News
Commercial Real Estate Gets a Boost
May 03, 2008
TUPELO, MS - Add a $1.3 billion automotive plan in a $1.7 billion retail market and you have the perfect combination for commercial real estate developers.
In fact, the commercial side of the realty business in Tupelo today could be as active as it has been since the early to mid-1990s, when The Mall at Barnes Crossing opened, spurring development in what is now the hyper-active Barnes Crossing Shopping District.
Lee County, the retail hub of Northeast Mississippi, posted some $1.7 billion in retail sales last year. Hoping to get a piece of that lucrative pie are developers who see even better days ahead.
For example, last year Texas-based The Woodmont Company, opened the 200,000 SF King's Crossing shopping center, anchored by Kohl's and Ross, on North Gloster near the mall.
Other developers have proposed site plans for the area too. And the Tupelo Commons development got a new owner in Tupelo Furniture Market CEO V.M. Cleveland last year, with hopes of revitalizing interest there.
And in New Albany, Sherman and Pontotoc, commercial activity is picking up too.
"Highway 15 north of Pontotoc and in Sherman has seen a lot of interest," said Jack Savely of Mossy Oak Properties in Pontotoc. "While the housing market in the first quarter was about the same this year as last year, the commercial market has been very good."
Toyota is building a $1.3 billion plant in Union County near Blue Springs, which is some 15 miles from New Albany and about two miles from Sherman. The plant will employ about 2,000 workers when it opens in late next year.
Clay Short of TRI Commercial Realty said commercial developers with capital are looking for the right opportunities to invest, even as the economy overall is on the verge of recession.
"It's a struggle in some ways, but in general, business owners and investors with money are looking at the low interest rates and seeing opportunities for the future," he said. "Not everybody is in that position, but those that are, are in great shape."
Phil Purdom, Director of Leasing for David A. Hocker and Associates, a Kentucky-based company that developed the Mall at Barnes Crossing and more than 40 other shopping centers across the country, said the national outlook "is a little tough right now."
Tire kickers looking at developers' moves are akin to playing the stock market - buy low and sell high. For commercial developers, they look for a piece of property they think will gain in value in the future. Given the current economic climate, that can be risky business, but if a company has the capital to sit on property, it might be in very good shape when conditions improve.
In Northeast Mississippi, the arrival of Toyota has drawn attention to the region, and area developers say it's a good problem to have.
"There are a lot of tire kickers out there," said Clye Whitaker of Whitaker Realty in Tupelo. "We've shown a lot of property to people, some of whom think they can buy something cheap and go from there." "But you don't know if they all have the financial resources to follow through or not."
Jeff Snyder, General Manager of The Mall at Barnes Crossing, said commercial activity is increasing, but some of that hasn't come to fruition. Many national retailers are scaling back or re-evaluating their expansion plans, and in some cases, smaller markets like Northeast Mississippi and Tupelo could be passed over. Still others see smaller markets as opportunities to grow.
"There's a lot of speculation on sites," Synder said. "But there are people out there who are looking at the big picture and thinking ahead...I think we have a solid market here, and there really is interest here."
The Woodmont Company, a Fort Worth, Texas-based commercial real estate investment and brokerage firm, has been in business for 28 years, growing to a nationwide network of more than 70 professionals and dozens of partner companies. Woodmont has developed, managed and brokered tens of millions of square feet, always focusing on a commitment to personal service and the client's perspective. With offices in Fort Worth and Dallas, The Woodmont Company's services include site selection, development, brokerage, investment, and property management. For more information, visit www.woodmont.com.
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