Plazas in the Valley Are Repurposed to Fill Vacancies
YOUNGSTOWN, Ohio – The “store closing” banner – such as the one strung across the entrance of Bed Bath & Beyond on U.S. Route 224 in Boardman – is a familiar sight at retail plazas here and nationwide.
One door east of the Boardman Bed Bath & Beyond is a vacancy created by Pier 1, which ceased retail operations three years ago.
Retail plazas are plagued with vacancies created by closings of retail chains along with local operators, as well as longtime tenants that are either relocating or shuttering.
In some instances, according to local real estate professionals, finding new tenants isn’t a great challenge – as least no more than normal. In others, particularly involving larger spaces, rethinking – and reconfiguring – the space is required.
“Everything that we work on around here is pretty full,” says Jim Grantz, broker associate with Edward J. Lewis Inc., Youngstown.
Vince Hillard, a real estate agent with Berkshire Hathaway HomeServices in Ohio and Pennsylvania, says most of the big box spaces he sees in the Hermitage, Pa., area – with the exception of Shenango Valley Mall – are occupied. Many of the smaller ones were filled as gambling establishments moved to Pennsylvania from Ohio over the past 18 months because of a change in state law. Vape shops have filled other spaces.
The Ohio area that Hillard covers will have more of a big-box problem because most of the region’s larger retailers are located there.
“[With Amazon,] it’s just tougher for big box stores to make it. You rarely find a decent-sized store that actually sells products,” he says.
“Most of the spaces are filled by service-oriented businesses or restaurants.”
While filling vacancies in plazas in recent years, Hillard says he “didn’t get a single phone call from a person that sells products.”
Another change in retail that Hillard – who co-owns Leana’s Books & More in Hermitage, Grove City and Austintown – has observed is the shift in shopping patterns. People don’t shop as late as they used to, so the stores close at 7 p.m.
“I’m losing two hours of sales compared to what I used to have,” he says.
Owners of commercial plazas “are going to have to adjust, be creative thinkers and invest more dollars into their properties to make them more attractive for other businesses to come in and lease office space,” says Lisa Resnick, owner of Dandelion Properties in Canfield.
“There’s lots of different creative ideas,” she says. “You have food halls, libraries. There’s lots of different things that they can do – make it a little interior space for people to come in from the exterior and have little shops on either side.”
The Mahoning Valley has a wealth of retail spaces, from plazas and malls to stand-alone units, says Don Thomas, owner/partner of Platz Realty Group in Canfield.
To accommodate the way retail operated 25 or more years ago, older plazas had a storefront with a “bunch of storage in the back,” he says.
Improvements in logistics and the supply chain subsequently eliminated the need for so much storage space, according to Thomas.
Because of the trend, retail tenants such as Hobby Lobby and Joann Fabrics have relocated in recent years to spaces that are about 50% smaller. Some retailers such as furniture stores still need the larger spaces. But in many cases, Thomas says he recommends “repurposing” properties to use the space previously used for warehousing and storage for other uses such as a second storefront.
Dan DeSalvo, leasing agent for Cosmopolitan Realty in Mineral Ridge, handles Austintown Plaza in Austintown.
The owner of the plaza has been selling off portions of the property in recent years, he says, including the building occupied by JCPenney, which announced it would close its store there later this year. Also sold were two smaller sections that front on Mahoning Avenue.
Older properties such as the Austintown plaza, which was built in 1959, “really need a whole new redevelopment,” DeSalvo says.
One of the best recent examples of an update locally is Tiffany Square, at the South Avenue-U.S. 224 intersection, because the location was right and the buildings were well done, Thomas says.
“You couldn’t build them for what you can remodel them for,” he says.
Changes in how consumers spend their money will “continue to create a little turbulence for the big box retailers,” says Grantz. But the Lewis agency isn’t seeing anything different happening with specialty retail centers he handles. With properties in northeastern Ohio and western Pennsylvania, he is able to “cookie cutter” tenants in the different markets.
“The vacancy rates have remained pretty stable,” Grantz says. “We had a little turbulence during the COVID era, but who didn’t? That’s all calmed down now.”
The main difference Grantz has seen in the commercial market is higher rental rates, “which is great for landlords,” he says.
Grantz says he recently finished a lease in Akron for an 1,800-square-foot space that when built in the 1990s got $8 per square foot and before the pandemic was getting $12 per square foot. The new tenant signed a lease for $16 per square foot.
Recent leases also have included inflation clauses providing for automatic annual increases in base rent.
“Under inflation, everybody’s raising their prices,” he says. “The tenants are experiencing it in every other facet of their business. So it’s not a surprise to them.”
The most recent opening at Austintown Plaza is in a space created by the departure of the Goodwill store. The 12,000-square-foot space is now being looked at, according to DeSalvo.
“Location dictates,” he says.
Another property DeSalvo handles is Gentry Center, a plaza at the intersection of state Route 46 and U.S. Route 422 in Niles.
“That particular center is doing well,” he says, “and there’s good activities on it,” which he attributes to its exposure at the heavily traveled intersection and competitive pricing. Tenants of the strip plaza include a mix of food services such as Little Caesars and Wingstop, and Nothing Bundt Cakes is going to be opening there shortly, DeSalvo says.
Platz Realty Group is repurposing Boardman Center Plaza, which changed hands in April. Sited on the southwest corner of Market Street and U.S. Route 224, across from Southern Park Mall, the location is “probably one of the best” in Boardman if not all of Mahoning County in terms of traffic flow, Thomas says.
His company is taking the space formerly occupied by Joann Fabrics in that plaza and breaking it into five 3,000-square-foot spaces at the front with storage in the back, as well as updating the plaza’s look. Work on the property probably will begin in the next two months, he says.
Other opportunities involve opening the space at the rear of properties formerly used for storage to other uses, Thomas says.
That reinvention is designed to make the space more desirable for smaller tenants, whether they are restaurants or businesses that sell products.
Platz also is handing the Bed Bath & Beyond and Pier 1 spaces. The Bed Bath & Beyond space already is being eyed by a potential national tenant, according to Thomas.
“Pier 1 is a little bit smaller. Just because of its location, we don’t think that that landlord is going to have to do anything other than paint and move along,” Thomas says. “The footprint probably doesn’t change.”
Re-tenanting efforts at Austintown Plaza have focused on mixed-use applications including retail and services, both private and public providers.
Some soft goods retailers that have stores in Boardman and Niles are looking at the plaza but not aggressively, DeSalvo says.
Austintown is the weakest of the three main retail markets for soft goods in the Mahoning Valley, he says.
“We look at stability and destination-oriented stuff,” he says. Because of the need for clean warehousing space, that is an option for second-generation space.
“There’s just a lot of factors. It depends on where your property is located,” he says. Every location is different, which dictates a different approach for how they are addressed.
“In the case of all that stuff we just talked about, they’re all good products,” Thomas says. “They’re all good buildings and good locations. You just have to evolve with the times.”
Pictured at top: Spaces at 550 Boardman-Poland Road by soon-to-close Bed Bath & Beyond and the former Pier 1 Imports are on the market.
Copyright 2023 The Business Journal, Youngstown, Ohio.