Commercial agents shop hottest properties as vacancies shrink
With commercial vacancies in the Springfield area falling in the office, retail and industrial sectors during the first quarter, buyers might be tightening their focus to the “most eligible” properties on the market. Springfield Business Journal takes a look at the local real estate scene.
According to local agents and brokers, some of the notable area commercial properties currently listed for sale or lease in retail sector include: Ryan’s restaurant, 2501 S. Campbell Ave.; Kansas Plaza Center, 4113 and 4127 S. Kansas Expressway; and available this summer, a new HCW Development Co. LLC retail center including Pie Five Pizza Co., 1008 E. Battlefield Road.
Eligible office spaces include: the North Point Church facility, 2951 E. Sunshine St.; the former Mercy fitness center location at 202 E. Walnut Lawn; and the former Metropolitan National Bank operations center at 3340 E. Cherry St.
In the industrial sector, a few of the notable properties listed for sale or lease include: the Watts Radiant facility, 4500 E. Progress Place, available Oct. 1; the SRC Electrical building at 2720 N. Commerce Dr.; and the Packer office and warehouse facility, 1725 N. Packer Road.
According to commercial property tracker Xceligent Inc., local retail vacancies dipped slightly to 5 percent from 5.2 percent; the office vacancy rate fell to 7.5 percent from 8.7 percent; and industrial vacancies decreased to 4.1 percent from 5.5 percent a year earlier.
Kraft Heinz Co. (Nasdaq: KHC) enacted the biggest move in the quarter, according to the Xceligent’s latest Market Trends Report, filling a 125,000-square-foot vacancy in mid-March left by Cargill Inc. at Springfield Underground.
Kirk Heyle, owner of Heyle Realtors & Consulting Services LLC and a 40-year industry veteran, said several factors can make a vacant property a hot commodity.
“The most interesting ones are the ones that have never been on the market before,” he said, pointing to an L-shaped property he has under contract with an undisclosed St. Louis developer at 2300 N. Glenstone Ave., just in front of the closing Kearney Street Kmart store. “It’s owned by the state. They are retaining some right-of-way there, but they’re selling 2.1 acres.”
Other factors include high traffic counts, easy access to highways, the quality and age of the building, room for expansion, nearby properties and, if it’s for sale, whether long-term tenants are in place.
Curtis Jared, CEO of commercial property management firm Jared Enterprises Inc., said the hot zones for commercial property in Springfield are fairly well defined.
On the retail side, the South Glenstone corridor around Battlefield Mall and south to James River Freeway is the highest in demand.
Jared is planning multimillion-dollar renovations to the Brentwood Center, and he said Brad Thessing’s Glenstone Marketplace, where high-end grocery store The Fresh Market will anchor, should be among the most-eligible properties. Other hot spots include East Sunshine Street and east of National Avenue on Battlefield Road, as well as Kearney and Glenstone and Kansas Expressway north of Kearney.
When it comes to office space, east Bradford Parkway, East Battlefield at Ingram Mill Road and downtown around Hammons Tower also represent zones in high demand. In the industrial sector, the Partnership Industrial Center near U.S. Highway 65 and Kearney Street and PIC West near the airport are the first choice for many would-be tenants and buyers, he said.
Jared, in contrast with professional peers, balked at the notion the Ryan’s property would be in high demand.
“What’s going to happen is that’s going to be a revolving door just like across from Battlefield Plaza where there was that Asian buffet. There’s probably been a half-dozen restaurants in it the past five or six years,” he said of the 300 E. Battlefield Road property, adding the former North Point Church on East Sunshine is better suited for retail.
Anita Zimmerman of Wilhoit Properties Inc. said the Galleria Shopping Center has three vacancies just south of the Battlefield Mall and represents a most-eligible retail space for Wilhoit.
The Baron’s Cardiology building at 1242 E. Independence St. and an Ozark office building at 850 N. 25th St. also are notable listings, she said.
Todd Chambers of Chambers Real Estate Services LLC said the newly renovated office property at 1500 E. Sunshine St., the former Barker-Phillips-Jackson Inc. insurance building, has been in demand for his company. Leases are signed for three out of seven bays with tenants he declined to name: an Asian restaurant, a spa/salon and a doughnut shop.
A promising spot the real estate agents pointed to is West Sunshine Street, near the $78 million mixed-use Springfield Plaza development. Last year, home-improvement retailer Menard Inc. bought 40 acres down the street at 3705 W. Sunshine St. Now, North Carolina-based developers Collett is promoting plans on its website for a 200,000-square-foot shopping center at the southeast corner of Sunshine Street and West Bypass.
Jared said the Collett plans could pose a threat to the future of the Springfield Plaza project, if Collett has more retailers lined up east of West Bypass. He doubts the area could sustain two large retail centers.
“That could kill Tom Rankin’s deal,” he said of the Springfield Plaza project led by commercial brokers Rankin and Jeff Childs. “That’s a developer’s worst nightmare.”
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