Drug Treatment Centers Scout Valley for Sites

YOUNGSTOWN, Ohio – The campuses of former nursing homes in the Mahoning Valley, along with other properties, are drawing considerable interest from out-of-state substance abuse treatment centers.

Space for these centers is “a big issue right now,” confirms John Horvath, broker associate with Northwood Realty Service’s commercial division in Poland.

Horvath says the former Cedarcreek Health Care Center in Warren has received numerous inquiries from treatment providers. Also, a separate property that Northwood recently brokered on Colonial Drive in Liberty Township was shopped to treatment centers before a senior care provider bought it.

The Mahoning Valley – and the entire state – has been “hit hard” by the opioid addiction epidemic. Interest in properties to locate treatment centers here is widespread and is just one factor driving activity in the Valley’s commercial real estate market, Horvath says.

Treatment centers from New Hampshire, Arizona and Tennessee have all checked out Cedarcreek. “They’re coming from all over,” he adds.

Two agents with Platz Realty Group, Poland, Adam Divelbiss and Matthew Wilson, say they, too, are seeing the high level of interest that drug treatment centers are showing in this market.

“They’re anywhere and everywhere that will take them,” Wilson says. “We’re seeing the market react to the needs of the community.”

In recent months, Platz Realty Group helped Addiction Outreach Clinic relocate to McKay Court in Boardman. The sector is growing across the country, Divelbiss says.

“A lot of these companies are looking to move south into Salem and Columbiana,” he notes.

At the same time, as health care systems acquire physician practices and consolidate them into their own properties, “There isn’t a big demand for medical spaces now,” Horvath says.

In fact, there is “a glut of office space” with the opening of Mercy Health’s new Howland Medical Center on Niles-Cortland Road, reports Chuck Joseph, broker with Routh-Hurlbert Real Estate in Warren.

“If they’re here and they’re established and they’re going to Mercy Health, that doesn’t mean people are standing in line to fill those vacancies,” Joseph says. “They may have to be converted.”

The problem is that medical offices typically are outfitted differently than regular offices. The size of exam rooms is different, and such spaces include sinks, exam tables and specialized computer equipment.

Still, Platz’s Divelbiss reports he is seeing medical office space being converted to general offices.

In the retail and office sectors, Northwood’s Horvath reports “a lot of activity,” particularly along the U.S. Route 224 corridor from Canfield to Poland. The Niles-Howland area remains strong as well, he says.

As for newer areas, there is the Firestone Farms development in Columbiana. Another property is the former Arrowhead Lanes in Columbiana, being repurposed as a strip plaza.

“There’s enough space out there. It’s just a matter of getting the tenants to fill it,” Horvath remarks. “And you’re always going to see office space available, with tenants either downsizing or upsizing.”

Rates for Class A office space depend on the landlord and how quickly he wants to lease it, he explains. For example, Horvath recently completed a deal for Class A space for a financial institution for which it is paying $12 per square foot.

Rates are stable along the 224 corridor, in the range of $10 to $12 per square foot, he notes.

Finding a reuse for vacated retail space – particularly large ones such as the former Staples store in Boardman – often presents a challenge, one sometimes solved by subdividing space.

“For a landlord, it makes sense sometimes to have small spaces. But then again you’re going to need an anchor, a draw,” Horvath says. “With that in hand, you can develop the rest of it. There’s always going to be re-tenanting,retail properties in flux.”

One potential use for big-box space – converting it into offices – might not prove cost-effective, he says. Offices require carpeting and electrical outlets, and normally have lower ceilings than large retail spaces.

Kutlick Realty LLC, Boardman, has a letter of intent with a national retail chain for the space occupied by electronics and appliance retailer hhgregg in the township, reports broker/owner Bill Kutlick. He declines to name the chain.

Earlier this year, Kutlick brokered the deal for a new Panera Bread in Boardman and signed leases with Chipotle and Starbucks for space in front of the Walmart on Elm Road in Warren. He also signed a deal for a new Dunkin’ Donuts in the area.

Among the office properties Kutlick is handling is the Huntington Bank building in downtown Warren. “One thing unique about it is that it has surface parking,” which many downtown properties don’t, he says.

The building is “extremely well-maintained,” and the view of the Mahoning River from the upper level is “extremely nice,” he says.

In some cases, rates for downtown office space can be “considerably lower” than in areas such as Boardman, Canfield and Howland. “In other cases, believe it or not, you could rent space at the same price,” Kutlick says. Rates in the downtowns or the suburbs range between $5 and $12 per square foot, depending on the improvements needed.

Kutlick finds it hard to believe that retail space can be economically converted into office space. The first issue is dimensions, he says.

“Typically, retail space is very deep. It’s a box. It’s square,” he says. People like to see windows in offices, and with a floor of more than 10,000 square feet comes a lot of interior space without them. “The real issue is, is there a demand for that type of space?” he says. “Is it economically feasible?”

Another issue might be restrictions imposed by major tenants, who don’t want vehicles parked in the retail center’s parking spaces for eight hours or more at a time.

Retail is a problem all over the country. “They’ve got to start thinking of alternative uses,” says Scott Lewis, vice president of Edward J. Lewis Inc., Youngstown. In some cases, larger malls are catering to entertainment uses for vacant spaces, such as trampoline parks, laser tag centers and paintball yards, even churches.

Some retail strip centers are seeing vacancies filled by residential real estate, staffing and insurance offices. Such businesses “have no problem” with being in these strip centers, which offer conveniences for their customers and clients as well, he says.

Lewis reports an uptick in overall demand compared to last year. Moreover, people today are “doing just a little bit more than kicking the tires,” he says. “We are seeing some deals come to fruition.”

For the first time in his career, he says, he sees a shortage of industrial inventory, although demand for industrial space isn’t “heading in the direction of new construction,” he notes.

As for office space, the Route 224 corridor has “a lot of nice inventory available and coming online,” he says.

Downtowns in the Valley have space available for office users, and tenants can look at saving 20% to 40% over what they would pay along the suburban 224 corridor. “Downtown is a deal,” Lewis says, but tenants have to weigh that against their need for parking, and that comes with a cost.

“It’s no secret that Youngstown is doing really well. There’s a lot of energy, not just offices, but you’ve got the restaurants and the taverns and people doing the residential in order to be a lifestyle city,” he says. “Youngstown is really pushing hard to try to make all that happen.”

Although there is more activity downtown, office space rates remain flat, from $9 to $12 per square foot, depending on the size, brokers say.

In Warren, Routh-Hurlbert has had “a pretty good year from a commercial-industrial standpoint,” Joseph reports. His firm is working to find tenants for several industrial properties, including the former RG Steel building, a 56,000-square-foot structure.

Some of the properties the firm is marketing could close in the next month, he reports. And he is confident that the Lordstown Energy Center under development and land in the village will attract new business.

“We’re busy. We’re not getting signatures on the dotted line. But we’re busy making people aware,” Joseph says. “It’s the old adage of finding the right fit for the right customer. We’re out there trying to find them.”

Pictured: This vacant building at 4121 Tod Ave. NW, Warren, could become a treatment center.

Copyright 2022 The Business Journal, Youngstown, Ohio.