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Commercial real estate, development regaining footing in Bulloch, Boro
Todd Manack Web
Todd Manack, a commercial real estate broker in Statesboro, expects commercial development to pick up slowly in the area. - photo by JAMES HEALY/staff
      Commercial real estate development across the country is at a virtual standstill as financial institutions and real estate developers sort through the last several months of a trying national economy and plummeting real estate values.
       Local realtor Todd Manack is one of the leading commercial real estate brokers in this area, and someone who has been instrumental  in putting together several of the large commercial real estate sales transacted in Bulloch County in the last few years including the land sale which resulted in the development of Statesboro Crossing. Manack said there is a reality that has set in.
       "My gut tells me that the commercial development business as well as the commercial rental business is a fair amount softer than where we were three years ago," Manack said. "Up until this last year, and going back for a good while, developers had little trouble showing enough savvy to convince lenders to finance projects. Now, with the troubled financial markets, most banks are not interested at all in some types of deals, or, they are requiring a good bit of money down or other additional security to finance a development."
       Manack said the difficulties facing developers are also affecting those who would lease space from the developers.
       "Once a development is built, on the leasing side, the same financing woes are now true," he said. "A year ago, a mom and pop shop or even corporate franchise businesses needed little more than a good idea to receive financing. Now, the good idea is still important, but so is making the lenders feel secure they are safe in their loan commitments."
       Even though interest by outside developers in Statesboro may have waned significantly, it hasn't totally dried up.
       "We are still getting calls from developers interested in this area," said Peggy Chapman, director of the Development Authority of Bulloch County and president of the Statesboro-Bulloch County Chamber of Commerce. "Clearly, they are not coming in at the rate they were at the height of the boom, but we are still getting them. It's almost as if people are preparing for when the economy comes back, not if it comes back."
       Some local developers have been able to keep their lease rates consistent with where they were a year ago.
       "My per square foot lease rate has remained in the mid teens since I built the first phase of the Market District Center going on three years ago," said local commercial real estate developer Leonard Blount. "I haven't had to lower the rate, but the rate at which we are leasing has slowed down. However, it is steady, and I feel like phase two will be leased out in the near future."
       Manack said his sense of it is that commercial centers large and small are looking for deals.
       "Despite their usual lease rates, deals are being done at individually negotiated prices that are attractive," he said. "Lease rates in small centers depending on age and quality of the center range between $10-15 per square foot per year. Additionally there are fees that cover things like parking lot lighting for safety concerns and trash pick up that will add around $2 per square foot per year. Larger centers, usually because of solid anchors and volumes of traffic can demand a higher price per square foot at around $18 to $22.   Likewise their add-ons are higher as well approaching $3-5 per square foot per year."
       Manack admits he like others fell prey to the seemingly never-ending boom in commercial real estate here and across the county.
       "Years ago everyone, including myself, was blinded by the fact that very little wrong could be done in the real estate sector," he said. "Anything worked. Now that major losses have occurred in the financial lending markets things are different. Lending policy, for better or worse has swung back the other way. If I were a lender I would certainly be healing the regulations that caused my balance sheet to catch the flu. Because most real estate deals are financed with outside financial resources, real estate sales and leasing will improve as does lenders ability to feel secure they are making good solid loans."
       As for Blount, he is looking to add to his commercial development. "Once I have leased out phase two, I will make plans for building phase three," he said. "Interest has picked up, and I am very encouraged."
       Manack said the new reality is not necessarily a bad one in the long term. "It's hard to admit, but this correction in the market will make us more healthy," he said. "Statesboro, though we have been hurt, the hurt has not cut as deeply as in a lot of markets."