Plentiful strip mall spots offer opportunities for businesses
One by one, Jan Jackson’s neighbors began to disappear.
The cycle shop left. The furniture store left. The women-only gym left. The window and door company left. The coffee shop left. Jackson, who owns The Great Frame-Up, is down to two neighbors to the east of Albertsons in the Redlands Marketplace strip mall, 2518 Broadway.
Every other storefront is bare except for a Bray Real Estate sign in the window.
Jackson doesn’t blame the strip mall’s emptiness on location. Her business is doing fine. Poor business planning is probably the more likely culprit, she said. She said paying $12 a square foot, the going rate in this strip, is fine, but she thinks other strip malls that are even more vacant could benefit from a price reduction.
“You’d think they’d lower the rent to give someone a break, but I guess they’d rather keep them empty,” Jackson said.
Sid Squirrell of Bray Real Estate helps owners from Aspen and Carbondale lease their strip malls in Redlands Marketplace and in another strip of five units next to Ace Hardware at 2140 Broadway on the Redlands. Of the five units, only one is full, with an Edward Jones. But
Squirrell doesn’t think leasing for less is a good option for filling the other four spots.
“We’re at $12 a square foot, which is a quality price for that center,” Squirrell said of Redlands Marketplace. Triple nets, in which tenants pay taxes on a building, can go for $4.80 per square foot a year at the strip by Ace and for $5 a square foot per year at Redlands Marketplace.
However, concessions aren’t unheard of.
“The landlords are giving up a little bit here and there but nothing drastic. We gave some concessions to the existing tenants that needed a little help” at other strip malls, Squirrell said.
Most strip malls in town aren’t desperate for business, Squirrell said. And even those looking for a tenant or two could be worse off, he said.
“We figure 4 to 5 percent vacancy is normal,” Squirrell said.
On Orchard Mesa, two strip malls have managed to attract two renters apiece and have space for plenty more. Jeptha Sheene of REMAX has seven units ready to lease in the 3-year-old strip mall at 230 Lynwood St., near U.S. Highway 50. The mall is home to Orchard Mesa’s library branch on one end and Domino’s Pizza on the other. Rent is $12.35 to $14.02 per square foot per year.
Sheene said it’s a slow time for all kinds of commercial properties, not just strip malls. The Lynwood Street location may be sputtering, but she believes interest will rev up eventually.
“Businesses have been slow to gravitate to Orchard Mesa, but growth is coming,” Sheene said.
Katie Worrall of Bray has brought two tenants — Supercuts and Anytime Fitness — into a second strip mall on Orchard Mesa, a 12-unit site at 2740 U.S. Highway 50, and has two restaurants interested in leasing space. Worrall said strip malls are a good buy in a bad economy.
“Where can you find a 1,200-foot, stand-alone property? Plus, stand-alones command the most rent,” Worrall said.
She said her strip mall has an edge because it isn’t connected to a grocery store or big-box chain store. Some strip malls with that connection charge more rent because the location is more likely to have offshoot foot traffic, Worrall said.
But some people are willing to pay the price. For example, Worrall leases a strip mall connected to a Safeway on Horizon Drive. It has one spot open, and it will be filled as soon as the restaurant that wants to move in has obtained a liquor license.
Anytime Fitness Owner Eddie Elari said he can’t wait for more tenants to pop up around his neck of the strip mall. He picked the gym’s location because it has easy access to a major highway and the rent was in his price range. Some people didn’t realize his business was open at first because the strip mall had “been empty so long,” he said. But now he has more customers. And hopefully someday soon, more neighbors.
“We’re hoping with the economy someone will take a shot like we did and move in,” Elari said.