Friday, Oct 28, 2016
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Real Estate

Strip-center construction in area gains energy


Leasing has been slow for this Holland-Sylvania Rd. project.


After a slowdown because of poor economic conditions since 2000, strip shopping center construction in the Toledo area is heating up again.

At least six centers of 10,000 to 20,000 square feet have opened since the first of the year or are nearly completed. Four other projects are planned, and others are in the initial market test stages.

Plus, several centers are getting makeovers to compete with the new projects.

"There is a demand for new retail space in the market," said Duke Wheeler, a commercial real estate agent with CB Richard Ellis/Reichle Klein in Maumee. "We're not seeing a lot of the big users fighting for space, but we are seeing new smaller users looking for space."

A CB Richard Ellis midyear report on local retail found increased demand ended an 18-month period where average asking rents were dropping.

The new strip center activity, Mr. Wheeler said, could add 40,000 to 60,000 square feet to the nearly 18 million square feet in the area.

"It comes back to location," said Mike Denman, vice president of Timberstone Group Inc. The developer built a center on Talmadge Road adjacent to Westfield Franklin Park in 2004 and has announced plans for another one next door.

The increase in strip center building seems to be driven by low long-term interest rates, he said.

Joe Belinske, a principal with Michael Realty Co. in Toledo, said a new strip center on Secor Road near Executive Parkway found tenants who were leaving Westgate Village Shopping Center because of its reconstruction.

But not all the projects have taken off, he added.

Mr. Belinske is marketing the new Bancroft Village, at Bancroft Street and Holland-Sylvania Rd. The project is open, but leasing has been slow.

"The landlord's intention was they were trying to use a nearby Kroger as a anchor, but their project is not filling up as fast as they thought," he said.

Leasing in such centers generally is by tenants in older strip centers, which means some of older centers will be hurting, he said.

Still, some existing centers are getting facelifts. For example, a center at Sylvania Avenue and Holland-Sylvania recently was renovated, and Timberstone is renovating the Deveaux Shopping Center at Douglas Road and Sylvania.

But Mr. Belinske said he expects the new construction to end soon. "People aren't refinancing their homes anymore and they don't have that extra income that came with it," he explained. "That was the money they spent with retailers."

Contact Jon Chavez at:

or 419-724-6128.

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