YOUNGSTOWN, Ohio – Alan Friedkin will have a perfect view of the new inpatient rehabilitation hospital being developed by Mercy Health – Youngstown and Lifepoint Rehabilitation.
Ground was broken Aug. 31 at a long-vacant property last occupied by Kmart, across the road and just south of Burgan-Friedkin Commercial Group’s offices at 3223 Belmont Ave. in Liberty.
It’s a project that “should stabilize the area,” Friedkin, who brokered the sale of the property, says.
“Everybody’s excited for it to happen,” he continues. “Then after they’ve completed that by the end of 2024, there’s talk of doing a phase two with another facility on the same property.”
Also under discussion is a hotel near the hospital that would be connected to one of the Marriott brands at the site of the former Days Inn on Motor Inn Drive. The project remains in the planning stages as the developer seeks required variances.
Other developments in the township include a new apartment complex targeted to seniors scheduled to open next spring. Friedkin says he is working with a fuel-convenience store chain on a site further north on Belmont.
Friedkin isn’t the only local real estate professional who is optimistic about the commercial market.
“Good sales are happening in the marketplace,” says Jim Grantz, broker associate with Edward J. Lewis Inc. in Youngstown. “Lease space has been moving briskly.”
The market for flex space is “extremely active,” as well as for multifamily units, says Don Thomas, managing partner of Platz Realty Group in Canfield. Flex space properties that come on the market “go pretty quickly” because of the lack of inventory.
Rent for flex space in Boardman is “higher than it has been,” Thomas says. Depending on the location and quality of the property, space that was between $4 and $6 per square foot is now leasing at between $7 and $12 per square foot.
Grantz reports he’s has done four flex space leases in three buildings. Lease rates for space under 6,000-square-feet are at an all-time high, he says.
‘EXTREMELY ACTIVE’
Pent-up demand is finally manifesting, Thomas says. Boardman and Austintown are “extremely active” depending on the space and multifamily units are attractive to out-of-town investors.
“A lot of good things” are happening locally, he says, citing various projects in Lordstown, activity at the Youngstown Business Incubator and additive manufacturing, and the Shell cracker plant in Monaca, Pa.
“All of those are having an impact on demand,” Thomas says. “There’s a shortfall of housing because people are moving back to the area. There’s a shortfall of warehouse space. A lot of the older stuff has been torn down and not a lot has been built.”
Grantz says he recently closed on an 8,500-square-foot office building in Austintown that a local family purchased to consolidate its businesses.
“I’d like to have more inventory because we’re moving stuff that we’re working on,” he says. Companies he has been dealing with include a pet products distributor, a medical supply business, an ambulance company and an engineering firm.
“There’s been a good deal of flow with office space,” Grantz continues. “For instance, I completed an office lease on [U.S. Route] 224 in Boardman that is an out-of-town engineering company that’s doing work for Ultium Cells.”
Demand remains strong for office space in the 600- to 1,500-square-foot range, and most suburban spaces are filled, Platz’s Thomas says. Along U.S. 224 from Interstate 680 to west of Tippecanoe Road in Canfield, there is “minimal” office space available.
BUILDING SPACE
Thomas points to strong demand for space in the western part of Trumbull County. “We bump up to a lot of developers and try to convince them to take a swing at constructing a flex-space building in a shovel-ready area,” he says. “I think we can fill it.”
In markets like Columbus, Cincinnati, Cleveland, Pittsburgh and Indianapolis, there are plenty of ready-to-lease spaces, while there is a lack of such space locally, Thomas says.
Potential developers are warming to developing new local space “but everybody’s cautious just because of the national news,” he laments.
“There’s an awful lot of companies that are kicking the tires here because the costs are so much different than Cleveland, Columbus and Pittsburgh,” Thomas says. “But they don’t want a two- or three-year project. They want a six-month remodel and move-in and we just don’t have that space.”
GAUGING INTEREST
Vince Hillard of Berkshire Hathaway HomeServices The Preferred Realty, who markets commercial real estate in eastern Ohio and western Pennsylvania, says inquiries are about half of what he had been getting. Where Ohio typically had been a stronger market, he now sees activity picking up in Pennsylvania.
“It’s a little mixed,” Hillard says. Office leasing has slowed and he doesn’t have many retailers looking for space.
In Hermitage, Pa., rumors fly about potential development spurred by the new FedEx Ground distribution center. But Hillard says he hasn’t seen or heard of anything new happening there.
The owner of a nearby Quality Inn had been attempting to sell the property but delisted it “to see what kind of development happens in that area.”
Friedkin says the area is attractive because it doesn’t experience some of the environmental extremes that occur Florida and California. “There’s a lot of interest in our area,” he says. “Our labor is good. People are coming here because the cost of living is better.”
Plans are in the works for a 12,000-square-foot plaza on Western Reserve Road in Boardman, Friedkin says.
“We’ve got 40 acres off 680 near Western Reserve Road where owners are willing to build to suit for any type of warehouse project,” he adds.
Pictured at top: A rendering shows how the Mercy Health and Lifepoint Rehabilitation hospital will look when it opens at the end of 2024.