Local commercial real estate market experiences challenges and bright spots
An expert says the retail sector of the market is doing well, while office space struggles.
TOLEDO, Ohio (WTVG) - When you drive around town, you probably notice signs offering up retail and office space.
The observation alone can lead someone to ask how the local commercial real estate market is faring right now after the pandemic forced so many changes?
It’s not uncommon to see several signs advertising retail and office space within a short distance. While some commercial market sectors are struggling, those who make their living off it say there are plenty of bright spots, too.
Miller Diversified has been in business for over a century, covering several bases in the real estate market.
Jerry Miller is the vice president of the company started by his grandfather.
“I say we do just about everything in the real estate business. We have a development arm, construction, real estate brokerage and property management as well as an investment fund,” Miller said.
Miller says the retail portion of the commercial market is relatively strong now.
“I would say the neighborhood retail sector is doing very well across the board. Vacancies are low, and retailers are succeeding,” Miller said.
Similar to most areas around the country, the office space side of the local market is struggling.
The source, in part, is companies shortening work weeks and a growing number of employees working from home.
“I think the office market has changed a lot very rapidly. It is still evolving, and we have yet to see exactly how it will land. What I’m seeing is the space will look different in a lot of cases,” Miller said.
Miller says sharing office space and downsizing are becoming more common.
“The spaces are designed differently and smaller. So a company that once had 10-thousand square feet of space may now only need 5,” he said.
Higher vacancy rates often mean lower lease or sale rates, so Miller says his company sees this as a good time to make investments.
“We have [the] opportunity to buy at a lower dollar figure, and we go in and retrofit for new tenants and bring the value back up,” he said.
Miller added that there is another bright spot in the local commercial market— the light-industrial and large-scale warehousing sectors.
“It is a booming part of the market now, and I think Toledo, in particular, is well positioned to take advantage of that,” Miller said.
Miller says an important thing to point out about our local market is that it is fairly steady. While we may not see extreme highs in some markets, there aren’t extreme lows either.
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