The Toledo area's vacancy rate for big-box stores will grow in two weeks by 113,000 square feet when the Kmart store at 5956 West Central Ave. closes for good.
The area remains burdened by 11 former Food Town supermarkets vacated three years ago, and a trio of former Farmer Jack and Food Basics stores that closed a year ago.
Local commercial real estate experts had predicted most of those sites would find new tenants easily, given their prime locations.
Now, however, those experts said lease problems have stalled getting new tenants or getting the sites redeveloped.
Kmart has operated the Sylvania Township store site since 1966 and has paid low rent.
The land owner, real estate businessman David Friedman, of Farmington Hills, Mich., tried to get Kmart to give up the lease, and after the chain shuts the store at the end of the month, he will have clear ownership to start anew, said Pete Shawaker, a partner at Michael Realty Co. in Toledo.
Friedman Real Estate Group has begun marketing the site at an asking price of $7 million but also is contacting potential tenants, including car dealers, said agent Brian Mychajluk.
A sale is unlikely but redevelopment is possible, Mr. Shawaker said. He said he expects a deal within two years.
Renting the Food Town spaces has been a problem because the owner of the defunct grocery chain, Spartan Stores Inc. of Grand Rapids, Mich., has leases that generally are inexpensive, Mr. Shawaker said. Spartan wants to re-lease the stores and make money on them, he said.
Mark Zyndorf, a longtime commercial real estate agent and owner of a Maumee site which has a vacant Food Town, said owners like him are being paid rent by Food Town, even though the building is vacant.
New tenants don't want to come if the Spartan lease will expire in a few years, as is often the case, he added.
At the Farmer Jack sites, however, the rents are high and the leases are longer term, the experts said."They are trying to find sub-tenants, but their leases make it harder to lease those sites," Mr. Shawaker said.
Contact Jon Chavez at:
jchavez@theblade.com
or 419-724-6128.
First Published August 18, 2006, 10:09 a.m.
