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Article originally published in the Wednesday, July 22, 2015 edition of the Fountain Hills Times. By Barb Charzuk, Times Reporter. Reproduced with the permission of the Fountain Hills Times.
A bird’s eye view of vacant commercial space reveals an abundance of empty locations scattered around town from Shea Boulevard to the northeastern boundary.
In reality, the real estate vacancy rates are comparable to nearby communities competing for similar businesses.
Carefree and Cave Creek, where square footage rates are higher, report comparable commercial vacancy rates to Fountain Hills.
Scott Cooper, town economic development specialist, has compiled vacancy rates. The current retail vacancy rate in Fountain Hills is 14.7 percent. The office vacancy rate is 20 percent.
The asking price per square foot in town is $14.66 for retail and $14.55 for office, according to Cooper’s statistics.
In comparison, Carefree/Cave Creek’s office vacancy rate is 22.9 percent. The asking price per square foot there is $16.08.
Retail space is being leased for $18.04 per square foot and the vacancy rate is 12.6 percent.
Arizona is taking longer to emerge from the recession than other sections of the country, observed Cooper.
“We got hit much harder than the rest of the country, so we have a much bigger hole to climb out of,” he said.
“In all honesty, I think Fountain Hills is behind coming out of the recession. I think a lot of our neighboring communities are behind, too.”
Office space in the Shea corridor in Scottsdale runs about 14.7 percent and 16.1 percent in Scottsdale’sAirpark, said Cooper.
He attributes much of the empty commercial space to the absence of a “critical mass of people…the population centers aren’t there” for many nationally known businesses to operate here.
“We’re not going to bring in 1,000 employees from Microsoft or Apple. “It’s not that we don’t want to but we physically don’t have the space,” said Cooper.
Furthermore, ever since the Great Recession, small businesses have been tightening expenses to survive. Consumers’ shopping habits also have changed.
“America is so over-retailed it’s unbelievable,” commented Cooper. “Online shopping is changing the landscape drastically. The need for brick and mortar stores has dwindled.”
Retail companies consider several project perimeters, such as income demographics, traffic counts and workforce availability, before ever considering opening a business.
“That’s where a community of our size bordering Scottsdale can’t compete with national businesses’ radius requirements,” said Cooper.
Cooper measures economic development success in small, forward steps.
In the last 12 months, economic development initiatives have infused $2.5 million in capital investments and brought 60 new jobs to town, he said.The Tractor Supply Co. created five full-time and five part-time jobs in its new store. Mayo Clinic’s decision to relocate 40 to 50 information technology employees at a former clinic increased downtown lunch business.
Southwest Kidney Institute will bring six to nine employees this fall to work in a dialysis clinic.
Another couple positions were created when Kewpie Egg opened an office.
“So, it’s been pretty good, I think,” said Cooper.