Commercial development comes full circle

A Certified Commercial Investment Member and member of the Society of Industrial and Office Realtors, Murray, as vice president of R.B. Murray Co. has been involved in commercial real estate since 1974.

And in that time, he’s seen it all.

Where we’ve been

The early 1980s were typified by high inflation and high interest rates that prevented a lot of commercial development from happening, Murray said.

Then, in the mid-1980s, when the federal tax laws began to change significantly, “the town really started to go,” he added.

“We had interest rates running 14, 15 percent and higher, and no one could afford to borrow the money. (Former President Ronald Reagan) sponsored legislation to get depreciable lives down to as low as 15 years on commercial buildings. By doing so, you created some capitalists with incentive to invest again.”

Commercial development is cyclical, but unlike major markets, Springfield’s cyclical overbuilding has always been mild.

That insulated Springfield against the woes that cities such as Dallas suffered with the savings and loan failures of the late 1980s and the subsequent seizure of properties by the Resolution Trust Corp., Murray said.

Evolution

Springfield development is evolving. Having moved outward from the core for many years, it is now returning to the center.

The pattern goes like this: Housing moves out to the countryside, then commercial development follows until the infrastructure becomes too difficult to support and commute distances become more difficult, Murray said.

Then “you find a little bit more pressure coming back toward existing sites in the core of the city, which is evidenced by the resurgence of downtown,” he said. “All that is kind of an evolution, and it’s driven predominantly by economics.”

The old school of planning said “you have to have housing here, you have to have industrial here, and you have to have retail here,” Murray said. That has to change “if we have any common sense at all about consumption of energy and how far we commute.”

Mixed use is the wave of the future, providing places to live, work and play in close proximity to each other, making the most of infrastructure and investment.

Retail

Center city was the retail center until about 1970, when Battlefield Mall was built, Murray said.

“At that point in time moms were still at home and shopping patterns were different,” he said. “And of course regional malls exploded all over the country.”

But as more women entered the work force, convenience gained importance.

“So retailing shifted … to more convenience type shopping, such as Battlefield Market Place,” Murray said.

The Battlefield Mall’s recent lifestyle development – Jos. A. Bank, Coldwater Creek and Chico’s – is likewise a reaction to the convenience-shopping trend.

“People want to be able to go in, shop, get in their car and leave,” Murray said.

Office

In the past, commerce was located in the central business district in institutional-style office space, but as the city grew, so did demand for suburban-style offices.

One example is Woodhurst Office Park, developed by R.B. Murray in 1983.

“That was in response to people who wanted to own their own buildings and build equities in addition to having parking at the door – the convenience aspect again,” Murray said.

However, Murray also thinks it’s likely that in the next two to five years developers will go back to the more institutional-style buildings, housing more corporate tenants, like the Chase call center.

“You will see some of that type of growth happen again as the town matures and its got the population, the educated work force to operate those kinds of businesses,” he said.

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