The growth of mixed-use development and residential shifts towards urbanization and downtown living have been closely monitored trends over the past decade. There are a number of benefits to developing properties of this type that include integrated management and financial incentives. A growth in interest in downtown often helps revitalize residential and commercial buildings as more people want to both live and work downtown.
However, if developers keep building, will residents keep flocking to Downtown Syracuse? The answer remains a resounding “yes” after a recently completed market assessment study sponsored by VIP Structures.
The rental rate for Downtown Syracuse apartments stands at 97.3% among the 1,400+ units inventoried. Only about 1 in 3 complexes have waiting lists. There also appears to be a softening in the market among 2-bedroom units as two-thirds of the vacancies are of the 2-bedroom type.
Among the over 40 apartment complexes analyzed in Downtown Syracuse and Franklin Square, the average monthly rental cost was $1,270 for a 1-bedroom unit and $1,950 for a 2-bedroom unit. Costs ranged significantly based on amenities and square footage.
The majority of residents living in the Downtown Census Tract fit a young professional audience. American Community Survey (ACS) data from the U.S. Census estimates half of the residents in Downtown Syracuse are aged 20 to 34, with more than 1 in 3 in the 25-34 millennial age group. Higher costs of rental properties Downtown are believed to push these young professionals into less expensive 1-bedroom units, which explains the majority of vacancies in the 2-bedroom units.
The comprehensive market research study completed by Drive Research also reviewed condominium properties and reviewed office space vacancies in Downtown Syracuse as part of the process. Using secondary data and tax rolls from ongov.net, it was concluded the average sale price of higher-end condos sold in Downtown Syracuse since 2012 was $378,000. Only seven of the 165 condos (4%) researched at the time as part of the study were for sale. The study was conducted in January and February of this year.
In addition to the inventorying of residential housing and demographic market analysis, Drive Research also conducted executive interviews with commercial office space stakeholders and online surveys with over 300 Central New York residents. The survey was distributed through a research panel and social media.
The survey confirmed the high demand for residential living options in Downtown Syracuse. Among residents living downtown currently, an estimated two out of three planned to remain downtown for at least the next 5 years.
The largest barriers to moving downtown were driven by a perception of security and safety. Other barriers included a lack of affordable housing and lack of a grocery store. Downtown residents were significantly more likely to rate the safety and security downtown higher than those not living downtown, indicating some level of misconception. Those living downtown currently view it as safer and more secure than those living outside of downtown perceive it to be.
Even with barriers existing, nearly 3 in 10 residents of Central New York indicated they were at least “somewhat interested” in moving downtown within the next 5 years. Furthermore, most who live or want to live downtown have no children under the age of 18 living in their household currently.
A separate online survey targeted C-level decision-makers for office space in Onondaga County and Downtown Syracuse. The intent of the survey was to better understand office space preferences and needs. Over 100 Central New York professionals responded to the office space survey.
The most preferred type of office space among Central New York professionals was private offices (67%), followed by open workspaces (39%), home office (25%), half-partitions (20%), and cubicles (15%).
In the survey, more professionals stated that open-workspace has decreased productivity of employees in their office than increased it. About 2 in 3 professionals had an interest in working in Downtown Syracuse, which is an increase in the past 5 years for Central New York organizations.
Many developers like VIP Structures have been leading the way in the redevelopment of old historic buildings in Downtown Syracuse into vibrant mixed-use communities. VIP Structures is an integrated design-build firm that has worked with developers, not-for-profits, and private firms throughout the region. Interested in discussing your next development project with VIP Structures? Contact us below.