Office Parks Prosper On Convenience
Convenience and affordability are the primary reasons business owners locate their companies in office parks, according to area developers. But there are also other amenities companies may not find elsewhere.
In office parks, tenants have none of the responsibilities for things such as snow removal, lawn maintenance, and building maintenance. Even emergency repairs are handled by the property manager who often has an office on site, explains Chuck Joseph, sales associate at Ruth-Hurlbert in Howland.
Office parks such as North Mar Center, Howland, usually have other amenities as well, he says, such as on site postal centers and pick-up stations for shipping services.
“All that is included in the rent, Joseph says. However, not every lease is the same. A gross lease, he says, includes common area maintenance fees-known as CAM-and may even include building insurance and utilities while a net lease would include only the base lease rate; CAM, taxes, utilities, and building maintenance fees would all be extra. In addition to the convenience office parks offer, they also provide new or start-up companies with the flexibility to grow without being locked into a building the company owns.
Many start-up owners don’t know how fast their businesses are going to grow, or what their needs will be down the road, Joseph says. So, it may be better for them to lease space while they are building their business or practice and then, if they want to build equity in real estate, buy a building later. In an office park, “you can go into business for yourself with a security deposit and one month’s rent,” says Tom Niemi, broker associate at Landmark Commercial Real Estate Services, Austintown.
The minimal investment is appealing for start-up companies and business owners who would rather invest money in building the business or in processes that will help the business produce a product than in buying and maintaining property, he says.
Business parks also meet the needs of companies with small space requirements. Building costs for an 800- or 1,000-square foot building would be prohibitive, Niemi says, but in an office park, a company could easily rent a small space and still have all the amenities larger companies enjoy, such as ample convenient parking and in some instances, visibility from major thoroughfares.
Customizing space to meet the specific needs of a business can be more cost-efficient in an office park too, Niemi says, especially if all that is required is putting in or taking out a wall.
For larger businesses that would require extensive modifications in available space, however, that may not be true, he says. “It may be more efficient for them to build.”
Niemi says he does get calls for stand-alone buildings – “once in a while, there aren’t too many,” he says. But because the costs to revamp existing stand-alones to meet the needs of a particular business often are prohibitive, business owners who want their own building usually buy land and put up their own. Groups of doctors and lawyers often do that, he notes.
Another advantage for companies that locate in business parks, Niemi continues, is their access to other businesses.
At Weston Center, a new retail/ office center Landmark recently opened at the corner of state route 46 and Mahoning Avenue in Austintown, office tenants and their patients can “walk down the sidewalk and have lunch” at one of the restaurants located there, shop for groceries, or drop off the dry cleaning, Niemi says.
Proximity to major highways, visibility, the professional atmosphere and the fact that the space is brand-new are also assets for tenants there, he adds.
“In an office park, you take advantage of volume buying,” says Joe Sylvester Jr., chief executive officer at Joseph Sylvester Construction Co. Inc., Boardman,
Sylvester has developed several business, office, retail, and industrial centers throughout Mahoning and Columbiana counties, including South Bridge Executive Park in Boardman, one of the first office condo parks in the county. Occupants there have the option of owning or leasing spaces from 600 to 8,000 square feet.
The advantages of volume buying make it possible for businesses to afford space in more desirable locations, Sylvester says. The cost of land, especially along the Mahoning Valley’s busiest thoroughfares, prohibits many businesses from buying property there.
Locating in a business park such as South Bridge, on U.S. Route 224 or Southwestern Place , at the corner of Western Reserve and South Avenue in Boardman, enables companies to have a presence on the main road by sharing the cost, according to Sylvester.
Business park occupants, whether they rent or own space, have the added security of knowing that property values within the park will be maintained, Sylvester continues.
Unlike stand-alone buildings where the owner has no control over surrounding properties, all of the buildings and common areas in an office park receive the same care.
So, Sylvester says, business owners know that the building across the street or next door won’t be allowed to deteriorate and depreciate the value of surrounding properties.
Because of the amenities office and business parks offer, Sylvester says demand for space in his parks is strong.
“We have a single-digit vacancy rate,” he boasts. “The national average is 10% to 14%.”
The mix of tenants in this region, however, has changed over the years, according to Sylvester. The demand for space for medical offices has dropped off while demand for light industrial space had grown, he says.
Fewer physicians are looking for office space because many doctors have left Ohio, Sylvester says. He attributes their relocating to the high costs of malpractice insurance.
Sylvester Construction has been in business since 1949, and has been developing professional office parks since 1969.
The key to success, Sylvester says, is “you take care of your people. You take care of your tenants. Phone calls don’t go unanswered.”
Deciding where to build is also important, he says, and sometimes that’s a gamble, trying to predict where growth is likely to occur.
Right now, he says, “growth is definitely heading south, toward Columbiana.”
Sylvester Construction builds to suit as well as on spec – buildings that would appeal to a variety of users. He says there is still space available in many of his company’s developments, including Southwestern Place where a retail plaza will be built.
Because business parks bring jobs into a community without the noise and truck traffic associated with heavy industry, Sylvester adds, communities are very receptive.
April, 2005 Business Journal
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