CRE forum panelists talk about projects, development trends
Dozens of new construction projects are underway in the Greater Des Moines area, ranging from multifamily housing to retail, office and industrial developments.
Seven people affiliated with the commercial real estate sector talked about projects with which their businesses are involved as well as their businesses in general during the Business Record’s annual Commercial Real Estate forum held on April 20.
The following are excerpts of what the panelists said about their projects and businesses.
Michael Anthony, project executive, Opus Group, which is headquartered in Minneapolis and has offices in Clive and six other cities. The company is nearing completion of a speculative industrial building in Swanwood Logistics Center in Ankeny and two buildings in Northridge 80|35 in northeast Des Moines. Anthony talked about the need for speculative industrial space:
“Nationwide, older-generation buildings – those built over 20 years ago – make up 75% of the inventory on the market. In the Des Moines metro, that’s even higher. [In 2015], Opus was one of the first to bring speculative Class A industrial space to the market on our Corporate Woods buildings in Ankeny. …
“Shortly after phase three of our Corporate Woods project was completed and delivered to the market, the 2020 pandemic shattered the old consumer shopping habits and accelerated online shopping, further exasperating the need for industrial space and Class A space. … You see a lot of industrial space being built and a lot of new spaces coming on the market. Currently there’s over 730,000 square feet of preleasing going on in this marketplace. That compares to just zero square feet a year ago. The demand is obviously there.
“The scarcity of land and land prices are driving tenants to secondary and tertiary markets. That’s why we’re seeing so much of the product being built in Des Moines.”
Marquas Ashworth, entrepreneur, distiller and developer. He makes small-batch rye whiskey a Des Moines under the label Ziyad and is developing Center @ Sixth at 1714 Sixth Ave. The project would include affordable apartments, street-level retail and restaurant space, and a nonprofit business incubator. The retail and incubator would be targeted at Black and brown entrepreneurs. Ashworth provided an update on the development and the need it will fill:
“At this point, we’ve secured partners for the incubator. We’re finishing a lot of the design elements. Fundraising has really been a joy, looking at the response from the community. … We are dealing with increased costs due to constraints in the supply chain but we’re working on efficiencies to fit that still within the budget. We’re about 24 months from actual doors opening. …
“When you look at Sixth Avenue and the reputation that comes with it a lot of times, I thought it would be important to put something in the community that the community could use and benefit from … especially when you look at the amount of entrepreneurial, innovation and startups that are happening in and around the area. I wanted to make a space where … Black and brown businesses could be incubated … and create a space that they can not only incubate but leverage for growth and work with the national chains to … upsell their products.”
Matt Brown, president of Formation Group, a building consultant business located in West Des Moines. Brown talked about what went into finding land on which to build new headquarters for West Bank:
“A prerequisite for the [West Bank project] is that they said, ‘Hey, we’re staying in West Des Moines.’ … They had a couple options that we helped them with. They had to keep it on the down-low because they didn’t want anybody to know about it. … They decided that the site south of Valley West Mall was the best fit for them as an organization. You look at that [site] and say, ‘Where do we spin the positive on this?’ because the site just isn’t the most ideal. But for them, it is the best fit.
“It’s a wonderful redevelopment opportunity for the city of West Des Moines. West Bank, in the words of [CEO and President] Dave Nelson, when we take a site that is blighted and we make it into something that’s special, that exudes our commitment to the community.
“When everybody thinks of West Des Moines, you don’t really think about Valley West Mall. We all know it’s there. We all know it’s an opportunity. But we really haven’t thought about what it could become, and this is really that catalyst to make things happen in that area.”
Karl Chambers, CEO and president of Imprint Architects in Ankeny. The group designed the Prairie Trail Sports Complex, now under construction in Ankeny, and the proposed Bombers golf entertainment venue in Johnston. Chambers talked about the increase in sports-related facilities:
“There’s been an increase in sports and entertainment venues. As retail and shopping has moved online into that digital realm, you see this mass consumerism migrating more towards buildings that are designed for user experiences. [The Prairie Trail Sports Complex will have individual buildings designed for specific sports.] There’s just this really big trend now that people are investing a lot of money in their kids’ entertainment and sports, and this is going to be one piece of that in Central Iowa.
“The Bombers [golf entertainment venue] is going to have a rooftop patio with a bar and place [to play] bags. The entire Bomber complex is designed around entertainment – it’s located adjacent to Beaver Creek, and there are plans … to connect to the Central Iowa water trails. … More resources are being put into these entertainment-type facilities [because] people are more focused on experience versus merchandise.”
Adam Petersen, who is president of PDM Precast in Des Moines. The company is building an addition to its facilities in an effort to improve the work environment for employees. Petersen talked about the importance of maintaining a talented workforce, which has grown to about 200 employees from 29 about 10 years ago:
“Experiencing that kind of people growth and then going through the pandemic, you can imagine how hard it is to maintain that labor force and to recruit to it. … What we’ve found is that the ability to get that employee and to keep that employee is as much about the environment that they’re in as it is what you pay them. We became [an employee-owned company] almost three years ago and we’re trying to do everything we can, but it became obvious that we needed to just keep taking that next step and creating a better environment for our employees.
“So that’s why we’re doing [the expansion]. We’re putting more production indoors, not necessarily increasing our throughput. … It’s about getting the best employee we can get. It’s about retaining our employees, and helping them to grow. … Everything we’ve done over the past 10 years in terms of creating space, it’s really been about creating the best environment for our folks.”
Tim Rypma, who is president of Rypma Properties in Des Moines and a member of the Des Moines Urban Design Review Board. He provided an update on the Market District, which is the southern half of Des Moines’ East Village neighborhood, east of the Des Moines River in downtown:
“The Market District [a public-private partnership that includes JSC Properties, MidAmerican Energy and the city of Des Moines] is roughly a 40-acre development; the total land available for development is over 850,000 square feet. What we’re doing is constructing infrastructure for development-ready sites and have offers with incentives for offices, multifamily, retail and hospitality. We’re installing 1.5 acres of new tree cover. …
“Part of that development, with a subgroup I’m working with, is the Central Oil building [at 112 S.E. Fourth St.] The first retail tenant – Twisted Vine – will open June 1. The second floor has two offices. And there’s four apartments [on the third floor]. I like to refer to the building as the first vertical development in the Market District. It’s a historical redevelopment. It’s safe to say that in the next two years you’ll start seeing vertical buildings going up in the Market District as we continue the roadway infrastructure, which we just started again about a month ago.”
Tina Smothers, who is principal of Optimum Real Estate Management in Des Moines. She talked about the conversion of a former extended-stay hotel in Clive into affordable housing:
“From the time the project was introduced to us until the time we closed [in March] was over a year and a half, and a lot of the pricing had changed in that time frame. Even some of the people that we had lined up to do some of the rehab work for us were not able to do so anymore just because of the demand. We are doing the construction management ourselves. We are doing a $1.5 million rehab on it. … With that we are putting in about $5,500 per door. Not so many years ago, we used to do full apartment rehabs for $5,500 which included brand new cabinets, all of the appliances replaced.
“We were lucky with this project that we were able to keep the appliances [that the hotel had recently replaced]. Due to the cost, we had to paint all of the cabinets instead of replacing some of the doors.
“We’re trying to add some amenities like a dog park and dog wash station.”