The Space Race

Each time I pass by the Ten Thousand Villages store on Main Street in Northampton — a retail chain that sells what is described as ‘fair-trade products’ from 100 artisan groups in 30 countries — I am reminded of how I perceive the Northampton office real estate market: 10,000 psychotherapists.

Northampton is honeycombed with countless small-office users. Some are attorneys, some financial advisors and other professions, but most seem to be related to providing some sort of mental health counseling. The net result is that, in the aggregate, they all occupy a vast amount of space in very small increments — about 200 square feet on average.

They are all over town. Much of the upper-floor space on both sides of Main Street hasn’t changed much from the days of Sam Spade. Small offices with translucent-glass-paneled doors and creaky wooden floors. All are walk-ups, although some buildings do have elevators. The former Elks Lodge on Gothic Street was sold several years ago and converted into very handsome office space. What was once a tired and fairly wide-open building is now the home of dozens of social service or mental health practices. This is typical all along the Route 9 corridor into Florence and Haydenville as well. And nowhere is this pattern more apparent that at the Potpourri Plaza on King Street.

This community of small users is generally a favorable one from a landlord’s perspective, in that many tenants in one building have a tendency to spread the risk. But it makes it very difficult for a company in need of 5,000 square feet or more to find space in the city. Many companies looking to expand simply can’t find large blocks of space in the market. Everyone wants to be downtown, and who can blame them?

The largest single office user in Northampton is Disney Publishing, which occupies 10,000 square feet at the former post office building on Pleasant Street.

In 2006, Disney relocated from another downtown site, the Roundhouse Building, which contains 15,000 square feet of truly unique space. That building, just off Pulaski Park, proved too large for Disney, which was downsizing at the time. Also, the building was about to go through a protracted environmental remediation by Baystate Gas. That project will be concluded within the next few weeks, and the building will once again be available to accommodate the needs of larger users.

Another large space, at 109 Main St., was most recently occupied by Fleet Bank, a victim of the merger and acquisition quicksand, and is in the process of being leased. The owners have responded aggressively to unmet requirements in the market, and the results are becoming apparent.

The top floor of Thorne’s Marketplace is also being converted into much needed larger blocks of downtown office space — fortunately, however, not at the expense of relocating PACE into nearby street-level space on Main Street.

I expect this available supply of larger blocks of downtown office space to be absorbed in the next 12 to 18 months. Once the inventory is depleted, the only alternative will be new construction elsewhere.

The project planned for King Street, a commercial-office mix at the former Lea Honda dealership site, was out of step and has stalled. Rents associated with new construction there, coupled with a less-than-desirable ‘strip’ location, have proven to be impassable obstacles for the project. The Hospital Hill commercial development, at the site of the former Northampton State Hospital, will offer a more desirable office venue than King Street, but it’s a far cry from downtown. And, as previously mentioned, everyone wants to be downtown.

Several office-conversion projects that are not located downtown have succeeded nonetheless. The Cutlery Building complex in the Baystate section of the city is near capacity and offers affordable and somewhat non-traditional office space. The building has plenty of on-site parking and is located in a safe rustic setting along the Mill River. While such office locations can succeed as alternatives to downtown, they often prove to be much more challenging.

Northampton’s allure is so compelling that, most days, we are willing to endure the inconvenience of circling the block for a parking place only to wait again for a table at one of downtown’s many wonderful restaurants.

I guess that’s why those 10,000 psychotherapists are there, too — ready to help us work out all such stresses and pressures in our lives.

John Williamson is president of Springfield-based Williamson Commercial Properties; (413) 736-9400.