As managing broker and sales manager for Coldwell Banker Fishman & Company in Olathe, Kansas, Lee Brodbeck has seen commercial real estate markets both good and bad. That’s because Brodbeck is no newcomer to the industry; he’s worked in commercial real estate for more than 20 years.
Midwest Real Estate News recently spoke to Brodbeck about the commercial real estate industry in the Olathe area and his hopes for the future of this region. Here is some of what he had to say.
Midwest Real Estate News: Let’s start with the obvious question: Have you seen commercial real estate activity in the Olathe area increase this year when compared to 2011, 2010 and 2009? Lee Brodbeck: Definitely. We are seeing more activity in all of the commercial sectors and in all of our markets. Construction has not take off yet. We are not seeing much new construction in our area. But we are seeing increased demand for small office spaces, industrial spaces, retail shops and, of course, multi-family.
MREN: Why do you think that activity is increasing now?Brodbeck: There is a lot of pent-up energy out there. People are getting more eager to make moves. They are starting to feel that maybe the economy is finally starting to improve. I am seeing a lot of people who are deciding that this may be the right time to either expand their businesses or move to a new location. After all, rents are affordable right now. This still a tenant’s market. The feeling out there just seems to be a lot more positive than it was a year ago.
MREN: Are there any commercial sectors performing better than others? Brodbeck: If you look at last quarter’s stats, you’ll see that there’s not been a huge increase in lease rates or net absorption. But there have been modest increases. The properties that are performing the strongest, that are attracting the most attention, are the multi-family units. There has not been much new construction in this sector, so many of our multi-family properties are pretty full. This has made them very attractive properties. Landlords are able to raise rents without chasing tenants away.
MREN: Is there anything unique about the Olathe market that you think sets it apart from other markets in the Midwest? Is there anything that is helping this market as commercial brokers work through the slow recovery? Brodbeck: I think we’re stable. That’s pretty common among the markets in the Midwest, but it really holds true here. You see such bigger swings in the market on the East and West coasts than you do in the Midwest. We do not fall as heavily as those other markets do. We are also fortunate to have a very strong farm economy here. The farm economy is strong today. Crop prices are up. A lot of people with money are interested in buying a good farming community today.
MREN: Where do you see your market heading in the next year or two? Brodbeck: A lot of that still depends on the financing industry. People want to borrow money. We hear that the banks are ready to make loans. We have been hearing that for years, though. If you see financing increase, I think that you’ll see an even bigger turnaround in all markets.
If construction starts would increase, that would have a big impact on our region, too. Construction has been down for a long time. I think that if we see some construction it would start a snowball. We are seeing more people looking at Plan Commission meeting minutes. They are starting to take a look at possible projects. They are looking at the appropriate zoning information. I don’t have any specific dates, but we can see that people are becoming more interested again in new construction.
