|
<br />Charles Loesser, aud Company, a nationally recognized authority on metropolitan development trends,
<br />strategic plauuiug for metropolitan areas and for real estate companies. Jack Gould, H. S. G. Gould and
<br />Associates, based in Washington DC who has performed more than 1,000 specific consultant
<br />assignments since 1977and who specializes in retail market analyses on a nationwide basis; Cril Platican,
<br />Senior Vice President of Grubb and Ellis, specializing in office leasing and sales. He introduced two of
<br />these experts who would be available to answer questions. He advised that originally office building
<br />were in the cities, but as people moved to the suburbs, offices and retail followed. Offices were
<br />developed in cores, most of which developed around the affiuent housing, probably because the officers
<br />of the firm preferred to live near their office; consequently the first cores went east and south, very few
<br />went west. Later, others went further east, again following the a$luent housing. He explained that about
<br />6 1 % ofthe housing that is over $500,000.00 is on the east side; 12% on the south,• possibly about 12%
<br />along the lake; and maybe 2 or 3% on the west side. This accounts for the office cores were developed
<br />on the east side, with Rockside Road being developed primarily because of the highway access, but few
<br />office complexes were developed on the west side. He maintauied that there is a 22.2% vacancy rate in
<br />the downtown area; on the east side the vacancy rate is 9.8%; in the south core (which includes the
<br />Rockside area) the vacancy rate is 4.9%; the west (area north of I-480 up to the I-90 corridor, and into
<br />the downtown area) there is a 17.4% vacancy. In the last five years the total market absorbed 404,000
<br />square feet of office space, of which the suburbs absorbed 382,000 square feet with little being absorbed
<br />downtown and the majority being absorbed on the east side and Rockside. At this rate there would be
<br />an 8.3 year supply in western suburbs: southwest would have 7.6 years; south 1.2 and the east would
<br />have 3.5 years. He compared office price per square foot in various areas: Chagrin sold for $115.00 per
<br />square foot; a Rockside building sold for $111.00 for a square foot; and Great Northern Corporate
<br />Center sold for $76.00 a square foot which illustrates where offices are growing. Ther'e is a new office
<br />complex being marketed close to the airport, but every consultant they have talked to belieyes there is
<br />little demand for office space near the airport except for airport service type jobs; good airport office
<br />spaces is in demand at the major airport hubs, but Cleveland has no major hub. The Cleveland area has
<br />less than 1% growth so office growth will take a lot of time. He listed the regional malls in the suburban
<br />areas and the mall opening in Strongsville. He stated that North'Olmsted is a premier retail spot in the
<br />Cleveland area. He maintained that retail attracts retail, the more that is developed, the more that comes
<br />in. There has been some over building of malls and some have died off, in other areas of the country,
<br />and those communities have had to find other uses for them. The big box stores have recently been
<br />developed, and they, too, may go through a chauge. The good thing about retail is that, if one goes out
<br />of business, there is always something to replace it, but when corporations start down sizing, there are
<br />few replacements. When people shop in an area other businesses benefit, if people go elsewhere to shop,
<br />those business lose money as well. When Strongsville's South Park Mall opens, there will be a
<br />tremendous impact on several shopping centers, including Great Northem, since it is a state of the art
<br />facility. North OUnsted's response should be to shore up their retail, bring in more big boxes and new
<br />players, and in turn, other retailers will follow, which will help some of the vacancies in the existing
<br />centers. He noted that Media Play recently went out of business, but he believed it, too, would be filled
<br />quickly. Mr. Corsi, Biskind Development, owner of the property spoke at this time. He clarified that.
<br />Biskind Development started with the strip center and at the time it built the May Company, it was
<br />claimed that the department :store would destroy the strip center, but that clid not happen, the
<br />department store thrived and the strip center did better. Over time this has happened frequently.
<br />Regarding the vacancies in their shopping center, he explained in one section (near Petsmart) there have
<br />been several long term vacancies, which he maintained was done by design in order to accommodate the
<br />larger box stores, at this point they have assembled 35,000 vacant square feet, and they do have a
<br />tenant, but he will need 15,000 more square feet to meet h'ts needs. Further, they believe that there will
<br />be 100% occupancy in the center in the next 12 months. The Handy Andy store is vacant, but is still
<br />4
|