YOUNGSTOWN, Ohio – Local real estate professionals say the regional market remains active, though deals are taking longer to come together.
Don Thomas, managing partner of Platz Realty Group in Canfield, reports his office had “been on a tear for the last three years,” with significant activity in Mahoning, Trumbull and Columbiana counties. More recently, there has been a change in timing when it comes to finalizing transactions, and closings have moved back to what had been standard after a period during which they closed more quickly.
“Market timing has slowed down quite a bit,” he acknowledges. “We continue to be active. The deal flow, though, is taking longer to get done and stuff that was closing quickly is taking longer to do.”
Jim Grantz, broker associate with Edward J. Lewis Inc. in Youngstown, says, “it’s not a market that’s on fire” but it’s a stable market.
Many national businesses are closing, including a lot of the big box retailers, Alan Friedkin, associate broker with Burgan-Friedkin Commercial Group in Liberty Township, points out. The CVS pharmacy chain is trimming hundreds of stores and Wendy’s is shedding 5% to 6% of its restaurants. Grocery Outlet is closing its Austintown store and 35 other units.
“People are wanting to extend closings. They’re taking longer to process diligence. Banks are taking longer to process mortgages,” Grantz says. He could not say whether the market slowdown is because demand is tapering off or potential buyers are waiting out economic conditions.
Office/Retail
“We do have a lot of vacant office space – not just medical, but a lot in general,” Friedkin says. In some cases, medical practices are being purchased by hospitals and other health-care organizations in the area that then moved into space they own or other facilities.
The retail environment is “tough,” Friedkin remarks.
“A lot of the problem is that their sales are down,” he says. “People aren’t spending the money in those types of businesses.”
Platz’s Thomas says he sees “really good activity” in Sharon and Hermitage, Pa., and predicts the redevelopment of the former Shenango Valley Mall property in Hermitage as Hickory Fields will be significant for that area. Activity also has been good along the Pa. Route 51-Ohio Route 14 corridor for the past several years.
Friedkin reports interest from chains that are looking to enter the market, including coffee and sandwich chains. A couple chains are doing due diligence on properties on the Belmont Avenue corridor for projects that hopefully will finalize by the end of summer. The corridor is “filling up a bit more” because of Mercy Health’s investment in new behavioral health and rehabilitation hospitals in Liberty Township, he says.
“People are looking for apartment complexes or they’re looking for triple net leases at bargain prices,” Friedkin says.
Industrial Properties
“Flex space is one of those things that, at the lease and sales sides, we’re seeing the property sit longer than what they had been. It’s one of those areas where we’re paying attention to why they’re staying on the market longer than they have been, and I can’t give you a reason for that,” Thomas says.
Grantz says Edward J. Lewis Inc. is handling quite a few land deals, “which is encouraging because they will lead to new construction projects.”
The majority of the deals involve industrial properties, he continues. They are vacant parcels ranging from three to 26 acres, with structures of up to 200,000 square feet being constructed on them.
“For the users that I know of, their building needs are so unique that it makes more sense for them to build new than it does to try to find something to retrofit,” Grantz says.
Interest has been significant in a set of industrial-grade buildings in East Palestine that Platz is marketing on behalf of that village, Thomas says.
The buildings, which are located near the site of the February 2023 train derailment, have undergone environmental remediation. They have been deemed clean and can be repurposed for warehousing or manufacturing, he reports. Since their availability was posted online in early February, the buildings have been the subject of “a lot of inquiries” and many interested parties have toured them.
“Interestingly, we’ve got some people from Mahoning County that are looking at those properties to potentially relocate something from Mahoning County into Columbiana County,” Thomas says.
Rite Aid
Platz has sold several former Rite Aid buildings across the region, including one in Alliance, one in Columbiana and a couple in Trumbull County, Thomas reports. Another in Summit County likely will go under contract, he adds.
“They’re good buildings and they’re easily repurposed,” Thomas says. The Columbiana building is going to be converted from an open structure to a five-suite, multiuse plaza.
While attending an International Council of Shopping Centers convention, Grantz says he learned various national companies have developed plans to retrofit former Rite Aid stores to put them back into productive use. The properties are attractive to redevelop because of the geographic locations of the buildings.
The former Rite Aids can be attractive if buyers are willing to put money into redeveloping the properties and getting tenants into the space, Friedkin acknowledges. Some of the former pharmacies locally have been converted into senior service centers by Buckeye Pace, but several of the buildings remain on the market after their closings in 2024.
“We’ve been contacted by some of the owners to see if we could help them lease out, but it’s a little bit of a struggle,” Friedkin says.
Friedkin shares the example of a local Rite Aid acquired by a California-based owner about a decade ago who is unlikely to get the income from that property that the drug store’s occupancy provided. “The cap rate on the building is not going to be the same as when she bought it,” he adds.
He also has heard suggestions that dollar stores could occupy the spaces but those chains are being more selective about where they are locating and won’t pay the same kinds of rates that Rite Aid had paid.
Apartments
Friedkin reports buyers are looking for apartment complexes to purchase. The cost to purchase housing “is getting a little bit out of reach for a lot of people,” so there is strong demand in the market.
“People have to rent,” he says.
Platz’s Thomas also reports interest remains strong in apartment buildings. “We have a shortage in the region of multifamily housing and outside investors are looking at the market,” he says.
One of the issues is lack of inventory, he points out. A few years ago, potential buyers would have seen properties with 100 or more units available for purchase. Properties that are on the market now have far fewer units.
“There’s really nothing out there,” he says. “There’s some fourplexes and there’s some duplexes, but multifamily continues to be in demand and the region could use some help and some development in that space.”
Pictured at top: The former Rite Aid in Columbiana is being redeveloped into a five-suite, multiuse plaza, reflecting a broader trend of repurposing vacant retail buildings across the region.
