(As seen on WZZM TV 13) Area realtors are looking at the closure of the Woodland Mall Sears as an opportunity for the region.
The thought led the 2016 Market Review by the Commercial Alliance of Realtors, which noted the closing of the one-time retail giant as a blip on the region’s retail market. According to CAR, retail transactions increased 14.4 percent in 2016.
“We will see a lot of activity from national realtors vying for the new space,” NAI Wisinski of West Michigan broker Rod Alderink said regarding the Sears space. “After many years of speculation, we can finally move toward additional available space in a highly desirable area.”
The Sears vacancy will open up more than 313,000 square feet at one of the region’s largest malls, and stores eager to expand their West Michigan presence can help fill the space in a market low on retail inventory, Ben Muller Realty broker Victoria Mitchell said.
Multiple realtors agreed with Mitchell and said local and regional companies are shifting their focus to neighborhoods rather than the major shopping corridors to find the space.
Brick and mortar retail stores are alive and well in West Michigan, the CAR report cited, especially with the Tanger Outlet and demalling of space at Holland’s West Shore Mall and Breton Village Mall, Colliers West Michigan Senior Vice President Mike Murray said.
“We are going to continue to see the trend of developers modernizing tired projects to bring them up to today’s retail standards, as retail evolves to meet the needs of its consumers,” Murray said.
Along with retail, hotel activity also trended upward in 2016. DAR Development Vice President Dave Denton mentioned two hotels in Gaines Township near the Switch data center, as well as a new project near Fifth Third Ballpark.
Similarly, office space transactions were up 7 percent in 2016 with 1.5 million square feet of office space leased or sold in 2016. That includes the 25 Ottawa and 99 Monroe sales and the opening of Arena Place.
Colliers Senior Vice President Tom DeBoer said parking continues to be a hurdle for businesses desiring to locate downtown, but it could change.
“However, new developers are including a parking component to aid in the relief,” DeBoer said.
Suburban office space is thriving, according to NAI Wisinski broker Jason Makowski, who also said medical office space for independent doctor groups is in demand.
The CAR report also suggests office space inventory is low and new construction could help, but new construction costs are driving new leases rates up beyond $24 per square foot, well beyond the current averages of $18-$25 for downtown and $12-$20 for suburban space.
Switch also was mentioned a second time in the CAR report, indicating along with hotel development, the data center could attract satellite offices to West Michigan for its more than 1,000 clients from across the globe.
On the industrial side, CAR noted an increase in sales of more than $140 million and 5 million square feet of space, a sales volume increase of 14.4 percent from 2015. Transactions, however, remained relatively stable.
“Average prices per deal and property values are rising,” Colliers Vice President John Kuiper said.
Inventory rates in industrial areas are at or near historic lows, according to CAR members, and lease rates also are rising. Many of the industrial transactions are occurring before they hit the market, NAI Wisinski broker Stu Kingma said.
“Brokers are finding the need to be creative, seeking out potential ‘for sale’ properties,” Kingma said.
With so much strong activity, CAR’s report noted many tenants are confident in the future economic outlook and are executing longer-term leases, with fewer landlords looking at improvements.