The News Herald (Willoughby, OH)
Is retail climate warming up?
Efforts of officials throughout Lake County ongoing in evolving market
When it comes to filling large retail vacancies, it often takes more than an improving market.
Such is the case for Dan Laidman’s Painesville Commons shopping center, at 1521 Mentor Ave. in Painesville Township.
He bought the 140,000-squarefoot center in 2009 and lost the anchor tenant the following year. That major gap is just now being filled, with Planet Fitness moving into the old Marc’s space soon.
“Sometimes you have to be very patient,” Laidman said. “I think Planet Fitness will help turn the corner on that shopping center.”
He already has a Mexican restaurant ready to take the former Yuku Asian Cuisine spot next door.
“I’m working on a few other things,” he said.
Such developments encourage area business advocates that retail is alive and well in the region.
“...I think it’s always important to keep visioning for the future and moving the community forward.” — Willoughby Economic Development Director Tom Thielman
Varying voids
Local municipal leaders indicate that there is more to like than not on the retail scene.
While vacancies are slightly up from last quarter in Lake County’s retail hub of Mentor, officials note that the occupancy rate is still more than 94 percent.
That is according to the Cleveland 3rd Quarter 2018 Retail Market Report compiled by CoStar Group, a Washington, D.C.based provider of commercial real estate analytics. The company tracks about 179 million square feet of retail space in eight counties: Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Portage, Medina and Summit.
The bricks-and-mortar retail market is still evolving in answer to e-commerce, noted Mentor Economic
Development Director Kevin Malecek said.
“Mentor continues to receive inquiries on a daily basis from retailers enthusiastic about entering our market, and continues to be met with positive feedback when we make inquiries to retailers about locating here,” he said.
The third quarter total vacancy rate for the region
was 4.5 percent, down 0.3 percent from the second quarter of 2018.
The Lake County market contains an estimated 17.5 million square feet in 1,318 buildings, of which Mentor accounts for about 40 percent. The Lake County market had a vacancy rate of 4.9 percent, down 0.1 percent from the previous quarter.
About 5.5 percent of the retail space in Mentor is vacant, which is up 1.4 percent. The largest available spaces are 63,287 square feet in the Erie Commons, 56,257 square feet in the Mentor City Shopping Center and 20,000 square feet in the Mentor Plaza.
They include the former hhgregg and Babies R Us spaces, but there is talk of potential new tenants for both. Gordmans continues to be an active vacancy, recently temporarily filled by a seasonal business.
Neighboring Willoughby has had a stable retail market in the past five years, with no big box vacancies, Economic Development Director Tom Thielman said.
The largest single vacancy (26,475 square feet) is the former Audi auto dealership at 38845 Mentor Ave. on the Mentor border.
“The building has some limitations because of its age, design and prior use,” Thielman said. “The building ‘as is’ … would take considerable updating to reimage it into modern retail space. We are hopeful, because of the recent redevelopment of the former Nissan dealership into the Process Technology headquarters, that other commercial and manufacturing type entities may be interested in a similar adaptive reuse or transformation of the former Audi site.”
Other signs of life include the addition of about 10,000 square feet of retail to Pine Ridge Plaza with the redevelopment of the former fitness center and a new Starbucks. In addition, Jakprints printing company is beginning to move into the former Walmart in Eastlake, and the Meijer supermarket and Menards home improvement stores are in various stages in Mentor.
Along with the largest vacancy spoken for in Painesville Township, the number of new business permit applications was up 17 percent this year, said Painesville Township Administrator Michael P. Manary.
The new projects signal potential for a ripple effect, Eastlake Mayor Dennis Morley said.
“With the addition of Jakprints going into the old Walmart, I believe it will help us bring some other businesses to the Vineyards (shopping center),” he said. “They will bring in approximately 300 jobs and there will be a need for restaurants.”
Meeting the challenge
Communities can only do so much to fill commercial gaps, officials say.
Morley noted that Walmart was empty nearly four years because the retail giant owned the building and wouldn’t sell to another big-box store.
Lack of existing space is another issue.
“Nothing will necessarily be a ‘greenfield’ opportunity in Willoughby,” Thielman said. “We are looking at redevelopments which will maximize the highest and best use for opportunities we have, while being very sensitive to the local brand that Willoughby has become.”
For Painesville Township, demographics are an issue.
“Big retailers have predetermined requirements for population, income, age, average daily traffic, etc.,” Manary said. “It is a challenge to meet all of those requirements at the same time.”
Retailers are reviewing ways to deliver goods to the marketplace. Sometimes that means reshaping and reimaging their brick-andmortar locations, and turning them into warehouse showrooms that can ship directly to the consumer.
“Best Buy is a prime example of this activity,” Malecek said.
Meijer is among the many companies re-evaluating their building footprint.
“Currently, our newest store prototype is approximately 156,000 square feet,” said Spokesman Frank J. Guglielmi. “Our earliest stores were as big as 240,000 square feet and, in recent years, they were 190,000. While we still build some larger supercenters, the majority of our new stores are at 156,000 square feet.”
As always, proximity to would-be shoppers is key. Thielman sees opportunities for redevelopment near the lakefront with strong growth in new housing, as well as in the heart of the city and along Euclid Avenue. Most properties along that thoroughfare face challenges such as land assembly and zoning.
“But I think it’s always important to keep visioning for the future and moving the community forward,” he said.
Painesville Township officials seek to ease the process of opening a brick-andmortar business, Manary said.
“Specifically, we believe the future for retail in our township will be the small entrepreneurs who will appeal to the demographics in the township and surrounding communities,” he said.