Articles
appearing in this section of our website are republished
from the bi-weekly print edition of MiBiz. Online
versions are updated by the end of Tuesday of the publishing
week. The commercial real estate section appears
in every other issue of MiBiz. If you are looking
for an article we published that is not
appearing
in this
edition,
please signup and login to
our free article archive service and keyword search articles
dating back to 2001. Free print subscriptions to
MiBiz are available to those who qualify.
In
this edition: Life in the slow lane
Life
in the slow lane
Monday,
December 24, 2007 - MiBiz
 
By Karen Gentry | MiBiz
kgentry@mibiz.com
Commercial
real estate is riding a slow train through West Michigan,
with 2008 shaping up to be similar
to the sluggish 2007, according to industry experts. Some
commercial
real estate action in 2007 reflected a changing economy
more focused on healthcare, services and retail. Leases
and sales
of medical buildings, including the first businesses in
a retail center in Metro Health Village, were announced.
Fresh
Market, a grocery chain new to the area, opened in the
Waterfall Shoppes in Grand Rapids. Numerous spaces were
sold for condo
projects, including the former Fox’s Jewelry building
on the Monroe Mall in downtown Grand Rapids. Two acres were
sold near the Lakes Mall in Muskegon and the Heritage Center
Foundation purchased the former Cereal City building in Battle
Creek with plans to convert to office space. Ashley
Capital purchased the former Steelcase building with multi-use
plans in the works. The news was
also dotted with announcements about new student housing,
lakeshore condo projects, and moves of corporate headquarters,
including Brann’s, to downtown Grand Rapids.
MiBiz spoke with Tom Postma, VP of sales for Grubb & Ellis
Focus Properties in Holland; Ellie Callander, president/owner
of Prudential CRES-Callander Commercial in Kalamazoo; Wisinski
Group Chairman and CEO Stan Wisinski; Grubb & Ellis Paramount
Commerce Research Analyst Gary Albrecht; and Battle Creek-based
Betz Properties owner Ted Betz about their impressions and
outlook for commercial real estate.
Grubb & Ellis Focus Properties was down 10 percent in
sales in 2007 and expects a similar result for 2008, according
to Postma.
There have been some positive signs for the local economy,
but it is still a tough go in 2008. A bright spot in
the Holland market is small industrial companies with
five
to 50 employees that are growing and seeking space
to expand.
“They’ve been conservative for a couple of years even
though business has been pretty good. I think it’s
finally to the point where they need to grow; they need to
have space. They’re looking for short or long-term
leases or purchase space,” Postma told MiBiz.
Postma said there’s limited industrial space in the
10,000 – 50,000-square-foot range, but plenty of choices
around 100,000 square feet or higher.
Callander said the last three to five years have
been the most difficult she’s seen. This year was a flat year,
and she anticipates staying flat in 2008.
“I
would have to say that office was hit the hardest,” Callander
told MiBiz. Office construction in the region has slowed
down and will help the absorption of the current inventory.
Prudential CRES-Callander Commercial is handling
the Arboretum project on a 180-acre site
owned by the Western
Michigan
University Foundation on Drake Road. The
first phase of the project includes a new middle
school for the
Kalamazoo Public
Schools followed by a second phase of retail
on 23 acres.
“We
have the property under contract with the developer.
We’re
hoping by next summer to see the beginnings of the project,” Callander
said.
Wisinski has an inkling the region has
bottomed out based on the amount of activity
and chatter
amongst
industry
professionals. He expects 2007 to be
similar to 2008 but foresees a strong
2009.
“By the middle of 2008, I see things progressively getting better,” Wisinski
told MiBiz.
Wisinski Group is the broker of record for the Catholic
Diocese of Grand Rapids for the Cathedral Square project
and is working
on the
Midtown
project in Grand
Rapids.
Institutions including churches and schools have been
and should continue to be a bright spot in the market,
Wisinski
said.
Office vacancies in the Grand Rapids market are decreasing,
according to Albrecht. Third quarter vacancy rates
in the suburban and
downtown markets
were 15.9
percent. Albrecht
said there has been an increased number of smaller deals
for a host
of business types.
“We’re not seeing a ton of 30,000-square-feet office leases,” Albrecht
said.
Many national retailers have written off Michigan,
according to Callander. “We’re
not looking at Michigan right now,” is a typical
response.
Betz said the commercial real estate market in
Battle Creek is very, very poor. With several
new buildings
including
car dealerships,
he does expect
a turnaround.
“I
think the cycle will turn around. There’s always been ups and downs in
the past,” Betz told MiBiz. Betz owns two office
buildings and rents out 20,000 square feet of space
near the I-94 business loop on Dykman Road and 28th
Street. The offices are currently more than 50 percent
vacant.
Back
to the top
|
