Slow improvement returns interest to commercial building, sales opportunities

By Bowdeya Tweh   [bowdeya.tweh@nwi.com], (219) 933-3316
Publication date: 03/04/2012 Source: NWI Times (nwitimes.com)

VALPARAISO | Commercial and industrial landowners around the region are redoubling efforts to market their parcels now that the economy has brightened from the recession's dark days.

Building activity may heat up this year, but officials from local economic development organizations and land development companies say they have learned to be cautious and not overextend themselves.

Don Koliboski, economic development director for the Northwest Indiana Forum, said project inquiries to the organization have started the year off well and were up 40 percent in 2011 compared to 2010. He said part of last year's success was the result of trying to bring Illinois companies to the region, touting lower business costs and a stronger state fiscal climate.

Dave Lasser, owner of a real estate brokerage in Merrillville, said Lake, Porter and LaPorte counties have an office, retail and industrial occupancy rate of between 80 and 90 percent, which he said is "not that bad."

Lasser, of Commercial In-Sites, said real estate continues to slog through the post-recession era. However, he's encouraged that builders are testing the waters, resuming activity that ground to a halt a few years ago.

"There's a huge appetite for us to get more product out there," said Mike Micka, vice president of development for Holladay Properties.

Finding the mark(et)

Holladay Properties has plans to break ground this year on buildings totaling 84,000 square feet at its Ameriplex business parks in Portage and Merrillville. Lasser said although the region has no shortage of available commercial or industrial property, it is lacking large, prime buildings that are desirable to woo businesses.

Some landowners are returning leasing and sales signs to parcels dotting the region. Multiple economic development officials around the region told The Times parcel development activity should continue or strengthen in Munster, Valparaiso and other key commercial corridors this year.

A low-interest-rate environment for the past few years still hasn't helped the market fully recover. In some cases, Micka said companies may have interest in an area, but there isn't a building to suit their needs. Community banks have continued lending for projects following the recession, but Micka said they could balk at providing funding if potential tenants aren't immediately prepared to sign leases.

"Deals still take a little longer to get done," Micka said. "Tenants have to get their financing arranged, (but) there's more opportunities out there."

Renewed spirit, lessons learned

New, shiny brochures and better property descriptions are part of small steps developers are using to improve their product profiles, said Drew Mitchell, a Holladay Properties vice president of development.

"Your marketing has to get more effective," Mitchell said. "When people stop walking in that door, you have to step up your game." 

For Rex Richards, making economic development decisions can be as much about "curbs and gutters" as it is about land, bricks and mortar.

Richards, president of both the Greater Valparaiso Chamber of Commerce and the Valparaiso Economic Development Corp., said prospects want to know about a community's vibrancy, cleanliness and ability to deliver services before locating.

"Economic development, it's a sales game, and you always have to put your best foot forward," Richards said. "Whenever someone expresses interest in Valparaiso, we have to sell them."

Bruce Boyer, president of Boyer Construction Group and Boyer Properties, said development could start by the end of the year on 34 acres at the southeast corner of U.S. 41 and Main Street in Schererville. Construction of a retail development about a fourth the size of Westfield Southlake mall was slated to start in late 2007.

Boyer, whose company is leading construction of a Muller Acura dealership in Merrillville and projects in Valparaiso and Munster, said developers are now being more cautious when making land development decisions.

Koliboski said since the Northwest Indiana Forum represents seven counties, it has pooled resources to help improve regional marketing efforts. 

"We're getting a lot more bang for the buck," Koliboski said. "Instead of Portage, Valparaiso and Duneland putting out marketing pieces, they have a Porter County (Economic) Development Alliance. They've decided to pull together resources and when we can work together, we will work."

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