YOUNGSTOWN, Ohio – Interest in manufacturing and distribution space, multifamily housing and a renewed demand for office space are all helping to drive activity in the Mahoning Valley commercial real estate market, local industry professionals say.
Commercial real estate activity has been “quite positive,” according to Marlin Palich, general manager/principal broker for Berkshire Hathaway Home Services Stouffer Realty.
Among the factors driving local interest is the lower price of real estate compared to other areas, such as California, “whether you’re leasing or purchasing,” Palich says.
“We have a great workforce here, with a good pool of skilled workers as well as those with college educations,” he adds. “It doesn’t always have to be about college”
Don Thomas partner/owner at Platz Realty Group, says his agency “continues to be extremely busy. We’re still gathering listings and still selling.”
Thomas credits a Mahoning Valley economy that “has never been as good as it’s been” over the past five years.
He points to manufacturing and distribution development in Lordstown and growing interest surrounding additive manufacturing at the Youngstown Business Incubator as well as Steelite International relocating its global headquarters to the YBI campus. Thomas also cites the Shell ethane cracker in western Pennsylvania.
“It used to be that we would pray to have one good thing happening in the Mahoning Valley,” Thomas says. “We probably have 10 to 12 good things not just being talked about but shovels in the ground.”
Deal flow for commercial space is “still there,” Jim Grantz, broker associate with Edward J. Lewis Inc., says. He sees more leasing and fewer sales compared to last year, which he attributes to interest rate hikes and changes in lending.
“The majority of the activity that we’re seeing involves distribution and manufacturing space [but little is available],” Grantz says. Each month he takes several calls from parties looking for 50,000 to 200,000 square feet of space, he says.
“We’ve had some good activity with vacant land and new projects that are coming along,” he continues.
Grantz has two properties for sale along state Route 7 that “took a little while” but both are under contract.
Alan Friedkin, of Burgan Friedkin Commercial Group, reports he is working with retailers interested in occupying existing storefront properties, as well as fast-food operators. In addition, he is working to get leases for “some newer types of users in the market.”
Other than Meijer, Friedkin doesn’t “see any of the other bigger players coming into the market.” Meijer is poised to open its second store in the Mahoning Valley in Niles and to begin building a third in Austintown.
Earlier this year, Friedkin arranged the sale of the long-vacant property on Belmont Avenue in Liberty Township once occupied by Kmart. It’s where the Mercy Health Rehabilitation Hospital will be built. He also worked on deals for several new car washes and oil change operators.
The lack of available “ready-made space,” including flex space in the “sweet spot” of between 5,000 square feet and 25,000 square feet, is an obstacle to bringing more opportunities to the area, Thomas says.
A large project that requires 500,000 square feet would take 18 months to two years from conception to completion, he explains.
“Most companies don’t have that kind of time,” Thomas says. Although risky, he sees a “real opportunity” for developers to build space ready to rent or lease.
Palich points to a manufacturing property in Cuyahoga County that sold within three days after he listed it.
Because of the scarcity here, an investment group bought a 100,000-square-foot building in Warren for $400,000 and is putting “well over $1 million” in updates into the property, including a new roof and new lighting, Grantz says.
“We simply don’t have a lot of inventory to show them right now,” he says.
A commercial plaza under construction at U.S. Route 224 and Market Street in Boardman is represented by Platz Realty Group and Thomas.
The anchor tenant, Sapphire Aesthetics, will lease about 2,800 square feet of the property and Thomas says he is “working on a couple other things that would complement that business.”
Little space in general is available on Route 224 in Mahoning County, from Interstate 680 in Poland to the Village Green in Canfield.
Any office-related space “comes on and goes off pretty quickly if it’s priced correctly,” Thomas says. As a result, activity is spinning off onto Market Street and South Avenue.
Spaces are leasing for $13 to $15 per square foot and sale prices depend on the location, Thomas says.
Another strong segment is multi-family units, driven in part by the scarcity in single-family dwellings seen in recent years.
“Multifamily continues to be a hot market,” because out-of-town investors – primarily from the coasts – buy properties because of the perceived value stream, Thomas says.
At the same time, there is greater demand for apartments here than inventory. “We just don’t have them,” he says.
Of the deals Friedkin brokered this year, one was for the site of an $11 million senior independent living complex in Liberty.
“Rentals tend to be popular,” Palich says, not just here but in other markets his office covers, including Cuyahoga, Stark and Summit counties. Multifamily properties are the No. 1 market all over, he says.
Pictured at top: Construction has begun at U.S. Route 224 and Market Street in Boardman for a commercial plaza that will house Sapphire Aesthetics and Wellness.