Downtown Occupancy Steady In 2011
An annual report from the Worcester Regional Research Bureau found that the occupancy rate for office space in downtown Worcester is 79 percent, a statistically insignificant change from last year's 81 percent, but lower than in 2006, when it stood at 89 percent.
The bureau said the recession and the lack of investment in downtown buildings continues to represent a drag on the area. But it also cited a number of major projects now underway that could reverse the trend. Among the largest are the Unum office space and Saint Vincent Hospital cancer center being built at the CitySquare site, the Massachusetts College of Pharmacy and Health Sciences' new optometry school building and the new Gateway Park II research complex.
The report was based on data provided by property owners or leasing agents for 75 properties, representing 4 million of the 4.5 million square feet of office space in the downtown area. Of those buildings, 44 had vacancies. The most were found in Class B space, which was found to be 74 percent occupied. In contrast, occupancy rates for the pricier Class A space and similarly priced Class C space were 84 percent and 87 percent, respectively.
Lease rates ranged from $11 to $22 per square foot for Class A space, $6 to $29 for Class B and $6 to $25 for Class C. None of the rates have changed much over the past five years.
The Research Bureau said downtown Worcester does not appear to be in particularly bad shape in occupancy rates. It noted that Colliers International puts the vacancy rate for the Route 495 corridor at 10 percentage points higher than downtown Worcester's.
The report also said the city's commercial properties have held their value much better than homes over the past three years. The total assessed value of commercial property in the city has risen 1 percent since 2008, while the value for residential properties has fallen 19 percent.
Aside from the new developments cited in the report, there are other signs of life downtown. Just last week, Commerce Bank announced it had purchased the historic Slater Building at 390 Main St., its headquarters for 39 years.
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