Knapp Properties Inc. President and CEO Gerry Neugent might be the inaugural CRE Professional of the Year award winner, but that doesn’t mean he can’t admire another developer’s handiwork.

 

Neugent has taken a keen liking to Blackbird Investment’s Market One redevelopment on Southeast Third Street. As luck would have it, he was sitting next to Blackbird’s Justin Doyle when he said, “it’s really a terrific project. Call me if you want to rent space.”

 

Doyle and Neugent joined Hubbell Realty Co. President and CEO Rick Tollakson and R&R Realty Group President Mark Rupprecht this morning for the Business Record’s 2015 Commercial Real Estate Trends and Issues Forum at the Hilton Garden Inn in Urbandale.

 

Doyle’s Modus Engineering Ltd. masterminded the Market One project and now has its offices in the historic warehouse that stands to be the state’s first office building that will consume no more energy than it uses.

 

For his part, Doyle commented that the joint effort of Hy-Vee Inc. and Knapp Properties to develop a grocery store and apartment complex in downtown Des Moines was a “game changer.”

 

No doubt about it, there was plenty of developer camaraderie on display at the event, which covered topics ranging from the benefits and risks of the flow of outside capital into Greater Des Moines to dream projects and other “game changers.”

 

The discussion was moderated by Ben Bruns, business development director at The Weitz Co.

 

To prove that the best questions at these events come from the audience and not the gaggle of reporters on hand, the question that Doyle and Neugent responded to came from an audience member who wanted to know what projects the panel admired the most, but were not connected with.

 

Rupprecht is a fan of the proposed 330-room convention center hotel that is inching its way toward reality near the Iowa Events Center.

 

It became apparent during the event that Tollakson is an admirer or corridors, and he pointed out that the Fifth Avenue corridor from the proposed convention hotel to the Wellmark YMCA to the Hy-Vee and the spur of Walnut Street that will be developed as part of the city’s Iowa Convention & Entertainment Reinvestment District will spur retail development.

 

When the panel was asked about dream projects they would like to see if money were no object, the group offered up a number of big ideas.

 

Tollakson would like to see a high-rise condominium to fill a missing gap in the downtown luxury residential market.

 

On the other hand, “I don’t the believe the city would have enough incentives to make it happen,” he said.

 

It should be pointed out here that one frequently discussed location for such a project is the vacant Riverfront Y at 101 Locust St., where crews are removing asbestos in preparation for the structure’s demolition this summer.

 

Back to dreaming, Neugent said he expects the planned Kum & Go LC headquarters along Grand Avenue in the Western Gateway to be an architectural wonder. The company has hired international architect Renzo Piano as the lead designer.
 

As an aside, Neugent joked to the audiences amusement, that unlike some other dream projects, money really did appear to be no object for the Kum & Go building.

 

Here are some additional takeaways I gleaned from today’s event:

 

Airport terminal needed

The proposed 14-gate, $420 million terminal for the Des Moines International Airport is the “most important economic development project” in the coming years, Neugent said. That sentiment was shared by the panel.

 

Cities need to rethink planning and zoning

It seems that those of us who use property to live, work, shop and play want easy access to the array of commercial property types. If we aren’t near them, we need an efficient transit system to take us to them.

 

Regional planning

A recurrent theme was the need for joint cooperation on everything from transportation to the delivery of safe drinking water to urban planning. “We need to do it, we have to do it,” Tollakson said. He noted there has been progress, “but we have a long way to go.”

 

Drop the cookie cutter in the trash

The days of building the same product type over and over and over again are, well, over. For offices, Rupprecht pointed to the changes in design brought by technology, including the downsizing of workspaces. Doyle, pointing out that his age put him closer to millennials than other members of the panel, said that at one time college graduates had low expectations for the living quarters, having just moved out of concrete dorms that were basically designed to be “hosed down” for easy cleaning. Now, dormitories are posh, and renters expect unique designs and a broad range of amenities including pools, yoga studios and yes, even open bars. “I have found that since I’ve lived downtown, younger people can live next to older people,” Tollakson joked. He also advised that times are changing and that “everything has to be different; everything has to be unique.”

 

Outside money

There is little doubt that Greater Des Moines is getting a lot of national attention. Heck, even The New York Times will spare a few thousand words to write about us, and that attention, combined with an economy that generates steady returns on investment, is attracting national and international investment. All of that attention can make us feel warm and fuzzy, but it also means some investors will chase projects that local developers might consider too risky for the area. Some of that money is building large apartment projects, say in the 300 unit or more range, that are having difficulty finding renters, especially in the areas near Jordan Creek Town Center. Here’s a story I wrote last fall about interest from out of state investors: click here.

 

More about money

Interest rates are low. That means if you have capital to deploy, deploy it now and lock it in for the long term. If you have property to sell, think about unloading it in the next six months, said Tollakson.