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Photo courtesy: Photo by Nick Krug/Journal World
Downtown Lawrence is pictured in this December 2017 aerial photo.
I know retail has recovered in Lawrence since the pandemic. City Hall’s sales tax collection has increased over the past two years, confirming this idea. (Plus, Visa provided me with a personal trainer, and there was enough activity on my credit card to keep me fit and ready to sign checks for years to come.)
But do you know who hasn’t gotten the memo? New retailers. Many new retailers have not entered the market recently in the community, and the number of vacant stores is starting to show that.
Lawrence’s retail vacancy rate at the end of 2022 is up from a year ago and is now higher than both the Kansas City and national averages, according to a new report from the Lawrence office of Colliers Commercial Real Estate.
The overall vacancy rate for retail space in the city (this definition also includes restaurant space) was 6.44%, up from just over 5% in 2021. This contrasts with Kansas City and national retail average vacancy rates of less than 5%. Importantly, in 2022, Kansas City and nationwide rates fell while Lawrence’s rates increased.
But perhaps more eye-catching is the downtown vacancy rate. That he was 10.17%, the highest among the city’s commercial districts.
Alison Vance-Moore, senior vice president of Lawrence Colliers’ office, said there was “a little bit of scare downtown” after the pandemic. made him feel better about the prospect of filling empty spaces, some of which he said had already happened.
But she also told the crowd at last week’s event that the rebound happening downtown is risky. She argues that even the perception that downtown is a place where begging activity is rampant can damage community efforts to keep downtown a vibrant retail center. and city hall leaders to collaborate on ideas.
“I think we need to work together on some solutions in a time sensitive way,” she said.
South Iowa Street is another big retail area in the city. Colliers report that year-end vacancy is holding up at 4%. However, there are some large-scale vacancies that deserve attention. His two restaurant spaces on 31st and Iowa (formerly Torchy’s Tacos and On the Border locations) remain empty. Border locations are examples of long-term vacancies despite being highly visible at prominent intersections. But it’s not even near the driveway which is easily accessible from Iowa Avenue. Some use the location as proof that Lawrence is making too much of it in the restaurant space, while others claim the city did not allow the space to be built in a commercially sound manner, so I am against it. (As for me, let me “hold” your tacos while you discuss it.)
However, the biggest new vacancy on the southern Iowa Strip was the closure of Bed Bath & Beyond, which it reported in November. She didn’t offer any hints of new retailers in the space. I’m here. But others may be interested.
The 23rd Street Corridor also has an ample amount of retail and restaurant space. Vacancy rates are also on the rise, according to the latest report. The vacancy rate on 23rd Avenue, west of Massachusetts Street, is 7.1%. A portion of his 23rd Street east of Massachusetts Street challenged downtown for the highest vacancy rate in town at 10.16%. (There’s major road work going on right now, so the best way to access these businesses east of Massachusetts is with an “S” on your cloak and chest. The end.)
But Moore said developers may need to be prepared to work on renovations of some older strip commercial centers along that corridor and in other parts of town. said there were about 50 retail vacancies in such strip centers at the end of the year.
“For some of these properties, we may be asking for a fix,” she said. “Retail is dynamic, but real estate in some of those locations may not.”
Colliers’ report looked at other types of commercial vacancies in the city. While you might think retail vacancies higher than the national average would be the most worrying part of the report’s findings, Moore highlighted a category she finds particularly troublesome.
The amount of industrial space available in the city is at a record low, and the 4,000-employee, $4 billion Panasonic battery plant in nearby De Soto is likely to need industrial space. This is correct as it is expected to attract many potential supplier companies.
“In our market, industrial spaces are a sob story,” says Moore.
According to the report, the vacancy rate for industrial space is 1.73%, down from a low of 1.9% a year ago. She showed the crowd at last week’s event a slide listing just nine of her industrial spaces available in the community.
“It’s a shame,” she said.
The report notes that even VenturePark’s large, relatively new buildings are fully rented, but don’t necessarily serve as major employment centers. The building is now used as storage and warehouse space for several tenants, most recently including Berry Plastics.
While these large buildings are convenient, Moore says communities really need less than 15,000 square feet of industrial space with overhead doors and loading docks. She said the small amount of new investment that has occurred in the industrial market has paid off. She noted that all eight of her spaces in a strip building of small to medium-sized industrial spaces at 2460 Fairfield Street—right behind her supply of tractors—are occupied.
Lawrence’s industrial vacancy rate of 1.7% is lower than Kansas City’s industrial vacancy rate of about 5% and the US average of about 4%.
Office space is the last category measured by Colliers’ report. Not uncommon in Lawrence, it had the highest vacancy rate of any commercial category. The report showed office vacancy at 12.2% at the end of the year, up from 10.4% before the pandemic began.
The office spaces reopening in the market are looking different than they used to, the report found. I point out that there is.
“Hybrid models are here to keep moving forward,” said the report.
But some office users are simply out of town. Vacancy rates have increased in 2022 due to the departure of several large users. This includes Payless Shoesource, which closed its 18,000-square-foot office at 4910 Corporate Center Drive in West Lawrence. As we reported, the struggling shoe retailer attempted a rebuild, using the space as a joint headquarters, even though most of its management was in Miami.
The biggest loss to the market was vacant call center space. Longtime residents will remember this place as the old Surrey His Mae building near Sixth Street and McDonald Drive. More recently, it has been home to financial services companies such as DST and Boston Financial. The report confirmed that about 50,000 square feet of space had been vacated in the building. That means it could become a residence for your new employer. Keep an eye on the news around it.
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