By Larry Eliason
I previously wrote an article on Commercial Leasing Basics. In this article, I want to revisit some commercial leasing basics as well as talk about the current commercial leasing environment.
Whether it is for a small office, retail, warehouse, commercial garage or a ground lease, a Tenant should perform some due diligence to assure that the space and the site are properly zoned for the proposed use and/or uses. You also want to make sure that you do not inherit some environmental consequences left behind by a prior tenant.
In many towns, Building and Life Safety Code review and interpretation will certainly be part of the discussion for occupancy. Sometimes it is just a change of occupancy and sometimes it is a change of use that could trigger additional work and costs. On many occasions, current septic system capacity or lack of capacity has killed leasing deals for prospective Tenants and Landlords.
Landlords as well as Tenants today should consider engaging a Commercial Real Estate Agent Broker to assist them with the leasing process so expectations can be met.
And in some cases, a Real Estate Attorney should also be engaged to review and negotiate some of the terms of the lease agreement depending on the size, scope, and complexity of the lease.
The overall vacancy rate for commercial space in the Windham Marketplace appears to be very low. Not all Landlords and Brokers participate in Commercial Leasing data bases like the New England Commercial Property Exchange (NECPE). So, sometimes you end up driving around town looking at “For Lease” signs. Today, I can share generic information on a few recent Windham based deals.
The Windham Shopping Plaza did lose Olympia Sports after being a tenant for many years. The Furniture Gallery expanded their retail footprint by absorbing this space adjacent to their existing storefront. I believe that The Furniture Gallery owners recognized the trends and growth happening in Windham.
Shaw’s Plaza lost Fashion Bug, Day’s Jewelers, GNC and Dollar Tree years ago. The shopping center recently changed ownership and the former Fashion Bug location is now occupied by a Martial Arts School specializing in Brazilian Jujitsu. A couple of other small spaces have been filled by a Hair Salon and a Pool Hall. The end cap to the left of Staples is still vacant but is actively being marketed.
The Windham Mall was reported to be full last year after 25 years. There may be some small vacancies periodically as tenants move around but overall, a strong indicator that business at the Windham Mall is good!
A vacancy at 48 Tandberg Trail in Windham that is a well-appointed professional/medical arts space, was recently leased to a Day Spa. This is an existing business growing into larger space to accommodate its customers.
A vacant older commercial office building at 733 Roosevelt Trail was recently leased to a Chiropractor and that building is being refurbished now for occupancy later this month.
A private office in an adjacent building at 733 Roosevelt Trail was just leased to professionals that work remotely and needed flex space. Other recent office leases at this location include a Massage Therapist and an Occupational Therapist specializing in young children.
A 1,260-plus Square Foot Commercial Warehouse space at 91 Tandberg Trail has been leased to a Maine family-owned Sign Company. This space offered 3-phase power, prominent signage, and a convenient North Windham location.
A letter of intent has been signed for 3,100-plus Square Feet of professional office at 35 Main St. in South Windham. The space offers several office suites, open flex space, conference rooms and a large kitchenette.
There continues to be a lack of commercial warehouse/commercial garage bay space available. If space becomes available, it generally leases up quickly especially if the overhead doors and warehouse have necessary heights desired as well as other amenities.
The cost of land, the cost of new construction, the cost of permitting and impact fees and the cost of commercial money have been key factors in new buildings not being constructed for additional leasing capacity. Development costs can at times outway the return on investment needed.
Do you wonder why some spaces sit vacant for long periods of time? Well, timing and cycles in a market are, of course, factors. And landlords control the lease rates for their own spaces. Tenants look for location, amenities and look at infrastructure as well.
Windham has had a lack of infrastructure such as no public sewer, so we have had to rely on existing private septic systems or install new very expensive systems. The light is at the end of the tunnel so to speak with an investment in public sewer coming to the business sector of North Windham in about three years’ time.
If you are looking to list commercial space for lease or are considering leasing commercial space, please feel free to reach out to us at Butts Commercial Brokers. We have many years of Commercial Leasing experience in Windham and the surrounding communities. <
Larry Eliason, a Windham resident, is a Commercial Broker with Butts Commercial Brokers and can be reached at 207-415-2112 or by email at LarryEliasonBCB@gmail.com.
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