South side turnover time drives commercial sales

by Pat Nolan

SBJ Contributing Writer

There are benefits to commercial real estate that Joe Costello, of the Joe Costello Company, prefers to the restaurant business.

"When I got married, I decided to get out of the restaurant business because of the long hours," he said. "In the commercial business, you don't usually work weekends."

Costello formerly operated Village Inn restaurant (not part of the national chain) in Ava from 1976 to 1981. Weary of the demands of the food service industry, Costello entered real estate in 1982.

Real estate was not exactly new territory, though. Costello's father dabbled in the field, and an uncle in California is in the business. Costello himself is licensed in California as well as in Missouri.

The commercial outlook in Springfield looks good right now, he said. There is good growth, office-warehouse buildings are in low supply and the city's growth environment leads Costello to predict strong prospects for the next 10 years.

"You have more and more people as the community grows, and the same amount of land," he said. "Just because of that, the price goes up."

Commercial real estate is about finding the growth path and stepping into its way, he said. Costello said the restaurant-business emphasis on "location, location, location" applies to every type of business in a city the size of Springfield.

Because of the plethora of broadcast media in Springfield, he said, "a company is much better off picking a good location than trying to broadcast to everybody."

The recent resurgence of interest in the north side over the past couple of years doesn't affect the commercial numbers much, Costello said. South side properties continue to circulate the most dollars and draw the most interest.

"The north side is better for restaurants," Costello said. "There is less competition and more people."

In terms of sales, "Businesses on the north side don't turn over as much as businesses on the south side. If you have property on the south side that turns over every four or five years and a property on the north side that turns over every 20 or 30 years, and the property on the north side sells for half as much as the property on the south side, would you rather sell something for half the price, half as often?"

Costello added that he likes the improvements made on the north side in recent years. "I see the north side continuing to get better," he said. But long term, "to say that it's ever going to be a path of growth? I don't know."

The downtown area is a growth area, Costello said. Not the major path of growth, but a path. The most recent property Costello closed on was downtown the Sterling Hotel on Park Central East.

Architect Allen Casey and wife Mary Lou are "going to do a wonderful job down there," he said. "It's something that a lot of people don't understand. Somebody like Allen is risking his whole life's savings to try to make the community a better place."

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