Property owners work to fill lease space with competitive renting prices
From vacant buildings on Mitchell’s Main Street to empty mall space on the south end of town, there’s no shortage of available commercial and retail space in the city of Mitchell.
While traffic flow, location, and building conditions are just some of the variables that play a major role in property owners and realtors determining a price range for available retail and commercial space, some areas of the city offer much cheaper leasing space than others.
Resident Dan Sabers owns and maintains a large building on the corner of Fourth and Main Street, which houses two upper floors with 17 apartments, a main floor with numerous businesses and a basement floor with roughly four businesses.
As of now, Sabers said he has the building about 90 percent occupied. Considering the handful of Main Street buildings that sit empty, Sabers has been attracting retailers and entrepreneurs to rent his available space in the Midtown Plaza Mall. His price range he charges per square foot helps make his building competitive in attracting occupants.
“In my building, prices will go from $3.50 to $5 per square foot, but you’re usually looking at around $18 per square foot out by Walmart and Menards,” Sabers said.
Stacking up some of Sabers’ available retail space in his downtown building against space in the south end of town, such as the 820 E. Spruce St. building where Cherry Berry was formerly located, it is significantly cheaper to rent a Main Street space. According to the realty company listing the former Cherry Berry space, it’s priced at $12 per square foot, compared to Sabers’ $4 to $5 per square foot price range.
If filling space means having to lower the price per square foot, Sabers isn’t afraid to adjust, he said. Formerly known as the Hot Spot Bar, Sabers has the 2,000-square-foot space that faces Fourth Avenue priced at $4 per square foot.
“You have to take what you can get sometimes, but I have been fortunate with the businesses and tenants I have now. The new salon owners have been great, and they have the interior looking amazing,” Sabers said. “It can take a while to get space rented.”
For Sabers, determining the price of leasing space factors in a myriad of things.
“Front windows will add more to a space, the longevity of a contract will also be factored in, and the spaces in the basement that don’t have visible window space and front footage will cost less,” Sabers said of the spaces inside his Main Street building.
While Sabers acknowledged he’s experienced some challenges keeping his downtown building occupied, the typical price range of renting a retail or commercial space on Main Street keeps it competitive with other parts of town.
The big corner space of Sabers’ Midtown Plaza building sat empty for roughly a year, but he recently welcomed new tenants who opened a hair salon business about a month ago.
“Apartments always fill up fast, but retail space requires patience,” Sabers said. “With all the action taking place on Main Street lately, I think we will see more businesses gradually set up in downtown Mitchell.”
Upkeeping Main Street buildings proves vital for attracting tenants, Sabers said, as he pointed to the Fifth Avenue and Main Street building seeing steady occupants. The Fifth and Main building houses a cupcake business, sandwich shop, home and decor store and various businesses in the back end of the building.
Lacey Bechen and Jenn Hanson, co-owners of The Salon, can attest to the price range of available retail space in the city of Mitchell. The hair stylists were recently in the process of searching for a building to rent for their new salon on Main Street.
After comparing costs of rent and leasing space from almost all areas of town, Hanson said Main Street offered fairly lower prices than some buildings on the south and north ends of the city. Because the lease agreements are private documents, Hanson preferred not disclosing the actual price of the storefront space.
“We checked a few different spots, and when you get into the newer buildings, rent is quite a bit more expensive,” Hanson said.
As the two entrepreneurs are getting settled into their new salon business at 400 N. Main St., Bechen said opening the salon in downtown Mitchell was the clear choice.
Cheaper rent aside, Bechen said she’s always had a love for Main Street, and hopes to see vibrant energy continue to return. The two business owners rent their Fourth Avenue and Main Street corner spot, and have been pleased with the condition of the building.
“This was a great location with the big windows facing Main Street, and we wanted the vintage, historic-look, so it worked out awesome,” Bechen said.
Leasing space availability
Brian Eliason, real estate broker with Mitchell Realty, has been working to fill some of the vacant retail and commercial spaces since his arrival over a year ago. After he sold two Main Street staples, The Framer and Daylight Donuts, to new owners recently, he has kept the two buildings from going empty.
As of now, Eliason said he’s aware of roughly 10 vacant buildings on Main Street, some listed for sale and some not. Most of the buildings have an average available lease space of around 3,000 square feet, equating to a rough total of 30,000 square feet of available retail space on Main Street alone according to Eliason. The average price of renting the Main Street spaces ranges from $5 to $10 per square foot, he said.
“That may sound like a big chunk of vacancies and available building space, but it’s really not that much more than the other areas of town as far as buildings go,” Eliason said in an interview with The Daily Republic. “There is more available space in terms of square footage, of course, in other areas of town like the north side with Shopko and the Palace Mall sitting empty, but I think Main Street isn’t as empty as it may seem.”
Eliason alluded to the shift of online retail playing a large role in the vacancies of two buildings where former big box stores, Shopko and Kmart once occupied, along with the Palace Mall, which saw more tenants flee from the building over previous years. Between all three buildings, there was roughly 315,000 square feet available for rent or purchase in the city of Mitchell. But there is still a total of 164,000 square feet available between Kmart and Shopko, as both sit empty.
After Eliason sold the Palace Mall to an out-of-state developer on Monday following the Mitchell City Council’s approval of the the interested buyer’s plan to install storage units and leave the retail space scattered around the building for businesses to rent, 151,000 square foot is likely to soon be occupied, pending the sale agreement finalizing in December. Eliason is unable to disclose the final purchase price due to legal contract agreements, but the asking price of the Palace Mall was $999,900, equating to $6.62 per square foot.
Comparatively to other big box store buildings for sale, Eliason said $6.62 per square foot is a tremendous bargain.
“The price range for some of the available commercial space in Mitchell right now is tremendous, and seeing someone capitalize on that with the mall hopefully will spur more of it for Shopko, Kmart and other large building spaces,” he said.
The CHR building just west of the Palace Mall is listed for sale for $6 million, which includes roughly 50,000 square feet of office space, according to Eliason. The outlets surrounding Walmart and Menards is another area that has several vacancies, equating to roughly 15,000 square feet of space.