Report: Retail vacancies up slightly in 2013

For a third straight year, the vacancy rate of major retail space in the Rochester region remained largely flat a big improvement from a recent five-year stretch that saw the rate grow rapidly.

Commercial real estate brokerage CB Richard Ellis this week put out its 2014 market outlook for the Rochester region. The report looks at the state of and expectations for the commercial, office and industrial real estate markets in Rochester and several surrounding counties.

According to the report, the areas roughly 22.3 million square feet of major retail space retail spaces of 30,000 square feet or more ended 2013 with a vacancy rate of 11.2 percent. That was up just a fraction of a percentage point from 2012 and 2011. Thats down from 2010, when the rate peaked at more than 12 percent and marked the apex of a five-year span that saw the vacancy rate climb steeply from about 8 percent.

The amount of major retail space has been hovering at slightly north of 22 million square feet since 2010. During 2013, the Rochester region saw more than 250,000 square feet of new retail space added, with the biggest drivers of that being the East Avenue Wegmans grocery and the new Van Maur department store at Eastview Mall. Meanwhile, according to CB Richard Ellis, those new spaces were largely offset by the removal of a similar amount of square footage from inventory.

This year is expected to see a number of new major retail spaces open their doors, including the 150,000-square-foot Costco store under construction at East Henrietta and Westfall roads and the University of Rochester College Town development along Mt. Hope Avenue. However, according to CB Richard Ellis projections, Continued stability may be reasonably forecast for inventory and vacancy.

The areas industrial real estate portfolio of roughly 81.7 million square feet (with about a quarter of that Eastman Kodak Co. and Xerox Corp. space) ended 2013 with a vacancy rate of roughly 10.9 percent up about half a percentage point from the year before. However, for industrial space just within Rochester city limits, the vacancy rate was up more than 1 percent in 2013, to 13.2 percent.

Major industrial developments in 2013 included Xerox undertaking a major expansion of a toner plant at its Webster campus and bow hunting and target shooting company Outdoor Group LLC breaking ground on a 70,000-square-foot plant in Henrietta.

The suburban office space market saw a decent 2013, according to CB Richard Ellis, with the vacancy rate there down 1.3 percentage points to 13.8 percent. There is roughly 8.7 million square feet of competitive office space in the areas suburbs. In the citys 7.4 million square feet of competitive office space, the vacancy rate in 2013 was 19 percent down slightly from 2012.

The areas office space supply is going through a big transition, from redevelopment plans for downtown Rochesters Sibley Building that will see some of its empty office space converted into housing to Monroe Community College purchasing more than 500,000 square feet of Kodak headquarters space for its new downtown campus.

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Report: Retail vacancies up slightly in 2013