Matt Tedder, The
Kingsland Company

Chittenden County has seen some unique growth over the past 36 months.  With a total population of 160,000, 25% of the state, Chittenden County provides an interesting backdrop for commercial real estate.  Consisting of the ten uniquely defined towns of Colchester, Essex, Milton, Shelburne, South Burlington, Charlotte, Hinesburg, Burlington, Winooski, and Williston, each sub market is experiencing growth across a range of specific asset classes.   

Milton, Vermont (retail/multifamily)

With a total population of 10,667, up 12.5% in the past fifteen years, Milton is the growth story within the county.  Located on the northern edge of Chittenden Co., Milton has established itself as a vibrant suburb of Burlington. Long considered a “bedroom community” of Burlington, Milton is quickly reestablishing its image as a “hip and fun place to live” with substantial growth in both the retail and multifamily asset classes. Over the past 3 years the town has seen the construction of 175 apartment units and over a 40% increase in retail space, with a vacancy rate just below 4.5%.  Spotlighting the success of the retail market is the 100% absorption of 6,000 s/f of small shop retail space at 11 Haydenburry Dr.  This redevelopment is adjacent to a newly constructed 47,000 s/f Hannafords and was backfilled in less than 12 months by a pediatric practice, laundromat and eyecare center.

Burlington, Vermont (CBD office)

Downtown office space in Burlington continues to boast a healthy 6.6% vacancy rate.  While 2015 saw very little new supply added to the market, the next 24 months could be a very different story with the proposal of an additional 330,000 s/f at the planned redevelopment of the Burlington Town Center, and the redevelopment of 57,000 s/f of class A space at 1 Burlington Sq.  Another highlight of the CBD office market is the conversion of a large block of class B space to shared or small work space office environments.  The once single tenant 19,764 s/f at 77 College St. was purchased by a developer and converted to traditional small offices ranging from 1,000 - 3,000 s/f.  At 47 Maple St., the owners converted the top two floors (25,000 s/f) into a shared office environment, with a combination of small offices, shared conference rooms, and work stations. At 209 College St. local entrepreneurs have converted 3,000 s/f of third floor walk up space into a unique shared environment called “Study Hall – Work Club,” a membership based platform, where members have a range of options from $55 monthly access to $350 for a full time desk.  All three unique projects offer limited to no parking and all have a vacancy rate at or around 1%.

Shelburne, Vermont (industrial)

While often considered the sleepy rural suburb of Burlington, Shelburne has seen an increase in industrial activity over the past 36 months.  With a current vacancy rate of 8.6%, a slight decrease from 8.8% in June of 2015 and just above the 6.4% rate for Chittenden Co., the Shelburne market will see an additional 82,000 s/f of inventory online by 2017.   The 60,000 s/f expansion of Shelburne Green Industrial/Office Park is highlighted by the 9,800 s/f tenancy of local brewery Fiddlehead.  In addition, Vermont Railway plans to construct a 22,000 s/f facility just north of the town village on Rte. 7.   

South Burlington (multifamily)

Currently, the Chittenden County multifamily vacancy rate hovers around 3%, up slightly from 2.8% in June of 2015.  The primary driver of this increase in vacancy is a sharp increase in supply over the past few years.  Countywide, developers plan to bring 534 new units to market this year with 165 of these units in South Burlington.  Highlighting this growth is the recent completion of 63 units by Pizzagalli Construction at 1690 Shelburne Rd.  In addition, O’Brian Brothers has recently completed 24 units at the intersection of Hinesburg Rd. and Kennedy Dr. and have begun the permitting process for an addition 300 rental units to come online in the next 36 months.

Matt Tedder is principal of The Kingsland Company, Burlington, VT.