Projo Biz Blog

By Christine Dunn
Journal Staff Writer

PROVIDENCE _ The city's residential real estate market, though far from robust, is faring better than its commercial property market, according to speakers at a forum organized by the Providence Preservation Society.

In 2009, the spring home market _ which is to real estate what Christmas is to retailers _ "didn't happen" until late June, due to a "paralyzed" market in the first half of the year, according to Libby Isaacson, chief operating officer of Residential Properties Ltd.

But despite the late start, the single-family market came back to life in late June, and July statistics from the Rhode Island Association of Realtors showed an 8.8 percent increase in the number of sales year-to-year; and the percentage of sales that were "distressed" declined from 44 percent to 30 percent, she said.

Distress sales, which involve foreclosed and short-sale properties, are still dominating the multifamily market, and they accounted for 71 percent of July sales in that segment, Isaacson said. The reduced inventory of multifamily properties is actually creating a "seller's market" in that segment, she said.

Isaacson was speaking about the 2009 single family and multifamily markets to fellow housing professionals Wednesday morning in an unfinished 32nd-floor penthouse suite at the Residences at the Westin condominium tower.

The morning gathering was organized by the Providence Preservation Society for its business members.

Alden M. Anderson, Jr., senior vice president /partner of CB Richard Ellis, reported on the state of the city's commercial real estate market, and Arnold "Buff" Chace, president of Cornish Associates, spoke about trends in the downcity rental market.

Anderson said that "although there is some activity" in the commercial market, "there is a lot of space available," which is driving down prices and driving up vacancy rates.

The combined downtown vacancy rate increased from 15.17 percent at the end of 2008 to 17.87 percent by the middle of 2009, although some individual districts, including the Empire District, South Main, Promenade and Jewelry districts, fared better than average.

Anderson said the Capital Center, home to the vacated Gateway Center, increased in vacancy from 12.91 percent to 30.78 percent in the first half of 2009.

In the Class B commercial market, "people don't really see the bottom of the market yet," he said.

"Almost no sales are taking place, escept for ... distressed sales," he added.

The event's host, Procaccianti Group, owner of the Westin Hotel and developer of the Residences at the Westin , also participated in the program; corporate vice president and legal counsel Michael Voccola was scheduled to speak on the Providence condominium market.

Without talking specifics, Voccola faulted the media for reporting on discouraging sales statistics for condominiums, and most of his comments centered on the high-end Residences, which have turned to rentals to weather the recession.

Voccola said one of the penthouse condominiums, which are sold unfinished, recently sold for $2.1 million, and the owner is spending about $800,000 to finish the unit.

The Residences are now at 83 percent occupancy, with a mixture of sales and rentals, Voccola said.

 Tags  Providence RI real estate

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