Large Commercial Real Estate Can be Daunting
The Solo Cup Facility in Springfield now has two tenants occupying a portion of the 1.35 million square foot complex. But with the building still partially empty, and the planned closing of Regal Beloit, KSMU’s Anna Thomas explores what large commercial real estate means for the area.
Commercial properties, around 10,000 to 25,000 square feet are in more demand, making larger properties, like the Solo Cup Facility, daunting for a commercial real estate agent. Mark Kerivan, commercial sales and leasing agent for Murney Associates and Realtors, says these facilities take a longer time to absorb into the market place.
“Large spaces like that, manufacturing, are few and far between as far as a complete tenant for that space. It’s just a real difficult task, and I’m quite certain that whatever building may come available will have that understanding as well. The absorption rate on something like that is going to have to be in the years, two to three years,” Kerivan said.
For Springfield, the popular option for many owners and investors is to turn to subleasing portions of the facility. This allows a profit to be made because the owner is still responsible for some utility and maintenance charges, as well as property tax.
While there are a lot of industrial spaces on the market, only a handful over the 100,000 square foot range, Kerivan says manufacturers are slowly improving and so will the absorption and real estate of these facilities.
“Real estate has picked up. We’ve had that fairly large hole in the market here for four or five years, and we’ve increased every year since that recession, 08’, 09’ period. Things are improving across the board, residentially and commercially,” Kerivan said.
Real estate at this scale has the potential to consolidate and relocate current Springfield businesses, but it is also an opportunity for national companies to have a centralized location.
For KSMU News, I’m Anna Thomas