Syracuse, NY Office Market Q4 2017 Summary
Core Content
The document provides an overview of the Syracuse, NY office market for Q4 2017, highlighting economic performance, market indicators, and key transactions. It is produced by Cushman & Wakefield and Pyramid Brokerage Company, two real estate services firms.
Main Economic Indicators
| Indicator |
Q4 2016 |
Q4 2017 |
12-Month Forecast |
| Syracuse Employment |
316.8k |
319.8k |
▲ |
| Syracuse Unemployment |
5.0% |
5.1% |
▼ |
| U.S. Unemployment |
4.7% |
4.1% |
▼ |
- The economy of Central New York (CNY) showed strong performance in 2017, with a notable increase in employment.
- The region received the highest amount of state grants and tax credits for development projects, totaling $86.4 million.
- The "Med's & Ed's" on University Hill were the main contributors to the economic growth, with investments amounting to approximately $500 million in projects underway or planned for later in 2017, and an additional $350 million over the next two years.
Market Overview
- Demand: Continued focus on downtown areas, driven by limited suburban office supply and growing residential population among young professionals.
- Vacancy: Overall vacancy rate decreased slightly from 14.9% in Q4 2016 to 14.2% in Q4 2017.
- Net Absorption: Slight negative net absorption in Q4 2017 (-147,752 sq ft), indicating a modest decline in space taken.
- Rental Rates: Asking rents increased steadily, with the overall average asking rent at $15.90 per sq ft per year.
- Investment Sales: The market was active, with over $40 million in transactions completed during the year.
Market Breakdown by Submarket
| Submarket |
Inventory (SF) |
Sublet Vacant (SF) |
Direct Vacant (SF) |
Overall Vacancy Rate |
Current Qtr Net Absorption (SF) |
YTD Net Absorption (SF) |
YTD Leasing Activity (SF) |
Under Construction (SF) |
Avg Asking Rent (All Classes) |
Avg Asking Rent (Class A) |
| CBD |
5,696,638 |
38,743 |
1,029,195 |
18.8% |
22,161 |
-119,432 |
98,722 |
0 |
$16.14 |
$18.76 |
| East |
4,654,152 |
117,587 |
540,218 |
14.1% |
-55,668 |
-24,544 |
94,569 |
0 |
$14.21 |
$15.44 |
| North |
3,792,634 |
2,860 |
389,648 |
10.4% |
15,524 |
12,348 |
102,068 |
0 |
$15.13 |
$18.05 |
| South |
303,363 |
0 |
9,733 |
3.2% |
0 |
-1,700 |
0 |
0 |
$15.00 |
N/A |
| West |
1,712,261 |
0 |
165,657 |
9.7% |
35,878 |
-14,424 |
31,278 |
5,000 |
$18.55 |
$18.78 |
| Total |
16,159,048 |
159,190 |
2,134,451 |
14.2% |
17,895 |
-147,752 |
326,637 |
5,000 |
$15.90 |
$18.10 |
Key Lease Transactions 2017
| Property |
SF |
Tenant |
Transaction Type |
Submarket |
| 300 S. State Street |
17,954 |
General Services Administration |
Lease |
CBD |
| 290 Elwood Davis Road |
14,313 |
AnchorQEA LLC |
Lease |
North |
| 300 S. State Street |
13,795 |
CHA Consulting |
Lease |
CBD |
| 5793 Widewaters Pkwy |
12,000 |
Alex Joseph & Associates |
Lease |
East |
| 5000 Brittonfield Pkwy |
5,019 |
Crouse Medical Practice LLC |
Lease |
North |
| 4 Adler Drive |
5,000 |
Highfield Enterprises |
Lease |
North |
Key Sales Transactions 2017
| Property |
SF |
Buyer |
Price / $PSF |
Submarket |
| 110 Fayette Street West |
300,000 |
Zamir Equities |
$25,550,000/$85 |
CBD |
| 300 State Street South |
275,000 |
Zamir Equities |
$9,450,000/$35 |
CBD |
| 1035 Seventh North Street |
24,075 |
Hat & Dog LLC |
$1,000,000/$41 |
North |
| 235 Greenfield Pkwy |
21,000 |
Edgewater Management |
$1,205,000/$105 |
North |
| 750 Genesee Street West |
49,182 |
Super Office Interiors |
$250,000/$5 |
West |
| 4 Adler Drive |
20,000 |
Berkone Inc. |
$512,000/$25 |
North |
Outlook
- Rehabilitation Projects: A surge in large-scale rehabilitation projects is expected to increase competition and potentially drive up leasing prices in the coming quarters.
- Tax Reform: Recent changes in the tax code are anticipated to create robust investment sales opportunities across the country, including Central New York.
- Class A Office Space: High-quality Class A office space will be available in 9 to 18 months, which could significantly impact the market.
Contact Information
About Cushman & Wakefield
- A leading global real estate services firm with over 45,000 employees in more than 60 countries.
- Offers a range of services including agency leasing, asset services, capital markets, and investment & asset management.
- Aims to help investors and occupiers optimize the value of their real estate through global perspective and local knowledge.
- Visit www.cushmanwakefield.com or follow them on Twitter @CushWake for more information.
