By: Mike Rhodes—
Muncie, IN—The 6th Annual State of Commercial Real Estate in Delaware County was presented by Coldwell Banker Lunsford on Wednesday, February 22nd at the Ball State Alumni Center.
The annual presentation and panel discussion by local experts typically covers both the national and local economy, employment and real estate activity. The presentations are generally considered to be a good barometer of how Delaware County is doing in those areas.
The presentation began with Dr. Michael Hicks, George and Frances Ball Distinguished Professor and Director of the Center for Business and Economic Research at Ball State.
According to Hicks, “Within any community in the midwest, there are vacant facilities, but as far as retail, Muncie has remained fairly stable for a fairly long time, even in the face of increasing e-commerce activity by consumers. There’s really no robust evidence that we have an overbuild of retail space in Muncie, even though e-commerce is continuing to grow.”
Hicks went on to give an example of how Walmart was effectively combining their e-commerce model with traditional brick-and-mortar retail sales. For example, a Walmart consumer can purchase clothing online — order different sizes, then return the size that does not fit back to the local store. He went on to explain that Amazon liked that model and they are now building and beta-testing brick-and-mortar return stations in some metropolitan statistical areas. (MSAs). “Retail stores may be different in the future, but they are not going away,” Hicks said.
Technology advances in the future could cause problems for Delaware County and many other communities. Hicks quoted an Oxford University study that indicated 50-55% of current jobs in Delaware County could be automatable in the future. You’ve heard of self-driving cars, right? Same kind of thing. Just a few years ago, most of us would have thought it unimaginable a car could drive itself without human intervention.
The same study indicated Indiana has 11 counties that are very exposed to automation of jobs in the future.
Reviewing local real estate activity, Mike Lunsford said, “Our 2016 market activity was the best we’ve seen in recent years. We more than doubled activity over the year before. That’s really positive. Our MLS shows the highest level of activity in the last 5 years.”
“The Downtown Industrial Center had it’s highest occupancy in over 5 yrs. and was 100% occupied for 8 months. Rents are increasing. Both Marsh Warehouses and Brevini Wind became available in 2016. The Borg Warner building was under contract for the majority of 2016, however the purchaser was unable to complete the purchase in late 2016. The Borg Warner building is once again available.”
There was less activity in unit sales than the previous 2-3 years, yet there were announcements of Dellen Ford Moving to Nebo and 332, Fresh Thyme Market and Crew Car Wash near McGalliard and Reserve.
Also, Nebo Commons has prime buildable sites on the market for the first time. (See video below.)
In the Manufacturing and Warehouse sector there was a great deal of activity in 2016.
Lunsford is seeing and expecting more demand from the Indianapolis and Ft. Wayne areas from companies looking for quality space at better prices.
“I believe we’re an especially attractive location because of the favorable business climate, our proximity to major population centers and the very affordable cost of living and doing business in Muncie and Delaware Co.”— Mike Lunsford
Lunsford said, “Downtown is undergoing a transformation. Lots of excitement for investment, residences, and Quality of Place. As a fairly new partner downtown we feel the difference. Walnut Street is great. Madjax is making progress. Elm Street Brewery is expanding the downtown area and is truly a unique and exciting destination. Civic Theater under the direction of Laura Williamson and an active board are planning on starting a $2.5M renovation of the Boyce Block. Plans for the river project are seeing greater interest. The former Sears Building will be redeveloped into retail and residential occupancy. In fact, there is very little for sale downtown.”
Lunsford also indicated there was good activity and not much space available in the Lyndenbrook office area.
In the residential housing market, there is a lack of inventory. This continues to be a major problem. Without any new construction adding to inventory, availability of homes will be a significant challenge in 2017. People coming here to work who cannot find housing they like, will commute from other areas. Lack of inventory here will drive prices higher. In 2016, the average sale price of a home had increased 4-6%. Residential homes with a selling price of $100-$150k, are only on the market an average of 2.1 months. Homes from $250-$300k are only the market an average of 3.6 months.
“Delaware County desperately needs new home construction,” said Lunsford.
The 6th Annual State of Commercial Real Estate presentation was sponsored by: Coldwell Banker Lunsford, MutualBank, Whitinger & Co, Ball State University Center for Business and Economic Research, Pridemark Construction, Jay-Crew, IN Title Company, Rosenbaum & Sons, and Network Property Services.