Investors looking at the Springfield area’s commercial real estate market can find a movie theater, a mansion and a lot of square footage for sale.
In the third quarter, commercial real estate tracking agency Xceligent, reported 1.6 million feet of retail and office space available in Springfield, Republic, Rogersville, Strafford, Ozark and Nixa. Investors looking for area properties 10,000 square feet or larger will find several up for grabs.
Retail space Four significant properties equal nearly one fifth of the 931,000 square feet of available retail space in the six-city region reported by Xceligent.
On the market is the 27,350-square-foot Main Street Plaza in Nixa; the 65,700-square-foot Town Center Plaza in Republic; the 33,273-square-foot Aundria Plaza, 4301–4339 S. National Ave.; and the 28,771-square-foot Palace Theater, 2220 W. Chesterfield Blvd.
The third-quarter retail vacancy rate is 5.7 percent, according to the area report.
Though Wilhoit Properties Broker Ken Schwab said vacancy rates are higher than they have been in years’ past, property owners and potential buyers calculate for a certain level of vacancy, estimating vacancy rates below 7 percent would likely be considered healthy by most people in the industry.
Retail properties with 10,000 square feet or more tend to have multiple tenants, and are most likely to be purchased by an investor, noted Todd Chambers, owner/broker of Chambers Real Estate.
Buyers looking for investment space with the intent of occupying a good portion of it themselves will have to find the right property, Schwab said, noting tenant leases are often multiyear agreements that carry over to new owners.
“As potential owner-occupants, most tenants have leases already and you would need to make sure that wouldn’t interfere with the current leases,” he said.
Office space Area third-quarter office space vacancy rates are at 8.9 percent, according to Xceligent, which reported 690,388 square feet of office space available in the quarter. Some of that vacancy stems from long-term tenants moving into newly built, owner-occupied spaces. This summer, Jack Henry & Associates Inc. employees moved into 160,000 square feet across two buildings at 3725 E. Battlefield Road, vacating leased space its associates occupied at multiple sites in the city. Similarly, O’Reilly Automotive Inc. finished its 115,819-square-foot headquarters at 455 S. Patterson Ave. in April.
That doesn’t mean all the space once occupied by Jack Henry and O’Reilly are for sale, Schwab notes.
“Primrose Office Plaza, that’s not on the market for sale, and the landlord had 100 percent occupancy for years,” he said. “It may be more of a challenge, but there were 45,000 square feet vacant in June, and we’ve already signed leases for 15,000 square feet.”
Among the larger-scale office properties for sale are 10,606 square feet at 1546 E. Bradford Parkway; 12,453 square feet at 1835 Stewart Ave.; and 11,715 square feet at 1330 E. Cherry St. Given the current market, Mike Fusek, broker and managing director at Sperry Van Ness/Rankin Co. said larger office properties are ideal buys for an owner-occupant, because they allow tenants to pay for some of the building, and as the buyer’s need for space grows, they can grow into their own buildings.
Outside the box Then there’s the movie theater and the mansion.
The Palace Theater in Chesterfield Village and the 56,000-square-foot Mansion at Elfindale bed and breakfast and chapel on 13 acres at 1701 S. Fort Ave. are both listed at more than $3 million and are both single-tenant spaces. Cornerstone Church is the owner and occupant of Elfindale, while Palace-Springfield has a lease for the Palace Theater with owner Dearborn Development Inc. until November 2015.
“With a unique property, you have to take into consideration that the same guy who is interested in a strip mall is not going to be interested in your property,” said Rhett Smillie, broker at KW Commercial. “It’s going to be of use to fewer people, but for the people who are in the market for that kind of thing, it’s going to greatly appeal.”
Worth the return? The reasons for sale are as varied as the properties listed, brokers note.
“When you look at a retail or office product, these are held for investment purposes,” Schwab said. “Investors make decisions for a multitude of reasons, ‘Am I getting the return I wanted? Is this still what I want at this age?’ The same may be true in that piece of real estate.”
Outside forces can in some way drive a decision to sell, Schwab said, noting that current speculation is that federal long-term capital gains taxes may increase in 2011.
But Fusek sees few reasons for owners to sell now, noting prices are at a low.
“It’s only a good time if you need the money, if your needs change or you have a better opportunity,” he said.
“If you have a high quality building in a good location … quality holds its value in a down market.”[[In-content Ad]]
A relocation to Nixa from Republic and a rebranding occurred for Aspen Elevated Health; Kuick Noodles LLC opened; and Phelps County Bank launched a new southwest Springfield branch.
