For rent

The Compass - - EDITORIAL - This ed­i­to­rial orig­i­nally ap­peared in The Tele­gram

There’s al­ready lots of new space to fill. There are many ar­eas where the grass has yet to even grow in over the last big hope­ful round of con­struc­tion in re­cent years.

It is, ad­mit­tedly, a small sam­ple in an older part of the com­mer­cial real es­tate mar­ket in St. John’s. It’s an un­sci­en­tific sam­ple, for cer­tain, but enough to start a dis­cus­sion.

A quick 40-minute walk around the area of five streets in the O’Leary In­dus­trial Park area - O’Leary Av­enue, Thor­burn Road, Austin Street, Pippy Place and Hal­lett Cres­cent - brings you past 23 com­mer­cial prop­er­ties avail­able for rent and more than 105,000 square feet of avail­able ware­house, in­dus­trial and of­fice space. (An­other 20,000 square feet has come off the mar­ket in re­cent weeks in the same area.)

It makes you won­der about how the mar­ket in the North­east Avalon is go­ing to change dur­ing th­ese times of tight fi­nances for both busi­nesses and their clients.

The pro­vin­cial govern­ment - it­self a prom­i­nent renter in the O’Leary area - is look­ing at a fall down­siz­ing bud­get. One of the ways to save money af­ter shrink­ing the civil ser­vice is to pull staff back into the build­ings the govern­ment al­ready owns, free­ing up, you guessed it, even more com­mer­cial space.

On top of that, new fees and taxes from the spring bud­get are tak­ing a bite out of the pur­chas­ing power of or­di­nary cit­i­zens.

So, is there any rea­son to be bullish about the chances all that rental prop­erty will ac­tu­ally fund oc­cu­pants? It’s hard to know, and the few peo­ple who do know - who are there on the ground - don’t seem to want to tell you, even off the record.

No of­fence to real es­tate agents, but they do live in a world of the eerily pos­i­tive: in­creas­ing prices make the real es­tate world go around, and many are loathe to speak pub­licly about down­turns.

No one wants to be the one who over­turns the ap­ple cart.

But com­mer­cial space is both emp­ty­ing out and still grow­ing - the Glen­crest devel­op­ment alone is promis­ing one mil­lion square feet of new re­tail space and over 150 acres of new in­dus­trial devel­op­ment, let alone the in­creas­ing space open­ing up along Ken­mount Road and other edges of St. John’s. So far this year, there has been $60 mil­lion in com­mer­cial devel­op­ment work ap­proved by St. John’s city coun­cil, and some of that is in new con­struc­tion of of­fice and other space.

Its own­ers ei­ther have to find cus­tomers among the lim­ited num­ber of new busi­nesses, or can­ni­bal­ize clients from ex­ist­ing lo­ca­tions.

There’s al­ready lots of new space to fill. There are many ar­eas where the grass has yet to even grow in over the last big hope­ful round of con­struc­tion in re­cent years.

And that takes us to the fi­nal and most crit­i­cal ques­tion, es­pe­cially if you’re some­one who owns a large-ish - and empty-ish - piece of com­mer­cial prop­erty.

We can keep build­ing it, but who will come?

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