High downtown office occupancy signals upturn
CHARLESTON, W.Va. - Charleston's five downtown office towers are effectively full, meaning more businesses could turn to new construction to free up office space downtown, according to a new survey of downtown office space.
The city's five "Class A" office buildings - Chase Tower, BB&T Square, Huntington Square, Laidley Tower and the United Center - are 96.6 percent full, according to the latest survey of downtown office space by commercial real estate broker Howard Swint.
That 3.4 percent vacancy rate is the lowest level Swint has seen since the 2.9 percent rate recorded in October 2008, just before the city began feeling the effects of the Great Recession.
"We're back at what we term effective full occupancy," Swint said. "We're finally coming out from under the downward pressure that was caused by the financial crisis."
Since four of the five towers house the offices of major state banks, the recession took a major toll on the firms' operations.
"Before the financial crisis five years ago, we were pretty much where we are today," Swint said. "Then the crisis hit and banking and financial firms contracted in a big way, when they went through mergers and downsizing."
By February 2010, the vacancy rate in the five downtown buildings had hit 13 percent. Since then, improving economic and business conditions have revived the local commercial real estate market.
Swint has been doing his survey for close to 10 years. He uses commercial real estate listings and measurements of each building's rentable square feet to come up with percentages.
The occupancy rates for each building vary.
Huntington Square has the least amount of rentable space, with just 0.8 percent of its 116,000 square feet available for lease.
Laidley Tower has the most amount of rentable space, with 7 percent of its 214,326 square feet available for lease.
Chase Tower, BB&T Square and the United Center have vacancy rates of 1.4, 2.6 and 4.6 percent, respectively.
With so little available space in the city's major buildings, Swint expects to see two things happen.
One, he expects further expansion in what he calls the "Class B" office spaces along areas like Capitol Street in downtown Charleston.
Swint said Class A buildings are typically more modern, with on-site parking and security and located in the heart of a city's business district. The Class B properties are those in smaller, older buildings that may not have on-site parking or other amenities.
He said expansion into those sites could continue. But he also believes the recent announcement by MVB Bank, which is planning to construct a new 30,000 square foot building at the corner of Margaret Street and Washington Street East could be a signal of things to come.
"The new construction is significant; we haven't seen that for some time," Swint said.
Swint said it's the first new office construction project in recent memory.
MVB Bank spokeswoman Aly Goodwin Gregg said the company conducted a market assessment of downtown properties before deciding to build the new building.
"Within our own market assessment, we saw the need for not only for office space, but for LEED certified space," Gregg said.
LEED, which stands for Leadership in Energy and Environmental Design, is a national green building initiative. LEED-certified buildings are designed to reduce waste, greenhouse gas emissions, conserve energy and water, and provide safer, healthier environments for occupants.
Gregg said MVB officials believe there is a "tremendous opportunity" for this kind of office space in the Charleston area.
"It's our goal to break ground here in the next month or so, and we fully intend to be in the building and occupying the bank by January 2014," she said.
Contact writer Jared Hunt at email@example.com or 304-348-4836.