By JASON COX
Of the Keizertimes
How has River Road fared during the recession?
The analysis seems to be: OK, but not great.
“My gut feeling is it’s fairing reasonably well compared to a lot of other areas,” said James Hauge of Legacy Real Estate.
Last year about this time the Keizertimes ran a report on retail vacancies on River Road.
Pam Rushing of Coldwell Banker Commercial puts the River Road vacancy rate at about 15 percent. It was at 13.3 percent in the first quarter of 2010.
Since then, there have been small businesses opening here and there, but no new major tenants have located on River Road in the past year.
Rushing thinks Keizer Station has a lot to do with why national retailers are overlooking River Road. The development did well for itself in 2010, snagging Old Navy, Marshalls and Ulta Cosmetics. The latter two will fill the former Wickes Furniture location after the parent company went bankrupt. The empty Circuit City building – also a casualty of a massive bankruptcy filing – is being utilized as an indoor soccer facility by the Keizer Soccer Club.
“Keizer Station is doing better than a year ago,” Rushing said, but she thinks it could be at the expense of River Road.
“I know a lot of people really like Keizer Station and it’s been a good destination for people and it’s nice to have it there, but it’s really hurting River Road,” Rushing said. But she did note “mom and pops” are looking at River Road – “and that’s not necessarily bad.
“Unless they have quite a bit of money, they’re a brand name, they’re not going to be able to afford to go into Keizer Station,” Rushing said.
Both Rushing and Lorene McMurrin of SMI believe River Road is hanging in there with the Lancaster Drive area, but lagging behind Commercial Street SE.
“I think the biggest factor is traffic counts,” McMurrin said. “River Road doesn’t have the same kind of traffic counts as Commercial, and definitely not Lancaster.”
Agents told us last year businesses new to the area often look to either Lancaster or Commercial Street Southeast to put a first location. If all goes well, they may look to the other, like Five Guys Burgers and Fries. The popular restaurant opened on Lancaster Drive last year, and announced a second location on – you guessed it, Commercial Street SE.
“There’s an excellent traffic count (on Commercial) but also higher incomes,” McMurrin said. “The median income is also higher in south Salem than it is on Lancaster.”
Or they might look to “secondary” markets like west Salem or Keizer.
So what are the landlords sitting on empty property doing to get more tenants in the door?
“The landlords that are doing the best and the centers that are the most healthy – the landlords are giving concessions, either a shorter-term lease, less of a lease payment … and sometimes tenant improvements,” Rushing said.
“They will work with a tenant, particularly one with good credit and who would prefer a long-term lease,” McMurrin said. “But that isn’t necessarily happening.”
The fear is risk, particularly from an up-and-coming business without big resources to fall back on.
But Rushing said there were “several sales in 2010 that were significant,” including Bimart’s purchase of a former palm reader’s home, and two complexes in south Keizer.
“As far as leasing, I would say it has improved slightly or stayed the same,” Rushing said.
Keizer has at least one thing going for it: “There’s less population out that way, but it’s a wonderful community and has people that support their community,” McMurrin said.