Medical Mobilities has leased the old PSNC building on Church Street. It had been vacant for years. The tenant can purchase the building for $1.05 million in the next two years.

The “coming wave” of commercial real estate defaults will affect the national economy, with office condos, office buildings and even malls going into the tank. Everybody’s talking about it, but will it happen here? Or, is it a case of the national media pushing too hard on a vulnerable subject?

There is indeed a Congressional Oversight Panel focusing on corporate and commercial real estate lending and how toxic loans could affect the financial system and the economy. Some international banking analysts are saying the extent of the toxicity is on the order of hundreds of billions of dollars. It will take years to work them out.

Is the Golden Crescent commercial real estate market in terrible shape? Probably not, according to local brokers. While the market is weaker than last year, the leasing business is suddenly brisk, with considerable activity in the past month.

Sales are another matter. Tighter lending rules for anything other than owner occupied properties has largely staunched sales activity. Sales levels are as low as anytime during the past 25 years, says Tom McMahon, managing director of Sperry Van Ness/McMahon & Associates in Cornelius.

McMAHON

“Leasing activity is back to a pace that we were doing prior to the slowdown last year. Our leasing activity is extremely strong right now. With that being said, landlords are making concessions, rates are trending lower, but people are occupying space and that’s what’s important,” McMahon says.

This is a good time for small business owners to evaluate their space needs and look for potentially more economical space and larger spaces at the same price. After all, that’s what the big guys are doing.

The question is whether we’re at the bottom, months away, or, perhaps, in a trough that will linger for months on into years requiring a more thorough restructuring of the financial system.

GAITHER

Agreeing that business is picking up, broker Bill Gaither at Newport Properties in Mooresville, says tenants seem less likely to make a long-term commitment. “From my perspective, there is continuing weakness in the retail and office sectors. Lease rates seem to be firming, as lack of funding has virtually eliminated new product in the market, but lease terms are getting shorter,” Gaither says. Industrial andflex space is gaining some traction.

Jerry Furr, a broker with NAI Southern Real Estate in Mooresville, says the market has indeed bottomed out and, at the very least, stabilized.

But there is a long way to go before he will call this a good market. “There has to be a demand for goods and products which will bring the jobs back, which in turn will create a need for offices and warehouse; for people to work in and store the goods and products.  I don’t see that part of the economy coming back for possibly a year or longer,” Furr says.

FURR

Still, his phone has been ringing more consistently in recent weeks.  Customers and clients are looking for the best lease rate and sales price knowing that there is a lot of inventory on the market. “So I believe rates may continue to come down for a while until the absorption time of the available space becomes much less,” Furr states, explaining that he often urges landlords to keep cutting prices until the space moves.

In Cabarrus County

Broker Carter Critz with Weichert Properties/Craven Commercial said he is seeing an upswing in owner-occupied office properties in Concord.

CRITZ

He scored a major coup in the leasing, with an option to buy, of the old PSNC building at the intersection of Davidson Drive and Church Street on the west side of Concord. The 15,000 square foot building has sat empty for years, after PSNC moved to space on Concord Parkway. The building was gussied up—red stripe and all—to be a First Charter office, but First Charter went ahead and built a landmark office building a block away, right at the northern gateway to Church Street, only to be acquired by Fifth Third.

The building, which is owned by C.M. Black Construction, rented for $4.80 per square foot modified gross lease. Tenant Medical Mobilities has an option to purchase the distinctive property at $1.05 million in the next two years.

“I am getting a lot of leasing calls in general and many of those are interested in lease/option scenarios,” Critz says. “I am also seeing that landlords would rather fill a vacancy at a discount to a financially strong tenant as opposed to holding out for a higher rate and ending up with a tenant that won’t pay rent.”

RINKER

All in all, the commercial market in Cabarrus County shows signs of stabilizing. Activity continues to improve in the retail and industrial flex space markets. Leases have been signed for small office space as well. Rates for lease properties continue to be more negotiable and concessions for the right tenant are being offered, according Bill Rinker, owner of Rinker Commercial Properties based in Concord.

“Overall, the commercial market is looking toward improvement as the year progresses,” Rinker said.

A commercial sampler: Recent leases and sales

Concord
Tenant: Radio Free Cabarrus, broadcasting
Location: 310 Church St. N., Hidden Plaza
Size: 1,000 square feet, office space
Broker: Bill Rinker, Rinker Commercial Properties

Tenant: Medical Mobilities, electric scooters to elderly/disabled
Location: 809 Church St.
Size: 15,000 square foot, office/retail property, $4.80SF modified gross lease, option to purchase at $1.05 million in next two years
Broker: Carter Critz, Weichert Realtors/Craven Commercial

Tenant: Harvest Home Healthcare
Location: 919 Union St. S, Downtown
Size: 700 square feet, office space
Broker: Bill Rinker, Rinker Commercial Properties

Tenant:  O’Dalys Bakery
Location: Parkway Plaza, 1096 Concord Pkwy
Size: 2,400 square feet, retail space, $10 square foot base rent plus $2.50SF for CAM on a NNN lease, five years
Broker: Carter Critz, Weichert Realtors/Craven Commercial

Tenant: Crowson Law Firm
Location:109 Church St.
Size: 1,364 square feet, offices, $13.20 per square foot
Broker: Ed McAfee, Locus Real Estate Advisors (dual agent)

Tenant: Certified Nursing Assistant, training
Location: Lorenz Architecture Building, Cabarrus Avenue
Size: 1,000 square feet, $12 per square foot
Brokers: Leasing, Ed McAfee, Locus Real Estate Advisors; Listing, Zac Moretz, Locus

Cornelius
Tenant: Sinister Skate Shop / Skate Shop
Location: Shops On The Green 20930 Torrence Chapel Road
Size: 1222 square feet, retail lease
Listing Agent: Melissa Winter, Newport Properties Commercial Division

Tenant: Green Star Home Loans
Location: Suite 202 Johnsbury Square, West Catawba Ave.
Size: 2,300 square feet, offices
Brokers: Tom McMahon and Tim Caryl, Sperry Van Ness/McMahon & Associates

Tenant: Capital Creek Development
Location: Suite #201 Johnsbury Square, West Catawba Ave.
Size: 2000 square feet, offices
Brokers: Tim Caryl and Tom McMahon, Sperry Van Ness/McMahon & Associates

Tenant: Scardaci Construction
Location: Lakeshore Marketplace, West Catawba Avenue
Size: 1,000 square feet, $15.06 per square foot
Brokers: Leasing: Ed McAfee, Locus Real Estate Advisors; Listing, Sergio Solano, Allen Tate

Davidson
Tenant: Christopher Kemp, CPA
Location: South Main Square, Main Street Davidson
Size: 1,485 square feet
Broker: Rose & Assoc. Southeast Inc.

Kannapolis
Tenant: Brent F. King, attorney
Location: ReMax Gold Plaza
Size: Key man office, $595 a month
Broker: Ed McAfee, Locus Realty Advisors

Mooresville
Buyer: IOMAX, a computer consulting and technology company
Location: Top floor of RiverPark Bulding
Size: 5,500 square feet, corporate headquarters for southeast.
Brokers: Listing agent, Carrie Taylor, ReMax; selling agent, Tami Little of SouthMark Properties

Tenant: Michael York Appraisal Co.
Location: Brawley Commons Shopping Center, 631-504 Brawley School Rd, e
Size: 620 square feet, offices
Brokers: Tom McMahon / Tim Caryl, Sperry Van Ness/McMahon & Associates

Tenant: Short Fry Grill
Location: Parkway Plaza , 694 Brawley School Rd Parkway Plaza Suites B&C
Size: 3,000 square feet, restaurant
Brokers: Tom McMahon / Tim Caryl, Sperry Van Ness/McMahon & Associates

Tenant: Jeff Hammond, retail store
Location: 144 Talbert, in Talbert Point Business Park
Size: 3,800 square feet
Broker: Bill Gaither, Newport Properties Commercial Division