Saratoga Business Journal
By Rod Bacon
According to area professionals, the commercial real estate market in the region is, while somewhat challenging, doing well.
Tom Roohan, owner of Roohan Realty in Saratoga Springs, said that the increase in interest rates post-Covid is making it difficult for investors to purchase commercial properties.
“A lot of us were spoiled by lower interest rates,” he said. “Low interest rates mean a lower cap rate, which means higher value. That has been frustrating for many people because things they refinanced are built at a certain interest rate that is no longer available to us. That makes it hard for us to sell the property.”
He noted that interest rates that were as low as 3.75 percent have risen to 6.75 percent or 7 percent, depending upon how much is put down and the quality of the property.
Despite that, some very desirable office space is available in the Spa City. The agency just listed a 2,100-square-foot corner office for lease in the historic Van Raalte Mill building at 125 High Rock Avenue. The $6,000- per-month lease is all inclusive except for communication and includes a reception area, conference rooms, kitchen, eating area, and substantial parking. Listing agents are Amy Sutton and Megan Brenensthul.
It is on the market because Marshall + Sterling Insurance consolidated some of its Upstate New York offices in Latham.
“It’s a nice historic building space that is very bright because it’s in a corner of the building,” Roohan said.
The agency’s listings also include an office building on Care Lane in Saratoga Springs and another in Malta.
He said that he didn’t know of anything available in the retail sector on Broadway.
“But there’s always dirt for sale,” he noted. They have a listing for 7.5 acres at the entrance of the Blue Lupine Lane Industrial Park off Ballard Road near Exit 16 in Wilton. Asking price is $609,00.
Roohan said that because of venues like the Saratoga Race Course, Saratoga Performing Arts Center, and proximity to ski areas like West Mountain and Gore Mountain the second home market is strong.
“People can own a condo or a townhouse here and come from nearby places like New Jersey, Boston, New York City or Pennsylvania to enjoy what Saratoga has to offer,” he said.
Tom Savino, an associate at Albany-based CBRE Upstate NY, agrees with Roohan, calling the Saratoga County economy “vibrant.”
“If we have an issue at all it is sometimes the lack of inventory, both industrial and office, for purchase,” he said. “There’s a bit of a drought there, but there are leasing opportunities and for the most part they are above normal in terms of activity.”
He noted that even during Covid leasing activity in Saratoga Springs did not slow down drastically. He and fellow associate Eric Simonds were the leasing agents tasked with filling 85,000 square feet of office space in Congress Park Center at 321 Broadway when Goldman Sachs relocated to Latham. With the exception of 10,000 square feet that currently has a lease out for review, they met that goal.
“Location is key in real estate and downtown Saratoga Springs is a prime example of location driving demand,” said Savino.
Like Roohan, he noted that virtually no available retail space is available on Broadway.
“The first floor of Congress Park Centre is retail and it’s completely full,” he said. “If I had more space I could sell it if it was on Broadway.”
In suburban markets there has been some redevelopment of the larger malls that has resulted in increased activity. He said this is at least partly due to quick-serve restaurants opening.
He has seen a softening in the industrial sector due to the absorption of space. Quad Graphics was purchased by biotechnology company Regeneron and Cascades Tissue by scrap metal recycler NHKelman Inc., removing these buildings from the market.
“In that sector we don’t have a lot of inventory for purchase,” he said. “There is some inventory for lease but we’re seeing it slow down in favor of purchase.”
In Glens Falls, there has been a significant resurgence of activity in the commercial real estate market. Projects by Bonacio Construction on South Street and one in conjunction with the Galesi Group on Hudson Avenue have led the way but other development has contributed as well. Developers like Chris Patten and Tim Barber have helped shape the look of the area.
Craig Darby, another associate with CBRE Upstate NY, has brokered deals in Glens Falls for years.
On September 30, Behavioral Health Services North Inc. closed on a +/-8,800-square-foot office building at 25 Willowbrook Road in Queensbury.
Native Partners’ owner Tim Barber sold approximately 10 acres at 377 Corinth Road in Queensbury to F.W. Webb Company, which is constructing +/-90,000-square-foot showroom/office/warehouse facility.
Barber is building an addition to the former Native Textiles facility at 24 Native Drive. The building houses multiple warehouse tenants.
Currently on the market for $2,900,000 is 3 Highland Avenue in Queensbury, a property zoned commercial/light industrial being offered by F.W. Webb. According to Darby, who is representing the seller, multiple commercial/industrial uses are permitted.
“All of this activity is very positive for Glens Falls and the region in general,” said Darby. “We are definitely experiencing an improving economy and a renewed interest in developing viable projects in the area.”