I just attended the Midwest Real Estate News Magazine Cincinnati Commercial Real Estate Summit. I heard a very interesting discussion about the Cincinnati real estate market, addressing retail, office, industrial, healthcare and investment properties.
Norm Khoury of Colliers International was the moderator.
John Thompson of Newmark Grubb Knight Frank discussed retail issues. John commented that the retail market may be softer than the other segments: there are less retailers due to consolidation and the increasing presence of big box retailers, and there is less demand for retail space in general due to internet shopping. Demand in the retail market is largely based on service providers because as John said you can’t get a haircut over the internet. John also pointed out the explosion in fast casual restaurant concepts and that food is driving demand at strip centers. However, many of these retailers are finding it hard to find sites and are all fighting over the same locations because developers are not building new strip centers in Cincinnati.
While the internet may affect demand for retail sites, Jeff Bender of Cushman Wakefield pointed out the internet has helped the industrial segment. There is an increased need for warehouse and shipping space to service the internet buyer.
Steve Timmel of Colliers International discussed the challenges of office development where the landlord must be prepared to pay large allowances in relation to the rent being charged. He contrasted that with apartment developers who can expense turn over costs. That led to a discussion on how a municipality could partner with an office developer to increase office development. A new office will produce additional payroll tax. A municipality could fund or help fund the tenant allowances and receive a good return by way of increased taxes. A great idea, but apparently not many municipalities are willing or able to do that.
John Rickert of SVN RICORE Investment Management Inc. and Paul Heiserman of JLL also served on the panel. It was a very interesting presentation and a very impressive panel of speakers. Clearly we have outkicked our punt coverage: the quality of the real estate professionals in Cincinnati exceeds what you might expect given the size of our market.