MARKETBEAT

OFFICE SNAPSHOT
BINGHAMTON, NY
A Cushman & Wakefield Alliance Research Publication

Q4 2013
million dollar high tech incubator, sited downtown, moved closer to construction with its inclusion in the awards announced in the statewide Regional Economic Development Council competition. The Southern Tier Regional council was designated a Top Performer for the second year in a row, receiving $81.9 million from New York State. Other high impact grants were made for the extension of a high speed fiber optic network into Broome and Tioga counties and the construction of a sewer line through the Greater Binghamton Airport Corridor, opening 1,000 acres for shovel ready development.

ECONOMIC OVERVIEW
While economic recovery is gaining momentum nationally and statewide in New York, Binghamtons recovery remains inexorably slow. The Binghamton metro area has lagged other New York metropolitan areas in economic growth, per capita income growth and employment. Binghamton was one of two New York metro areas to lose private sector jobs from November 2012 to November 2013. The market experienced a year over year decline of 700 jobs, a 0.6% decrease. Notably, manufacturing jobs continued a six year decline and the overall workforce shrank 1.7%, offsetting the decline in unemployment to 7.3%. In the housing market, sales through November 2013 lagged the previous year and the median price dropped year over year and throughout the course of the year. The consumer confidence index in the market remained among the lowest in Upstate New York, which trails the NYC metro area and the nation significantly.

STATS ON THE GO
Q4 2012 Overall Vacancy Direct Asking Rents (psf/yr) YTD Leasing Activity (sf) 13.8% $12.24 95,800 Q4 2013 12.0% $11.77 39,028 Y-O-Y 12 MONTH CHANGE FORECAST -1.8pp -.04% -.59%

OFFICE MARKET SLUGGISH

After dropping almost a point in the first quarter, vacancy in the office market levelled off, improving only 0.3% over the remainder of the year to end at 12%. Several smaller office buildings totaling 17,000 square feet were sold during the quarter, while office leasing across all classes remained almost negligible. Lease rates declined slightly but on a very modest volume of activity. The most significant trend in 2013 was a continuation from the previous two years of the conversion of vacant and underutilized office buildings to residential redevelopment. Including the conversions, mixed use redevelopment, and investment to reposition office property, downtown Binghamton activity has been the highlight of the 2013 commercial real estate market.

OVERALL RENTAL VS. VACANCY RATES

$14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2010 2011 2012 Q4 2013
OVERALL NET RENTAL RATE

20.0% 18.0% 16.0% 14.0% 12.0% 10.0%

OVERALL VACANCY RATE

OUTLOOK
While the once robust manufacturing sector of the local economy remains problematic, other positive economic trends provide reason for optimism about the Binghamton economy. The resurgence of downtown Binghamton continues to be driven by the development of well over 1,000 student housing beds, in completed projects or under construction for August 2014 occupancy. Additional residential capacity is in the pipeline. Residential development has been the catalyst for repurposing of vacant downtown buildings and has fostered restaurant and retail growth. Binghamton Universitys $22

OVERALL OCCUPIER ACTIVITY

0.5 0.4 msf 0.3 0.2

psf/yr

0.07

0.60

0.02

0.06

0.05

0.03

0.10

0.06

0.04

0.0

2009

2010

2011

2012

2013

LEASING ACTIVITY

USER SALES ACTIVITY

Pyramid Brokerage Company 84 Court Street, Suite 300 Binghamton, NY 13901 www.cushmanwakefield.com/knowledge

For more information, contact: Maureen Wilson, PresidentBinghamton Office 607-754-5990 mwilson@pyramidbrokerage.com www.pyramidbrokerage.com

The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

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0.1