Local commercial real estate professionals said they are seeing an upswing this year in commercial leasing activities and interest.
The value of commercial and industrial building permits throughout the Tri-Cities for the first half of the year was about $137 million, up 3 percent from the same time in 2011, according to statistics compiled by the Tri-Cities Home Builders Association.
And there are several large commercial projects still in the planning stages that are scheduled to begin construction this year.
?I think people have a firm grasp that our economy hasn?t suffered as much in the Tri-Cities and that things are strong here,? said Rob Ellsworth, managing broker, Windermere Real Estate Tri-Cities, Commercial. ?That has prompted a lot of local business.?
In addition, the area has received a lot of national publicity over the past two years touting the strong local economy, growth and livability.
Ellsworth said that has prompted more interest from companies outside the area, as well.
?The come in, see the low cost of living, the low cost of power and that we have water ? that is huge,? he said.
The change in the Washington State liquor laws has also prompted movement in the market and is bringing new businesses to the area, he said.
?New liquor distributors, who have main hubs in Seattle and Spokane, are siting facilities here and using it as a cross-docking area,? he said, noting that Southern Wine & Spirits has signed a lease with the company and will be moving into a space at 501 N. Quay in Vista Field.
Dirk Stricker, of Dirk Stricker Commercial Real Estate, said commercial lease rates in the area have started to stabilize and there seems to be a lot of people looking for space.
?The activity has picked up quite a bit,? he said.
Many people, especially doctors, dentists and others in the medical field are taking advantage of low interest rates on Small Business Administration loans.
Stricker said the SBA rules on those loans require the buildings to be owner occupied, but the low interest rates have spurred more medical office building construction. Often doctors or dentists build a facility capable of housing additional specialists to help offset their mortgage costs.
Lance Bacon, principal at NAI Tri-Cities said he?s been hosting a lot of market tours for people coming from outside the area, like regional and national franchisees and developers.
?Retail seems to be the strongest, followed by the financial and service industries,? he said. ?People are looking to be in strong, visible corridors, like near the mall.?
Another commercial growth hot spot in the Tri-Cities is at the Queensgate-Duportail off Interstate I-182 in Richland, where a new Les Schwab Tire Center is under construction, and the new Sterlings Restaurant and Bobs Burger & Brew opened earlier this year.
Jeff Fairchild of Fairchild Cinemas purchased 11 acres from the Kennewick Irrigation District north of I-182 and south of Duportail, behind Gold?s Gym, Wal-Mart and Home Depot, where he plans to build a multi-plex theater. The Richland Planning Commission conditionally approved a site plan for the project in late June.
Bacon said he is also seeking a lot of activity in the Southridge area, where Kennewick General Hospital recently broke ground on its new facility.
A new 52,000-sq.-ft. Yoke?s store is planned at 380 Keene Road, just west of Badger Mountain Park. Glen Englehard, the site developer, also plans to build a 14,000-sq.-ft. strip mall at the 17.4-acre site, where other commercial pads are available.
Two new hotels are currently under construction in Richland. A $6.5 million Marriott Towneplace Suites at 591 Columbia Point Dr. and The Hilton Homewood Suites Extended Stay Hotel at 1060 George Washington Way.
Five other hotels are in the planning stages in Richland. Tom Drumheller, CEO of Escape Lodging and owners of Cousin?s Restaurant in Pasco, is planning to build a boutique hotel at Columbia Point between Anthony?s Restaurant and the Marriott Courtyard.
Kadlec Medical System has an agreement with a private developer to build a hotel within walking distance of the hospital campus to serve patient family members.
Stew Stone, a Portland developer, has ambitious plans to build two hotels, including an Embassy Suites by Hilton and an extended stay hotel, at Horn Rapids Golf Course.
And in June, the Richland Planning Commission approved a site plan submitted by Gramor Development Washington LLC for a new four-story La Quinta hotel at 355 Bradley Blvd., across from the Shilo Inn.
Ellsworth said the robust commercial real estate movement is a good sign for the area, which has experienced large layoffs since stimulus money provided to Hanford through the American Reinvestment and Recovery Act has been used.
?We?re just seeing a lot of activity, but none of it is directly related to Hanford,? Ellsworth said. ?As the rest of the country starts to recover, the perception of all regions is improving.?
by Mary Hopkin
Tri-Cities Area Journal of Business
Source: http://www.tricitiesbusinessnews.com/2012/08/commercial-building-activity-stays-steady/
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