As 2024 drew to a close, the Capital Region counted just over 4 million square feet of empty office space in its nearly 31 million-square-foot market.
That was about on par with the picture at mid-year, but was higher when compared with year-end 2023, when 3.8 million square feet were vacant.
And as is usually the case, Albany’s central business district had a relatively high vacancy rate, pushed up by the availability of top-of-the-line Class A space.
Why the rise there?
John MacAffer, managing director of the local office of global commercial real estate firm CBRE, said no one factor could be cited, such as a big tenant leaving downtown.
“Overall,” he said, “the market is in flux – some firms have fully embraced remote work while others are ending [it] and calling employees back to work in the office.”
How that balances out “is still the worry of the office landlord, and a lot of companies are still figuring it out,” MacAffer added.
CBRE-Albany just released its second-half 2024 report on the office market, which encompasses buildings of at least 10,000 square feet not owned by a government or institution in Albany, Rensselaer, Saratoga, Schenectady and Warren counties.
Calculations are made on total square footage, vacancy, and asking lease rates for the cities of Albany, Glens Falls, Saratoga Springs, Schenectady and Troy; the suburbs, which include nearly a dozen of the region’s big towns, get their own set of numbers.
Square footage can be added to or subtracted from the semi-annual reports as new construction comes to fruition or as space is removed from the office inventory if converted to other uses, such as residential.
CBRE-Albany notes that in five of the last six reports, overall inventory was down due to limited new construction and “a strong conversion pipeline” in response to high housing demand. But that’s changing, and future reports could show slight inventory increases.
The suburban submarket and the cities of Troy, Glens Falls and Saratoga Springs all showed a decrease in vacancy in the second half of 2024, according to the report, while the city of Schenectady, like Albany, showed a rise in empty office space.
Saratoga Springs, in fact, showed the lowest vacancy rate in the market, at 6%. MacAffer said that was due in part to the limited inventory there – just 600,000 square feet, compared with Troy’s 1.2 million square feet, which is the next smallest inventory.
He also said the Spa City has become “very popular … to live, work and play in,” with Albany law and financial firms putting branches there to satisfy the work-location preferences of existing employees and to attract new workers.
Asked what impact may be felt as the former College of Saint Rose campus in Albany is redeveloped, MacAffer said that remained uncertain. A new county land authority will oversee how its 40 acres and 70-plus buildings are reused.
“It is an interesting scenario if the county moves out of downtown to the campus,” he said of an idea floated to consolidate some county offices there, “but a lot remains to be seen if a plan like that actually happens.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.
