Category Archives: Office
One definition of “shadow” is as follows: a reference to proximity, ominous oppressiveness, or sadness and gloom.
It is a common misconception that the term “vacant space” or “vacancy rate” is an indicator of all the space available in a given market or property. “Vacancy” simply refers to space that is not leased. However, “available space” or “availability rate” is a more accurate indicator of all the space available or will be available soon. The difference between vacant and available space is often referred to as “shadow space.” Shadow space is space that is currently occupied but is still being marketed for lease. The tenant does not have to physically occupy the space, they simply must be paying rent and have a lease on the space. A recent example of this is marked by Dollar Bank having announced they will be moving from Gateway Center to 20 Stanwix Street. The owner of Gateway Center knows of this upcoming vacancy and of its availability in the future, i.e. “shadow space.” This is different than sublease space in that shadow space can be directly marketed by the landlord.
At the end of Q3 2020 there was 4,402,254 square feet (SF) of available space either for lease or sublease in Pittsburgh’s Central Business District (“CBD”). Of this square footage, 3,731,808 SF is vacant. The difference of 670,446 SF is shadow space.
The amount of shadow space can be an indicator of economic conditions. Similar to sublease space, if there is more shadow space available, it is a sign that current tenants do not plan on renewing their leases or are downsizing. Typically, this is due either to a reduction in business or a downsized workforce.
At the end of 2019, the CBD had 684,308 SF of shadow space available. The availability was significant and represented 16.8% of all the available space on the market. Yet, as COVID-19 emerged over the next six months, the amount increased by a staggering 32.3% to represent 19.9% of the available space at 905,231 SF.
Going forward, as the COVID-19 pandemic continues, more shadow space is expected to come onto the market. At the same time, some of this space will turn vacant. It is very hard to predict or track shadow space because, by definition, the space is occupied. Just like any other market indicator or statistic, the variables are very fluid. Availability numbers are not to be confused or deceived by vacancy statistics. The true story lies in a vital combination of simple vacancy rates and the often overlooked yet very critical shadow space.
Colliers International brokers Edward Lawrence and Paul Horan assisted RJ Community Management in the selection of their newest office location at 4900 Perry Highway. With a move in date of August 2020, the 9,350 RSF suite allowed RJ Community Management to consolidate their Cranberry location and Arnheim & Neely’s Oakland location, a firm they acquired in August of 2019.
RJ Community Management is a firm which specializes in Homeowners and Condominium Association management including single family homes, townhomes, patio homes, condominiums, mixed use, and luxury high-rise buildings.
“We are thrilled with our new office space and location just off the Perrysville Highway exit of I-279. Paul and Ed of Colliers International did a fantastic job helping us locate several options for our growing business and ultimately negotiate a sensible rental rate on a space that will serve our clients well and help us continue to expand our business,” said Robert Gillenberger, Jr. of RJ Community Management, “We started the process before COVID-19 and worked through the challenges of the virus in a time when most offices are shutting down for remote work. Our new space allows for our employees to work safely, stay socially distant, and provide for a healthy work-life balance.”
This new space at Perry Highway will allow RJ Community Management to better serve their clientele of more than 140 associations and 10,000 households through a more efficient single floor layout, an outdoor area, and prominent exterior signage. The size of the suite also allows room for the anticipated growth of the firm which currently employees 25 people.
“Despite the challenges presented by COVID-19, Colliers was very pleased to meet and actually exceed RJ Management’s initial expectations related to the new office,” stated Horan. “This was done through the use of technology and the cooperative efforts of Joe Tosi of Oxford Development Company who represented the building owner, Rick Stern.”
For more information about RJ Community Management, please visit www.rjcmgt.com.