Increasing interest rates caused the viability of many commercial development deals to evaporate, leaving only the national businesses undeterred. Not to worry – high interest rate environments spur leasing increases and more amenities. It’s no surprise that we are seeing TJ Maxx, Beall’s Outlet, and Harbor Freight leasing at our most popular Community Center at the high traffic point of town. Starbucks is also entering the market on an outparcel.
Here’s a bit of unsolicited commercial leasing advice for landlords: Get your buildings in top notch condition to attract new tenants. Parking lots should be clean, well striped, brightly lit and pothole-free. Tenant suite signage should match in make and quality. Exteriors should be pressure washed and well landscaped. One caveat is that improvements should be in line with post renovation net operating incomes. With net fees on the rise due to insurance costs, landlords need to approach occupancy in a cost conscious way.
Top tier office parks are at 100% occupancy or under contract to be sold as Zachary still struggles with minimal office/warehouse space. The Thurston Watts 8,100SF facility is for lease at $5,000/mo. and is the largest warehouse available in city limits. The Sullivan Medical Office Phase II just unseated $25/sf. triple net Americana for the highest price lease per square foot at $29/sf triple net.
Mayor David McDavid is forming a new Economic Development committee, and national tenant brokers will be watching what strategic steps the new administration rolls out to compete for businesses.