Commercial market flooded with vacant space

|tab|

Local real estate agents see a definite slowing in Springfield's commercial real estate market.|ret||ret||tab|

The boom years of the late 1990s and the early 2000s, combined with low interest rates, led many developers to add retail and office centers across Springfield. Now some of those properties are slow to fill.|ret||ret||tab|

Ken Schwab, a commercial real estate agent with Wilhoit Properties Inc., believes overdevelopment is one reason for the surplus.|ret||ret||tab|

"In past years, there was such a high demand, you could probably build anywhere in Springfield and there was reason to think the space would fill," Schwab said. |ret||ret||tab|

Today, however, with the economy sputtering, demand isn't what it used to be.|ret||ret||tab|

"A lot of space has been built in areas that didn't have as high a demand," Schwab said, citing Springfield's northeast side as one example.|ret||ret||tab|

Real estate agent Tom Rankin with Rankin Co. said an informal survey drawing on information he and other commercial real estate people share, shows the city has more than 400,000 square feet of empty retail and office space available in both categories, or more than 800,000 total.|ret||ret||tab|

Rankin emphasized that he considered the survey done in July only an informal sharing of information among those in the commercial real estate business, and couldn't say how great an increase it represented over normal levels.|ret||ret||tab|

"There has been a substantial amount of retail and office (space) built in the last several years, and the retail market is soft," Rankin said.|ret||ret||tab|

Schwab noted that Springfield had weathered the current recession well, but added that demand for retail space "is not as fever pitched a demand as it was."|ret||ret||tab|

Schwab said the surplus hasn't affected all areas of town equally, in addition to south Springfield "we've found northwest Springfield to be extremely high demand. I can't get enough shopping centers up there. If we had more space today, we'd be filling it up." |ret||ret||tab|

He also said that many retail stores with two locations frequently choose a southeast and a northwest location.|ret||ret||tab|

Rankin said south Springfield doesn't have much surplus, if any.|ret||ret||tab|

Rankin said new retail space tends tofollow the lead of residential developers into areas like Springfield's booming south side. "(Developers of commercial property) want to be where the rooftops are; where the residents are," Rankin said.|ret||ret||tab|

Chris Maples of Maples Properties LLC said, "I think the retail side is picking up a little compared to what it was." She also noted articles in recent real estate publications that indicate a slow, but steady, turnaround in the Midwest.|ret||ret||tab|

While most property owners continue to feel optimistic that they can get the $10-$15 per square foot most agents said is typical for Springfield, they may also find themselves forced to make some concessions to fill those empty buildings.|ret||ret||tab|

All three agents agreed that rental rates had not come down in general, but added that many more business owners come in armed with the knowledge that Springfield has a surplus and negotiate a slightly lower rate. |ret||ret||tab|

"I think it's definitely a buyer's market right now," Maples said.|ret||ret||tab|

Rankin said he didn't how long the slump might last, adding, "It kind of depends on how long people continue to build." |ret||ret||tab|

[[In-content Ad]]