Banking & Finance

Corner Lots Command Top Commercial Dollars

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BOARDMAN, Ohio — One factor that can determine the success of a corner commercial lot is whether the business there and its patrons have seen the light — a traffic light, that is.

Brokers Bill Kutlick, of Kutlick Real Estate, Dan Crouse and Chuck Joseph of Routh-Hurlbert, John S. Horvath of Northwood Real Estate Services’ commercial division, and developer James Sabatine Jr. all agree that corner lots are high in preference, especially in busy commercial districts.

“A traffic signal at the corner is always better,” says Kutlick, broker and owner of Kutlick Realty LLC, Boardman. There are other factors to consider before one should develop or commit to setting up shop at a busy corner, he continues, traffic control being one of them.

Turning lanes and how they’re configured must also be taken into consideration, and whether regulations permit left and right turns out of the corner lot, or left and right turns into the parcel. Often in high-traffic areas, right-turn-only regulations can hamper access, Kutlick says.

“It’s not that simple. All of these things are taken into consideration when you pick a site,” he says.

Because of their high visibility and access, corner properties in the Mahoning Valley command top dollar in the region’s commercial real estate marketplace.

This demand is evident as some of the largest retailers in the country occupy these corner lots, especially those at major intersections in Mahoning and Trumbull counties.

However, these addresses come with additional considerations such as traffic signals, zoning, parking and ease of entrance and exit.

“Retailers want to see activity and high volumes of traffic,” he says. “You’d rather be in an area with high volume than not.”

Corner positions along Boardman-Canfield Road, a five-mile stretch of U.S. Route 224, are among the most sought after lots in Mahoning County, he says.

Other stretches of thoroughfare, most notably the area around the intersection of Market Street and McClurg Road in Boardman, present exciting growth potential, he says.

Most of the corner properties Kutlick’s helped develop in Mahoning and Trumbull counties have fared well, he reports.

At the intersection of Boardman-Canfield Road and Tippecanoe Road, for example, Kutlick recently brokered a deal to bring Cortland Bank to Boardman. “They wanted a flagship bank in this area,” he says.

Well-known names in retailing dominate most corner lots on the major intersections along Boardman-Canfield Road, Kutlick says.

It’s common to see a CVS Pharmacy, a Walgreens, or a Rite-Aid at many of these high-traffic corners that have proper traffic control.

“Drug stores and gas stations are popular on these corners,” he says. “Second would be restaurants and retailers, and then offices.”

Corner properties along Boardman-Canfield Road continue to attract attention. Earlier this year, CTW Development in Boardman purchased the small plaza at the corner of 224 and Tiffany Boulevard.

The biggest driver for a corner lot is its proximity to commercial activity, observes Chuck Joseph, broker for Routh-Hurlbert, a commercial and industrial real estate brokerage firm based in Warren.

“Corners are attractive, but all of the factors need to be taken into account compared to other locations,” Joseph says.

The critical component is the corner traffic light, a requirement of big companies such as Walgreens and CVS, adds Dan Crouse, also a broker at Routh-Hurlbert. “It guarantees that people are stopped. So, your visibility is higher,” he says.

State Route 46 in Howland, for example, is among the busiest corridors in Trumbull County because it enables access to the Eastwood Mall and leads to state Route 82.

Over a 24-hour period, an average of 20,394 vehicles pass through this mile-long section between Eastwood Mall Boulevard and the 82 interchange, according to data from the Eastgate Regional Council of Governments traffic study.

“If you’re driving down 46 towards 82 from the mall, you can make a right-hand turn pretty easily,” Crouse notes. It’s more difficult to access corner parcels to the driver’s left, however, especially when there is no traffic signal.

“The Dunkin’ Donuts on 46 is hard to get to because there’s no traffic light,” he observes. “All corners are not created equal. There’s a difference between [U.S. Route] 224 and Market Street and 224 and West Boulevard.”

Moreover, additional regulations might come with developing a corner, Joseph notes. Route 46, he notes, is a state highway, and it’s mandated that curb cuts be a minimum of 200 feet wide.

The state also requires that the development be set back from the road and additional drainage and water retention improvements might be necessary. All of this can affect the design, layout and price tag of developing a corner project.

“There are many factors,” Joseph says. “It’s like peeling away an onion. Look at the traffic count, traffic signals, ingress and egress, and then what it will take to build.”

Corners are more visible and expensive, but that doesn’t necessarily mean that they’re better sites, Crouse says. “They [A company] may spend a lot of money on engineering and design before they proceed with a sale,” he says.

The attractiveness of a corner lot at Route 46 and Mines Road in Howland near the Eastwood Mall easily outweighed the other factors when it came to developing that property, observes James Sabatine Jr., a commercial real estate developer in Canfield.

“We brought in a Five Guys and Jimmy Johns” at the site, Sabatine reports. Two thousand square feet remain available in the middle bay of that building, which has commanded plenty of interest. “Interest has been great, and these are very long-term deals,” he remarks.

Sabatine recently acquired another open lot suitable for development along 46 and Kenyon Drive where a traffic signal is planned. The developer says he’s completed three deals along Route 46.

“Without a traffic light, you’ve got to comply with zoning setbacks, and they’re more difficult to develop,” he says. “However, the access is better. Visibility is better. So you get the best of both worlds.”

Corner parcels by their nature command higher prices than in-line properties, Sabatine says, but notes that some find the investment is well worth it. Property at the corner of U.S. 224 and Raccoon Road, he points out, recently sold for roughly $1 million an acre. “That’s good money,” he says with intended understatement.

On average, a corner lot in a busy market can sell for 50% to 100% more than a traditional in-line property, reports John S. Horvath, broker/associate for Northwood Real Estate Services’ commercial division.

“Corner lots are always preferred,” he says, while those parcels slightly off the corner are more valuable than the middle parcels.

And while visibility and traffic counts are important, Horvath relates that too much traffic, especially at corners without signals, can hinder the flow into and out of the business.

“Sometimes you can only get a right-turn in, right-turn out in Boardman,” Horvath says. “Nothing beats a great location, but all of this comes into play.”

Published by The Business Journal, Youngstown, Ohio.