HEARTLAND SNAPSHOT, NOVEMBER 2004

Quad Cities

The majority of commercial development in the Quad Cities (an area consisting of Davenport and Bettendorf, Iowa; and Rock Island and Moline, Illinois, along with smaller surrounding communities) is taking place in the suburban areas of 53rd Street and Interstate 74 in Davenport. This is due to the number of new residential homes being constructed in the area, as well as the ease of access to and from the interstate, according to John Ruhl, vice president and sales manager of NAI Ruhl & Ruhl Commercial.

“The area continues to grow northward due to available land opportunities,” Ruhl says. “The Illinois Quad Cities are seeing activity on the John Deere Road Corridor for retail, though not nearly the activity that Iowa is seeing. This is due to lack of availability and less population growth than the Iowa Quad Cities.”

Duck Creek Shopping Center, which was developed by Chicago-based Daly Group and leased by Ruhl Commercial, has introduced an alternative retail site to the 53rd Street and I-74 corridor. The center is seeing great success in big box retail, out-lots and small inline retail. “They have signed deals in the $24 per square foot range, which has been unheard of in our market to date,” he says. “This might cause retail rates to increase due to these new lease comparables.” The Quad Cities are seeing record land sale prices — $12 to $14 per square foot — in the 53rd Street and Utica Ridge Road area as well. “With the new retail operations opening, we’re seeing expressions of interest by multifamily developers hoping to serve the employees working in the new stores and restaurants.”

In terms of development trends in the Quad Cities, more and more national retailers, large and small, are giving the area some consideration. “This has also drawn the attention of some national developers, such as St. Louis-based THF,” Ruhl says. “We are also seeing a great amount of entrepreneurial–type development by Quad Cities natives wishing to diversify their portfolios from strictly stocks and bonds to include some real estate.”

Active developers in the area include Kaizen, THF, Daly Group, Russell Construction, Ryan Companies and Cedar Development. The Home Depot, MaggieMoo’s, Dillard’s, Starbucks Coffee, Granite City Food and Brewery, Centro and Fuddrucker’s recently entered the Quad Cities market.

Currently, vacancy rates are 10 percent to 15 percent for office, 5 percent to 10 percent for large industrial, and retail is scattered with very little vacant small strip center space. “But, there are large holes in the big box retail segment,” he says.

One submarket to watch is the Brady Street Corridor. This submarket has a new office/flex development coming on line called Brady Street Commons on US Highway 61 near Northpark Mall, as well as other potential developments. “Davenport is watching the area closely and preparing to roll out plans.” Ruhl says. “Also, there is a movement to redevelop the riverfronts in all of the Quad Cities, in which the communities will play a large roll.”

There are numerous bright spots in the Quad Cities real estate market. Medical office development, for example, will be a bright spot in the sluggish office market. “Each of the four downtowns is going through highly organized and well-funded redevelopment processes,” Ruhl says.

Downtown Davenport is in the completion stages of the $113 million redevelopment projects known as River Renaissance. These projects include new office buildings, the new Figge Arts Center, The New Ventures Center and a new skybridge that reaches to the River Front Center.

Downtown Moline has a new urban neighborhood development called Bass Street Landing. Bass Street Landing is an old riverfront industrial area that has been cleared to make room for new office and retail, a Stoney Creek Convention Hotel, and loft and townhouse residential development. The City of Moline is committed to a significant amount of infrastructure including streets, street scape, a park and fountain features. Completion for Bass Street Landing is scheduled for 2005.

Downtown Rock Island is focused on loft style housing to fill a void in the market.

Downtown Bettendorf has announced plans for a new hotel, convention center and three new private developments that are near the Isle of Capri Casino operation.



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