Market ripe for commercial retail development growth

Springfield developer Bill Jester, who owns four commercial shopping centers in the city worth a total of about $25 million, said developers must stay ahead of rising land and construction costs by building new projects even when their existing complexes remain partially vacant – a sort of “build it and they will come” philosophy.

“Preleasing is a difficult thing to do in this part of the country,” said Jester, noting construction can take five to eight months. “Until you have steel in the air, a lot of people aren’t sure it’s going to happen.”

Cheaper money is another factor.

Eric Piel, president of First National Bank of Springfield, said interest on construction loans through his bank range from 6.5 percent to 7.5 percent.

“Short-term rates have trended up, but historically, rates are still low,” Piel said. “The time is still good for commercial construction.”

Jester is adding to his arsenal with the $4 million, 28,000-square-foot Quail Creek Shopping Center on West Republic Road, although his French Quarter Plaza in the 1600 block of East Republic Road, and Town & Country Shopping Center and Super Center Plaza, both on North Kansas Expressway, aren’t full. Financing for Quail Creek was provided by Metropolitan Bank.

French Quarter, 39,000 square feet and anchored by Touch restaurant, stands at 70 percent occupancy and Super Center Plaza is half full.

The established Town & Country is 97 percent full, excluding the space that formerly housed the Town & Country 6 movie theater and North Point Church. That is being renovated for internal mall space.

Quail Creek should be finished around Nov. 1 with 14 units. An unidentified sports bar and grill franchise will be its centerpiece and is its lone occupant so far.

Bill Beall, who is the broker for the three-year-old Kansas Station on the southwest corner of Kansas Expressway and Battlefield, said vacancies at his 50,000-square-foot center worried him initially. But Kansas Station is now 80 percent full. Beall said Kansas Station was hurt when its opening coincided with the closing of the nearby Smitty’s Supermarket.

Kansas Station’s prospects are looking up now.

“Property is starting to pick up, and we feel very positive,” Beall said.

Jester said even if it takes two to three years to reach tenant capacity at new strip centers, it makes sense for financially stable developers to keep building.

“You have to have staying power,” Jester said. “You have to have the capability to support the building until you have the right tenant.”

Jeff and Andrea Anderson were the right tenants for Super Center Plaza. The husband-and-wife team opened Lemstone Christian Book Store on July 18 in a 2,500-square-foot unit.

Jeff Anderson said Super Center Plaza met their needs to house their first business, both in location and with rent that is “very competitive with most of the strip centers around.”

The pair waited two years for the plaza’s completion.

“With Wal-Mart (being adjacent to the Super Center Plaza), and people seeing us from the parking lot,” he said, “the exposure’s been very good.”

Location is why Jester chooses all of his projects.

“Typically, what I do is look for underserved areas of the city,” Jester said. “First, you have residential growth. Then, your commercial growth follows.”