Fed gloomy on R.I. office-leasing outlook

Ted Nesi PBN 10/27/2009 15:18

DOWNTOWN PROVIDENCE office rents have fallen by roughly 10 percent over the past year, according to the Federal Reserve. Foreclosures on office buildings are expected to remain high in the coming months.

BOSTON – The Federal Reserve Bank of Boston has offered a gloomy short-term outlook for the commercial real estate market in Providence in its periodic survey of economic conditions in New England.

Suburban office rents in Rhode Island have fallen roughly 20 percent over the past year, while office rents in downtown Providence are down by 10 percent or slightly more, the Fed’s latest survey of business leaders found.

“There is little room for Providence’s rents to fall further, given costs,” the central bank said. The survey – known as the Beige Book, for the color of its cover – is used by the central bank to help guide monetary policy.

Although building managers in Providence have seen a seasonal uptick in leasing volume since Labor Day, they described the activity as “not robust.” At the same time, the number of office-building foreclosures is rising and “is expected to remain significant in coming months.”

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