The cost of land along the area's busiest retail corridors has been rapidly increasing, but local commercial real-estate agents say it probably will never equal the prices commanded on the streets around Westfield Shoppingtown Franklin Park, the metro area's hottest shopping vicinity.
That's because the area's largest and busiest mall boosts the value of nearby commercial property, which can feed off the shoppers lured there, experts said.
“As a retailer, you want to be there because there's millions of square footage of retail already there,” said Don Weiher, a principal with Michael Realty Co. in Toledo. “But there aren't any sites left, so you have to create them.”
Mark Rasmus, president of Tomahawk Development in Maumee and the local franchiser for Panera Bread, said his group spent $925,000 three years ago for an office building and land underneath - less than an acre - because of its location on Talmadge Road, near Sylvania Avenue, next to the Franklin Park mall.
That price translates to more than $1 million an acre, he said, compared with $450,000 to $500,000 an acre for properties along other busy shopping corridors.
“Franklin Park is a unique animal,” he said. “It's tough to think Franklin Park values will ever be challenged in this city.”
Dave Long, a retail specialist for CB Richard Ellis, Reichle Klein in Springfield Township, said, “From a retailer's perspective, if you're in the middle of the most active area, your sales will translate into higher dollar amounts, just by being located there.”
Because so few spots are available near the mall, retailers often buy buildings for high prices with the intention of demolishing them and building anew. The Red Robin restaurant on Monroe Street, for example, was built after its owners spent $1.4 million for the former Damon's Restaurant and tore it down, said Mr. Weiher.
The former headquarters of Finkbeiner Pettis Strout Inc. on Talmadge across from the mall has been on the market for more than a year for $2 million, but Mr. Weiher said that because of its location, he doesn't expect the asking price to drop.
Four other corridors in metro Toledo, however, have had dramatic jumps in land values.
They are Airport Highway, especially from Holloway Road east to the expressway; Central Avenue, especially from east of King Road to the expressway; Dussel Drive in Arrowhead Park in Maumee; and U.S. 20 near Thompson Road, an area that straddles Perrysburg Township and Rossford.
The last is a prime example of what happens to prices when retailers cluster. The first retailers there purchased land in chunks of at least 20 acres for $40,000 an acre or less, Mr. Long said. After various improvements and a growing number of stores in the area, Meijer paid four times that amount for a large tract, he said. Nearby locations for McDonald's, the International House of Pancakes, and Fifth Third Bank sold for roughly $500,000 an acre, he added.
Bill Bostleman, whose Bostleman Corp. in Maumee has handled projects for retailers in the Toledo area, said chain-store companies have definite ideas of where they want to situate, so the price of the land is often not an issue. Retailers pay off the site over many years, so higher sales volume from the better location can make the land price worthwhile.