Retail leasing market remains steady, brokers say

The state of the retail leasing market is in the eye of the beholder.

"Northwest Springfield is the hottest area to the north; all areas in south Springfield are still considered hot. It's a very vibrant market," said Ken Schwab, agent with Wilhoit Properties.

Todd Chambers, owner/ broker, Chambers Real Estate Services LLC, said: "It's still good. Right now tenants have a lot of options because of the new construction around town in the last several years. Tenants have the option of leasing space in new buildings and paying upper-tier rental rates or, because so much new space has been built and opened up spaces in older properties, they can opt for an older, good location and pay less in rent. It's a tenant's market right now."

On the other hand, DuWayne Eoff of Eoff & Associates, said of the market: "It's been fairly soft. There's not a lot of activity in the last year. But it seems to be steady. Real estate remains strong mostly because it's a good investment. It's the safest investment right now; investors are looking hard for real estate and they want to own real estate that has good people renting it."

In the market

Eoff said those companies that lease are opting to keep their money liquid to use to run the business. They don't want to "tie up a lot of cash in real estate" and they "don't want to worry about maintenance," Eoff said.

The types of tenants leasing retail space are varied. Schwab has placed a mixture of national companies and local companies.

Schwab said Battlefield Towers, the shopping center at Lone Pine and Battlefield, has a mixture of national tenants like Fuddruckers, AT&T and Edward Jones Investments among local types of tenants.

Battlefield Towers, with 21,000 square feet is 90 percent occupied, Schwab said. Schwab has had several new tenants, such as H&R Block and International House of Pancakes, lease space at The Town and Country shopping center on north Kansas Expressway in the past few months.

In Schwab's experience, lease prices range from $14 up to $23 per square foot.

"There are retailers wanting to pay for prime spots in shopping centers. People are paying what are probably the highest numbers that I've seen in the market for a while," Schwab said.

Chambers said older properties may cost between $7 and $9 per square foot, with new properties at about $13, plus the tenant's share of building insurance, real estate taxes and common area maintenance.

Eoff said prices seem to be raising for new properties, but tenants are generally renewing leases at their existing price.

Eoff is leasing the National Avenue Office Park, a 60,000-square-foot building located at 1911 S. National. About 22,000 square feet of office space is still available there. Occupation began this summer and tenants include architects and physicians, Eoff said.

Other properties Eoff handles are Aundria Plaza and Savanna Square. Aundria Plaza, with 35,000 square feet, is about 83 percent full and began leasing in September 2001. Savanna Square, with 54,000 square feet, is 99 percent leased.

New construction

Kansas Plaza, at Kansas Expressway and Republic Road, is a new development still in the planning stage, Schwab said. He expects construction to begin in early 2003 and it will contain a combination of office space and retail space.

"The 17,000-square-foot Kansas Plaza is a testament that developers are willing to put more product on the ground because they see an interest on the part of retailers," Schwab said.

"Low interest rates are an enhancement for most developers and make developing property more attractive. All it boils down to is nobody wants to build a building unless they think a tenant wants to rent it," Schwab said.