From the firm’s new headquarters on South 8th Street, John Egan, president of Southwestern Commercial Properties, took a few minutes to provide an overview of an ever-changing and sometimes challenging real estate development market.
Among his top picks for the next round of new neighborhood and destination retail centers were the town of Monument, neighborhoods near Falcon and the still-underserved southwest quadrant of Colorado Springs.
And once residential construction resumes, communities near Interquest Parkway and Flying Horse likely will see a round of new shops and services.
Until a year ago, Southwestern’s six brokers had participated in the development of about two small- to-medium-size shopping centers of about 10,000 to 50,000 square feet per year.
Two successful projects were completed in Monument at the Crossroads center. The first building leased-up two years ago and includes a popular Tres Margaritas restaurant. The second is near lease-up – adding a Sears catalog store and a dental office so far this year. A third building is planned, although construction probably won’t begin until at least 2010, Egan said.
In addition, four of the company’s brokers, Egan, Patrick Kerscher, Greg Kaufman and Robert Aertker, teamed to lease and develop the Shops at Bear Creek, near the intersection of Highway 24 and 8th Street.
Currently home to a 7-Eleven convenience store and a Boriello Bros. pizzeria, only one space remains unfilled.
“We’re getting plenty of traction and pre-leasing interest from retailers who would expand into various submarkets,” Egan said, “but it’s sure difficult to get the money for new development.”
He referred to conversations he’s had with other retail brokers who agreed. “They’re all busier than you’d think – but can’t seem to get the lenders excited.”
That trend might be due in part to recession-weary entrepreneurs.
“There are a lot of new small businesses out there looking for space,” Egan said, adding that downsizing and layoffs have motivated many to consider starting their own business. “As a result, we’re seeing a lot of new tenant activity.”
He also pointed to a number of regional or even national retailers that have expressed interest in getting into specific submarkets.
“Sunflower (Market) or Sprouts would like to open up in the southwest today, if they could find a good 30,000-square-foot big box,” Egan said, adding that the surrounding neighborhoods, along with the northern corridor both continue to be “healthy” economically.
As a developer, the company tries to avoid dependence on national retail chains like Linens N’ Things or Circuit City – both of which have left formerly thriving retail centers with large vacant spaces.
Still Egan is hopeful that a year from now, the situation will turn around.
A few banks, he said, are willing to fund new projects and are starting to loosen up, although very cautiously. And once forward motion resumes, areas like Falcon and east Colorado Springs, can look forward to a slew of new restaurants and retail.
Becky Hurley covers real estate for the Colorado Springs Business Journal.