Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 29, 1990 TAG: 9003290207
SECTION: BUSINESS PAGE: A13 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
Edwin Hall and Dale Poe, two Roanoke Valley members of the national society, reported their evaluation of the industrial and office markets for the national organization's annual survey.
While local governments are working more in economic development, Poe said the supply of industrial property was short and leasing demand was strong last year.
City industrial parks help attract large users but discourage private speculative development, he said.
Following a national trend, the Roanoke Valley's warehouse and distribution components of the industrial market had almost 60 percent of the real estate growth last year.
Manufacturing companies accounted for 25 percent of the growth; research and development had a 15 percent increase.
Poe estimated the vacancy rate for industrial property at a low 2.2 percent in suburban areas of the Roanoke Valley and almost 6 percent in central Roanoke.
Many large companies such as Advance Auto, BellSouth Communications, Vitramon and Tweeds are erecting their own buildings; Grove Worldwide is moving into leased space in the former Sav-A-Stop building.
The shortage of industrial space is leading to higher lease rates and land costs, Poe said.
With the intense competition in manufacturing sites and the trend toward more distribution, he said, communities "can't be choosy" when prospects are in sight. "Anybody with a sound company that is environmentally safe ought to be allowed to open his doors."
Poe said the community can compete with other cities for the big sites "but there is a shortage on the private side. When they look for smaller sites, sometimes we're a little embarrassed."
In the office market, the inventory of Class A downtown space ranges from a 6 percent vacancy rate for downtown buildings, 10 to 11 percent for the south suburban area of Roanoke County and 34 percent for the north suburban area, according to Hall's estimates.
The next available Class A office space in downtown Roanoke will be in the Dominion Tower, to be completed in about two years, and in the Colonial Arms (former Colonial American National Bank) building, Hall said.
Norfolk Southern employees in Colonial Arms are expected to move to new offices to be built on Williamson Road, leaving about 64,000 square feet of leasable space.
After that, Hall does not expect another downtown office building to go up until 1995 or later.
"We need to be very careful" about constructing office space in local markets to avoid overbuilding for the next two years, he said, unless the space is leased in advance or companies decide to build headquarters or regional office buildings.
by CNB