Commercial Brokers Meet Changing Needs
YOUNGSTOWN, Ohio – Real estate agents and brokers report a strong market here, even with the fluctuations in the national retail real estate landscape.
The retail market was “hit pretty hard” with the recent wave of store closings, but there is strong activity in smaller spaces, reports John Horvath, sales associate with the commercial division of Berkshire Hathaway HomeServices Northwood Realty Services in Poland.
“Generally, there is a high level of optimism out there,” he says. He is encouraged by the consistent demand for retail and office space during the winter months.
As in residential real estate, businesses don’t want to make moves during winter, particularly offices that have considerable equipment to move.
“Typically our activity drops down quite a bit over the winter months. We didn’t really see that this winter,” Horvath says. “That leads me to believe we’re going to have a stronger spring and summer.”
Horvath reports most of his work for site acquisition is for new entries coming into the market, including a national tire-and-battery chain looking at sites in Mahoning and Trumbull counties for its first store here.
He also is seeing “a flurry of activity” with Dollar General stores, one of which is under construction in downtown East Liverpool. The stores in the chain “do well in all markets across the board,” Horvath says.
The Mahoning Valley has “good inventory to promote,” says Bill Kutlick, broker/owner of Kutlick Realty, Boardman.
Although there is “quite a bit of vacancy” because of closings by chains such as Sears, Staples Toys R Us and Babies R Us, sales are strong for retailers still in business, according to Kutlick.
The shuttered chain stores “didn’t close because of the market. They closed throughout the country,” he says. “Those closings are no reflection on the local economy.”
Several construction projects are nearing completion, including the Raising Cane’s and CoreLife restaurants in Boardman. Firehouse Subs recently entered the market and FedEx Office moved into the same plaza as CoreLife, Kutlick says.
And, he reports, deals are near in Boardman on the former Golden Corral and space adjacent to the closed TGI Friday’s. Kutlick is also working on two tenants for the Friday’s space itself, he says.
Other new construction projects include one in front of Metroplex Self Storage in Liberty Township and at the site of the former Adamas Jewelry & Gift Store at Market Street and McClurg Road.
While there is “a lot of inventory” available for commercial tenants, industrial and warehouse space is more scarce, Kutlick says. “It’s just a matter of time before people start building new construction to satisfy the built-up need for industrial space and warehouse space,” he predicts.
Kutlick says he is actively marketing sites to out-of-market clients not just on the usual busy commercial corridors, but also on secondary and tertiary roads, where land prices are “extremely attractive.”
Land at the site of one new-build on Western Reserve Road was below $4 per square foot, where space on U.S. Route 224 can go for $23 per square foot.
Pending deals in North Lima, Lordstown and Brookfield will take more than 200,000 square feet of industrial space from the market, says Jim Grantz, a broker and associate with Edward J. Lewis Inc., Youngstown. “All of them should be done in the next 60 days,” he says.
Two of the companies are local firms that need more space because business is good, Grantz says.
The third company is new to the market and is adding a satellite base to be closer to one of its clients and reduce trucking costs.
Edward J. Lewis Inc. is preparing to complete a lease for 5,500 square feet of space at the new retail plaza of CTW Development in Canfield Township, where Do-Cut Sales & Service opened last month. Once the deal is completed, just 2,300 square feet of space will remain.
“We’ve always been an affordable market to do business in. We’ve also been viewed as a safe place for investment,” Grantz notes.
Still, leasing and repurposing big-box space remains a challenge.
“Redevelopment remains a strong priority,” says Joe Bell, director of corporate communications for The Cafaro Co., Niles. “There is plenty of brick and mortar out there for commercial purposes, but very often it may need reconfiguration or repurposing. The key to finding the right kind of renovation is seeing what the needs of the marketplace are.”
Cafaro recently redeveloped the space Toys R Us vacated last year at its Eastwood Mall complex, where Big Lots relocated from its former space in McKinley Center.
“Big Lots needed additional space and is getting it,” Bell says. In addition, TJ Maxx will move from its Great East Plaza space into the Howland Commons space being vacated by Grace Fellowship Church.
As far as the 119,900-square-foot space Sears vacated in the Eastwood Mall building, discussions have taken place with potential tenants and ideas exchanged. “It will probably take a couple of months before any kind of deal is reached to fill it again,” Bell says. “It’s more complicated.”
Bell adds he’s uncertain what might happen with the Dillard’s space attached to the Southern Park Mall in Boardman. “Right now, we’re very far from a determination of how we’re going to use that space,” he says.
Dillard’s announced the closure of the Southern Park store just days before the announcement that Cafaro purchased its building. Sears also closed its store at Southern Park.
“We are in active planning and negotiations for redevelopment alternatives, including new entertainment and dining options, as well as local, regional and national tenancy which provides differentiated goods and services,” says Lou Conforti, CEO of Washington Prime Group, the Columbus company that owns Southern Park.
“We are pursuing several interior and exterior updates including new lighting, updated entranceways, new community areas, increased curb appeal, new digital signage and more,” adds Kimberly Green, vice president of investor relations and corporate communications.
Several upgrades are being planned to coincide with the 50th anniversary of the mall in 2020.
Copyright 2020 The Business Journal, Youngstown, Ohio.