Mid Atlantic Real Estate Journal — Commercial Office Spotlight — February 28 - March 13, 2014 — 11C NAI CIR
www.marejournal.com
By Nathan Kranz, NAI CIR Greater Harrisburg area is showing positive signs of activity moving into 2014
T
he office market in the greater Harrisburg area is showing posi-
the East Shore office market remains a desirable regional submarket location.
positive absorption in both class A and class B there are strong signs that businesses
Highmark Blue Shieldmoved their 120,000 s/f operation from a class C building into a class A building in one of the largest office relocations in 2013. Market rental rates for the West Shore continue to be lower than the East Shore, enticing companies to consider moves from the uncertainty in the city and to a submarket currently of- fering greater options. West Shore overall absorption for 2013 was 74,579 s/f which lowered the vacancy percent- age to 10.8%. The West Shore market is impacted with a
dearth of convenient, appro- priately entitled opportuni- ties for expansion but, signs continue to point to growing appetite for West Shore loca- tions within the market as a whole. With steady and consistent growth in market activity and continuing the current strength in rental rates, we anticipate 2014 to continue the trend of a stable and solid Harrisburg Regional office market. Nathan Kranz is a com- mercial real estate profes- sional with NAI CIR. n
t i ve s i gns o f a c t i v - ity moving into 2014. B u s i n e s s s u r v i v i n g the tougher times of the p a s t f e w year s ar e
With steady and consistent growth in market activity and continuing the current strength in rental rates, we anticipate 2014 to continue the trend of a stable and solid Harrisburg Regional office market.
Nathan Kranz
now starting to show positive momentum. To start 2013, rental rates were steady, affordable and the market had a plethora of office space for expanding businesses to choose from. Harrisburg has a very strong healthcare, government and insurance businesses calling the area home. With those sectors of- fering strong market stability Harrisburg remains a desir- able target for new business expansion throughout the area. In 2013 vacancy rates dropped approximately 2 percentage points in both East andWest Shore submar- kets. Actual lease transaction numbers have increased 12%, evidencing overall increased activity in the office rental market. Class A and B of- fice buildings have seen the greatest amount of positive absorption with the West Shore office market showing positive signs in both build- ing classes. Rental rates have become very steady and land- lords are holding rates with modest incremental increases each year. Harrisburg East and the Downtown Business District have had their share of finan- cial issues. Comcast, howev- er, substantially impacted the market with its’ recent lease of 136,000 s/f on the East Shore to house a regional call center. Also on the East Shore, PSECU has recently completed their move into a new 235,000 s/f headquarters just outside of the city limits. Even with challenges, East Shore class A office space still continues to be the most desirable in the region. At 9.6% vacancy, it is the lowest vacancy percentage of any class and with rental rates over $20/ s/f, continues to be the highest rental rates year to year. With convenient ac- cess to retail, major highways and Downtown Harrisburg,
Harrisburg West Shore experienced the most activ- ity throughout 2013. With
continue to upgrade from class C buildings. Novitas Solutions, a subsidiary of
Now Available
Office Space for Lease in Harrisburg, PA
984 - 6,460 SF EIGHT SUITES
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4200 Crums Mill Rd.
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1015 Mumma Road Lemoyne, PA 17043 717 761 5070 www.naicir.com
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