Commercial real estate scene even brighter

Owners and brokers of local commercial real estate companies believe the outlook for Springfield, in terms of the economy and land still available, looks excellent.

"We have a good, strong local economy," said Mike Mellinger, owner of Mellinger Commercial, 2408 E. Madrid. "We have a strong work force. There's been a lot of development and growth, which has kept the economy rolling as well."

Gregg Stancer, a broker for CJR Commercial Group, agrees that the economy has had a positive effect on commercial real estate in the Springfield market. CJR Commercial Group is located at 3524 S. Culpepper Circle, Ste. B.

"I think the fact that the economy is doing so well is predominantly due to the fact that we're experiencing unprecedented residential growth, which is driving the need for more commercial growth," Stancer said.

"Families need commercial services at places like Braum's, Home Depot and Staples. There are new national and regional companies moving here because so many people are moving here. The more people that move here, the more commercial land will need to be developed. Having a number of colleges here in Springfield is also good for the economy. The students provide a built-in factor because once they move here to attend college, they get a job and stay here," he added.

Both Mellinger and Stancer say that the lowering of interest rates has had a measurable effect on the commercial real estate market.

"Any time you lower the rates it makes developing the real estate more palatable," Mellinger said. "It has spurred on development. Lowering the rates allows a landlord to make a more aggressive rent."

Stancer said the lowering of the interest rate has had its most significant impact on the investment property sector.

"Investors are able to borrow money at a lower cost than they've been able to in years," he said. "We're seeing some of the lowest return in the stock market we've seen in years. So it makes sense to invest in real estate as opposed to the stock market."

Mellinger said the commercial real estate business is fairly competitive in Springfield.

"There are a lot of strong brokers," he said. "They're all searching for the same buyers and sellers. This will increase as the economy tightens and things slow down."

Stancer said that while it's not competitive between brokers, everyone is struggling to keep enough inventory on the shelf.

"There's so much business right now that we're all extremely busy," he said. "Springfield is an extremely desirable place to live in. There's a great quality of life here and the cost of living and the price of land are still comparatively low compared to other parts of the country. Springfield isn't our little secret anymore. People are finding out that it's a great place to live."

Mellinger and Stancer have opposing views on whether the economy has an effect on the tightening of underwriting of commercial loans.

"The area of underwriting is tightening because as the economy tightens, so does everything else," Mellinger said.

But Stancer said that the amount of underwriting he does hasn't changed because interest rates are at the most desirable place they've been in years.

"There's more competition among banks than at any time since I've been in this business, which is over 15 years," he said.

Stancer's most active properties are in retail. "The northwest and south sides of Springfield are very active, as well as Nixa," he said. "The hottest corridor is CC and Highway 65 because of the hundreds of homes being built there. The homes are driving the need for commercial services. People have to have a place to go for their consumable goods."

Retail space is also a hot commodity for Mellinger.

"We get most of our calls about retail strip centers," he said. "As the interest rate changes, people are not leasing these centers but buying them outright."

Chris Maples is the owner of Maples Properties, located at 3046 S. Delaware, Ste. J. She said she sells and leases more office space than retail.

"It's been that way for about six months," she said. "The market had been soft, but it's gotten better."

Maples has properties in Springfield and Branson.

Local commercial Realtors and brokers say smart development is taking place in Springfield, and it's having an ef-fect on the marketability of the properties in-volved.

"People prefer to have the local barber and grocer in their neighborhood," Stancer said. "But you can only have these businesses where there's proper zoning. People don't mind driving a distance to run their errands if it means keeping the noise and trash as far away from their own neighborhood as possible."

Mellinger said smart development pretty much guides itself.

"Springfield has been fairly smart in its development," he said. "Sometimes you can't steer where development will go. There are a lot of things that come into play in where it will go. This includes where the homes are being built, where the schools are and where the infrastructure (streets, roads and water) will be."

Mellinger said there are limitations on virgin land that can be built on.

"Having an unlimited amount of land on which to build will not go on forever," he said. "We have a high quality of life in Springfield. It's a place where people want to be. The more people that move here, the more the land will have to be developed. But as the city has grown, the more people are redeveloping. They're taking something that had been less desirable, like the downtown area. There's a natural desire to come back to the center of the city. People are taking a vacant building and turning it into retail stores on one level and a loft apartment upstairs. Development makes the most sense when it's where the end user wants to be. You don't always have to develop on virgin land."

Maples said the amount of unused land on which to build looks unlimited at this point.

"We're growing into Nixa and Ozark as well as the north and west parts of Springfield," she said. "This growth will be able to continue for a long time, long after we're gone."