SYRACUSE — This year looks much the same as 2014 when it comes to real estate and construction in the Syracuse market, according to the Integra Realty Resources (IRR) 2015 Viewpoint report. However, the area is seeing several bright spots of activity that will show some growth this year. “For the most part, Syracuse […]
SYRACUSE — This year looks much the same as 2014 when it comes to real estate and construction in the Syracuse market, according to the Integra Realty Resources (IRR) 2015 Viewpoint report. However, the area is seeing several bright spots of activity that will show some growth this year.
“For the most part, Syracuse doesn’t change much,” says William Kimball, senior managing director of IRR’s Syracuse office and current president of the Upstate New York Chapter of the Appraisal Institute. The region typically doesn’t follow the boom-and-bust cycles other areas across the country sees, he says, so there isn’t a lot of change in the real-estate market from year to year.
However, things have improved nominally on both the sales and leasing side of things, Kimball says. “Things are improving.”
Then there are those bright spots — areas of increased activity — that shows promise for the year ahead, he says.
“The biggest thing that’s going on in the area is the Township 5 project,” he says. The 500,000-square-foot retail project by Cameron Group LLC in Camillus is stirring up a lot of activity from businesses new to the market, such as Costco, as well as interest from existing businesses who may want to move to a newer building at a busy location, Kimball says.
That’s especially true with uncertainty surrounding other retail centers in the area. The future of Great Northern Mall, located in Clay and owned by Macerich Co, could be uncertain, Kimball says. The mall lost several large tenants, including Dick’s Sporting Goods, but there is more than just that, he says. The location is not the draw it once was, there is more competition, and the facility has the disadvantage of age. Destiny USA has already done a great deal to draw both tenants and shoppers away from other retail centers, and Township 5 will continue that trend, Kimball says.
Other positive changes are taking place in the region’s office-space sector, he says, where former offices are being redeveloped into apartments. “It takes some of the dead, inactive space off the market,” Kimball notes. With plenty of space available and no new major construction projects in the works, the sector is now more in line with his expectations for it.
One place where there is new activity going on is one particular retail segment — the dollar store. “Where there is a little void of space, a new one pops up,” Kimball says. Over the past year and a half, between 15 and 20 new dollar stores have opened in the region, with Dollar General and Family Dollar as the leading locations. Kimball says he expects the dollar-store trend to continue to flourish in 2015.
On the residential side, the downtown Syracuse area continues to be a bright spot in 2015. Numerous projects to develop apartments have boosted interest in the downtown area. As a result, the vacancy level for the area remains at a very low 2 percent, Kimball says. “That market has legs, and it’s going to continue,” he says. The market is particularly attractive to the younger crowd and “it’s really become cool to be downtown,” he says. In addition, the Township 5 project will contain 96 apartments once complete.
Overall, the IRR report found that the Syracuse market had lower levels of Class A and B office space, as well as lower inventory of multifamily housing. The area’s retail sector is in its second stage of recovery with decreasing vacancy rates; however, new construction and rental-rate growth are still low.
To read the full 2015 Viewpoint report, visit www.irr.com/_FileLibrary/Publication/16/IRR_Viewpoint_2015.pdf.