Past residential growth shapes commercial development

That’s because much of the commercial growth isn’t inside the city of Springfield; areas such as Nixa are expanding services to meet pent-up demand that comes with population growth.

“Nixa has been a really strong market,” said Ken Schwab, commercial Realtor with Wilhoit Properties Inc., pointing to a piece of ground at the northeast corner of Tracker Road and Main Street. “This past summer, sewer came to that parcel. There has been interest in that property, but without utilities, it is hard to develop. There is strong population in the subdivisions that lie to the east of this area.”

In some ways, Schwab’s property example defies traditional development patterns.

“In the past, (U.S. Highway) 160 has been the major draw for any development around Nixa,” Schwab said. “Interestingly, the traffic count at Tracker and Main has been around 20,000 cars a day.”

According to Barbara A. Beyer, CCIM, owner of Beyer Commercial Realtors, the commercial market in Republic also is gaining strength.

“Republic has enjoyed a good amount of retail growth,” Beyer said. “I believe part of that is draw from (surrounding communities). As their populations increase and look for the nearest large retail hub that satisfies most of their needs, Republic is benefiting.”

Beyer cites Republic’s economic development policies as contributing to the growth.

“I have been somewhat amazed at actual sold prices I am seeing in the $10.50- to $11-per-square-foot range,” Beyer said. “I’m amazed at seeing asking prices on retail land in the Republic area in the $13- to-$15-per-square-foot range.”

It all comes down to population, according to Schwab.

“What drives commercial activity is housing,” he said. “When population in one of these communities reaches a certain level, then retailers who aren’t in these communities start moving in.”

North Springfield, however, could be set for its own wave. Schwab points out the development of multifamily dwellings by the Coryell family as an early indicator.

Sam Coryell, a developer and owner of TLC Properties, is building 360 apartments at Coryell Courts on Kerr Street near Cracker Barrel on Springfield’s north side.

“We’ve felt like the demand is there,” Coryell said. “This time of year, it is hard to tell. I think the north side is ready to take off.”

Also on the north end, Coryell is putting in another 400 units at the 650-unit Orchard Park Apartments near Kearney Street and West Bypass as part of the Airport Plaza development.

As a rule of thumb, Coryell said doubling the number of units will provide a fair estimate of what the actual number of residents will be. Using that formula, those two projects stand to add nearly 2,000 residents to the north side of town.

Having a strong employer like T-Mobile nearby and more businesses coming in hasn’t hurt prospects either.

“Actually, T-Mobile had not committed when we bought the land out there,” Coryell said. “We really got lucky on that one.”

New residents will need to eat and shop, and as good corners become scarce, the cost of commercial rents and real estate will rise, Schwab and Beyer noted.

“I’m seeing more development of existing land with or without existing buildings,” Beyer said. “I’m even seeing land sold that has an existing building that doesn’t personify the highest and best use of that property, given the dollars per square foot that’s being asked. “

It all comes down to location.

“(We) are seeing people tear down buildings to get a good location,” Schwab said. “When Walgreens wanted to be in south Springfield on Republic Road at Fremont, they did a tear-down in order to get the corner they wanted. I think that’s pretty telling, that we think we’ve got all the ground in the world in southwest Missouri, but here are retailers being forced to tear down property to get to it.”

This activity usually leads to higher rents.

Bart Collins, commercial Realtor with Murney Associates, is seeing another trend. Already, there are sellers who want to turn over real estate under 1031 tax exchange laws in anticipation of a new federal administration, which might change the rules for such transactions.

Under a 1031 exchange, property sold is replaced with similar property. Tax on the profit from the sale of the original property is deferred until a future closing date.

“If you have a lot tied up in your property, you can perhaps avoid paying taxes on the sale indefinitely if you do the exchange now,” Collins said. “You can’t be sure you will have the chance to do that in the future.”