Exciting.

Talk to developers and investors who are renovating commercial spaces in the East Village, and that word comes up again and again.   

“It’s probably not a word I would have used five years ago,” said Jake Christiansen, vice president of business development for Nelson Construction Services Inc. The company is working on a $5 million office building renovation and expansion at 430 E. Grand Ave. When it’s completed in July, the three-floor, 50,000-square-foot space will be leased by Iowa Workforce Development.   

The East Village is seeing more activity in construction and new leases for office and retail spaces this spring, with the potential for at least 200 more employees to move into the district by mid-summer. The activity is occurring hand-in-hand with several urban housing projects that are planned for the area.   

Christiansen has been involved with several projects in the East Village for the past four years, said he’s seen a “steady improvement” in the development climate there.   

In several cases, existing downtown businesses have seized the opportunity to move into renovated spaces in the East Village to take advantage of easier parking, lower rents and the chance to be part of what’s increasingly viewed as a hot area of town.   

Within the past three months, the recently renovated 601 E. Locust St. building has added software development firm GCommerce Inc., which will soon be joined by Schaffer’s Bridal & Formal Shop, ENT Clinic of Iowa and Outcomes Pharmaceutical Health Care.   

The ability to customize its space was one of the attractions of the building, said Tom Halterman, Outcome’s chief executive.   

“Looking at the East Village, it had some real advantages,” said Halterman, who will move about 15 employees from the Insurance Exchange Building downtown. “John Burgeson at Iowa State Bank was such a motivated building owner to get people down there, to customize space and make accommodations for parking.”   

Staying in a downtown location was also important to the company, whose employees commute from as far away as Pella and Runnells.   

“Then with all of the stuff that’s going on around downtown, that makes it exciting,” Halterman said. “With all of the renovation projects going on right now in the East Village, that made it easier to decide. Not only was it not a concern to move away from the main part of downtown, it was actually exciting because of all the new development going on there.”   

Though Christiansen believes there are still a number of commercial redevelopment opportunities in the East Village, it will take some time for the present projects to be absorbed by the market. Also, not every project is viable.

His development company, Nelson Development 10 LLC, had had a purchase option on the former Hammer Medical Equipment building at 523 E. Grand Ave., but chose not to exercise it after deciding the potential rental income from the 3,800-square-foot building wouldn’t generate enough cash flow to pay for the needed renovations.

Another East Village building owner, San Francisco-based Glenborough Realty Trust Inc., has plans to renovate its building at 600 E. Court Ave. to make it suitable for smaller tenants. The real estate investment trust plans to install an elevator and corridors in the 17,000-square-foot building so it can accommodate a mix of tenants, in spaces ranging from 1,500 square feet and up.

“There’s really a niche for a lot of those smaller offices, because they want to be close to the Capitol or government offices,” said Keith Steinhoff, Glenborough’s director of leasing. The two-floor building has been vacant since the CMF&Z advertising and public relations firm moved out nearly a year and a half ago.

The other two buildings Glenborough owns nearby, at 400 and 500 E. Court Ave. are already configured for multiple tenants and are completely rented, which made the decision to reconfigure 600 E. Court easier, he said.

The area is stronger now than it has been in the past, Steinhoff said.

“We think what’s different now is involvement from the city in upgrading the area, and there’s a sense of a lot of pride and a real comeback in that area,” he said.

BUILDING SYNERGY

A small coffeehouse and some offices are likely tenants for the now-vacant Capital City Florist building. Bill Wright, a commercial real estate broker for Grubb & Ellis/Mid-America Pacific, is a co-owner in the project with John Burgeson, president of Iowa State Bank.

“We’re hoping to start work in April, and start leasing space in June,” Wright said. The 12,000-square-foot building, located at the southwest corner of East Sixth and Des Moines streets, could accommodate a small restaurant or coffeehouse, with the larger spaces probably leased for offices.

As a broker, Wright has handled a number of lease deals for the East Village recently.

“With the Soho and East Village Square projects, the more people you get working in an area, there’s more demand for the ancillary services that go along with it,” he said. “And the more offices you have in an area, that’s a catalyst for more office development. Granted, they may be smaller-scale, but it’s really going to improve the East Village.”