Ronald Jurgenson, Industrial Specialist, NAI Michael Realty Company

In the Toledo market, companies are locating their distribution operations in close proximity to the Interstate 75/Ohio Turnpike (Interstate 80/Interstate 90) corridor, according to Ronald Jurgenson, industrial specialist with Toledo-based NAI Michael Realty. This location is attractive because the I-80/I-90 corridor runs east to west across the United States and the I-75 corridor runs north to south from Michigan to Florida. The I-75/Ohio Turnpike corridor is within 500 miles of about 50 percent of the U.S. industrial market and within about 50 percent of the Canadian market.

In addition, two major announcements have been made in southern Michigan that affect the supply base for companies in the Toledo area. The development of a major engine plant, which is a joint venture between DaimlerChrysler and Mitsubishi, will be located north of the Ohio border, and a plastic injection molding company, Plasteck, has announced plans to locate a manufacturing facility in the Monroe, Michigan area. “These plants will positively impact the Toledo area because the delivery time that products will make it to these plants from the Toledo area will be approximately 30 minutes, which falls well in line with the concept of just-in-time delivery,” Jurgenson says.

Peter Shawaker, Principal and Investment Division Leader, NAI Michael Realty Company

The majority of the development taking place is in areas that are adjacent to Interstate 475 and I-75 in the southwest and southeast corridors of Toledo. Older industrial areas of the city, which have a significantly higher travel time to major transportation routes, have been overlooked by companies.

“Industrial vacancy rates in the Toledo area are approximately 11 percent,” Jurgenson says. “A good portion of these vacancies are located in the older industrial areas on the south side and north side of Toledo.” However, Jurgenson is optimistic that by year-end 2004, vacancies will be less than 10 percent. “In the newly developed areas, vacancy rates are remaining less than 5 percent, and the overall trend predicts lower vacancy rates in 2004.”

The southwest and southeast corridors of the metro area will continue to see industrial development as the residential population grows. There is vacant land available for development, and projected improvements for the highway infrastructure along these corridors will support the increased traffic flow and development in the future. “Areas such as Maumee, Monclova Township, Perrysburg, Northwood and Oregon are all preferred areas for commercial/industrial development,” Jurgenson says.

Retail activity continues to follow the residential movement beyond the I-475 beltway to mostly suburban townships, according to Peter Shawaker, principal with NAI Michael Realty.

The $53 million Town Center at Levis Commons, located near I-475 and State Route 25 in Perrysburg, is currently under construction. According to Shawaker, the city of Perrysburg assisted with economic and utility work at this site, which was originally developed as an office/industrial park by Owens-Illinois. Larry Dillin, a real estate consultant, has teamed with Charlotte, North Carolina-based Hill Partners to develop the 319,000-square-foot retail project, which broke ground in October 2003 and is scheduled to open in October 2004. The project will include 17 buildings on 35 acres and tenants such as National Amusements, Talbots, Jos. A. Bank and Max & Erma’s.

“Many of the tenants will be new to northwest Ohio, but others will be complementing other nearby locations,” Shawaker says. “This development further creates the Perrysburg area as a second major retail area in metropolitan Toledo, after Westfield Shoppingtown (formerly Franklin Park Mall).” Westfield recently started work on a 278,000-square-foot addition to its more than 1 million-square-foot mall, which will include a relocated and expanded food court.

The major developments currently taking place in the area include Central Avenue in the northwest area of Toledo, with a new Giant Eagle and Lowe’s Home Improvement Warehouse; Navarre Avenue, in suburban Oregon, with a new Wal-Mart and Gorden Foods; and Alexis Road in northern Toledo, with a new Lowe’s Home Improvement Warehouse.

Retail vacancy is hovering around 12 percent, with a large chunk of vacancy still in flux as 39 of Grand Rapids, Michigan-based Spartan Foods’ Food Town stores in metropolitan Toledo closed this summer. Kroger absorbed 13 of the stores, and grocers such as Sav-A-Lot occupied others, according to Shawaker.

“One bright spot in the Toledo area is the investment market,” Shawaker says. “With more demand than supply, low interest rates, a low/fluctuating stock market and many baby boomers with cash to invest for their retirements, low capitalization rates continue to surprise the most experienced of us.”

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