear. “Retail is in constant flux,” he noted. “It changes constantly.”
The loss of Kmart in Clifton Park is not a major concern, said Pfeil, because it will be followed by some new entity coming in.
McElroy noted there may be some additional fallout in the county, with talk of retrenchment by companies like JC Penny and Radio Shack, “but certainly we have done better in Saratoga County” than other areas. “We continue to see retail establishments come into the area”in the form of restaurants, franchises and more. “It’s a mixed back,” he said.
Said Pfeil, “We’ve been doing retail leasing for 30 years. Over that time, a lot of stores don’t exist anymore. Think of the video stores, which are obsolete. There is always somebody trying to do a better job. Others don’t keep up and end up going out of business. Nothing is forever in retail.”
“Considering the amount of office space in Saratoga,” said Pfiel, that segment “is going very well. There’s very low vacancy. Rents are holding up and in some cases increasing.”
He said his company gets requests for all different kinds of space, “class A space, class B, class C. It’s across the board. Some people want to be on Broadway. Some don’t care at all.” McElroy said GlobalFoundries in Malta has had some effect on commercial real estate, but not the imp-act, so far, that some may have expected. There are some service- and equipment-related businesses come in, but “there’s been some hesitancy … Most leases we’re looking at one to three years.”
He said there is some expectation that is the state decides Saratoga Springs will be the site of a new gambling casino, there may be some activity related to that. If not, “it may take some attention away from the area for a while, but I don’t think it will do any long-term harm.”