Tim Reamer – Cottonwood | Commercial – Harrisonburg Va Commercial Real Estate

June 30, 2015  |   No Comments Yet

Next month a group of officials is expected to gather to cut a ribbon in celebration of the opening of 6.1 miles of pavement. The Southeast Connector creates a link among every commercial corridor from Route 42 to Spotswood Trail and currently stands as a largely overlooked and underestimated infrastructure change. In reality, the celebration is well deserved, because it is a lot more than just a new road; it likely represents the next stage in growth and development and will help shape the future landscape of the Harrisonburg metro area.

By now you’ve undoubtedly noticed the SE Connector punching out onto Route 33 and probably even driven on the balance of the finished project. If so, you know at its closest point, the SE Connector is a few miles away from the heart of East Market Street, which is Harrisonburg’s primary commercial corridor. A distance that currently represents an eternity for retailers and site selectors—and this is an important point.
 

As a matter of context, E. Market Street, specifically the section between Interstate 81 Exit 247 and University Boulevard, has been the primary target for national retail and restaurants. Any business that required the highest visibility and was willing to pay for it (nearly $1 million per acre on average), scouted out locations on this small stretch of road. After all, the road is surrounded by other national retailers, an interstate interchange, with excellent population in close proximity and produces 30,000 cars per day. As it stands, few opportunities remain for redevelopment in this area and currently roads like Reservoir and University have been the recipients of the spillover.

As favorable as it may be, the point of referencing E. Market Street isn’t for the purpose of making a comparison to the SE Connector. Rather, it is to suggest that from a commercial perspective, the perception that retail development should be limited to one corridor in Harrisonburg is like owning a Ferrari with a brick mounted under the gas pedal. Some restraint is good, but only allowing it to go 25mph is a frustrating waste of resources. As a regional hub, commercial demand in Harrisonburg is high, but the opportunity for new development has been relatively low…until now.

The SE Connector effectively serves to connect commercial areas, lessen scarcity, and permit new development opportunity. More specifically:

1. It Stretches Current Corridors

Retail follows population centers (whether residential or employment) and the easiest way to understand where people are moving throughout the day is by traffic counts. As it stands now, both E. Market Street and Port Republic Road have strong traffic counts that fade slightly as traffic moves further from commercial development. But, what if they didn’t fade? What if there was a major road and new commercial development that also attracted traffic at the other end? It would be reasonable to assume that traffic counts would remain relatively steady, and over time, possibly even increase allowing retailers to expand the search parameters beyond a small stretch of E. Market Street.

2. It Creates a New and Needed Corridor

The SE Connector is already attracting national retailers because it neighbors a regional hospital, is connected to every primary commercial corridor, is closer to an affluent and higher density population, and is expected to produce significant traffic counts. The average price per acre is a couple hundred thousand dollars less than E. Market Street for available pad ready land, which also helps an already pretty compelling case. More importantly, the SE Connector and associated developments reflect a residential pattern that changed a while ago.

Over the last decade and a half, residential development has been largely concentrated in one area. Student housing, townhomes occupied by young professionals, and a wide variety of single family residential ranging from middle income to upscale options have all been constructed in large numbers on the east side of Harrisonburg. This area represents the highest percentage of population growth in one of the fastest growing cities (on a percentage basis) in the Commonwealth of Virginia. While residential development has slowed over the last several years, it is not unreasonable to expect the east side of Harrisonburg, which includes developments ready to resume, in addition to raw land along Port Republic Road, will be the preferred area once new housing construction begins again in earnest.

Think of connectivity before social media—fan or not, you have to admit more information and more conversation is occurring everyday as a result. The value and content of the conversation may be questionable for some, but the results are clear. It’s not a stretch to think of the SE Connector as having a similar effect. Without question, the new road will serve to shorten drive-times, which in turn will serve to connect neighborhoods to areas and businesses to which they may not have previously been connected. We all have limitations on how far we’ll drive to get to a business—many prefer the Dayton Wal-Mart to the Harrisonburg Crossing version, but as a matter of convenience, many on the east side select the closer location. No longer.

3. It Allows the Market to Capture Some of What It Should Have.

Early traffic studies estimate 31,100 cars will travel the SE Connector daily after some commercial development—making it the most heavily traveled road in Harrisonburg and one of the highest traffic counts in the Shenandoah Valley. National restaurants and retail will likely take notice (and some already have), especially at the junctures already producing high traffic counts like Port Republic Road and Spotswood Trail. Development plans are already taking shape, the largest of which is the 105-acre Stone Port development (Neighborhood Market, Bojangles, Wendy’s), but others like Preston Lake and Coffman’s Corner are currently in various stages of development. In essence, if you want some of the brands you’ve been wishing for (Aldi, Carrabbas, Chuck E. Cheese’s, and you know the others) you should be thrilled about the SE Connector.

The completion of the SE Connector is likely to represent more than just a cost effective alternative for local and national businesses—it is more likely to signify a shift in the path of progress for commercial development in the region for a few reasons. First, commercial development follows residential development, and the east side of Harrisonburg has been the primary source of residential development for a decade. Additionally, space on traditional retail corridors (E. Market, Reservoir) is limited and prices reflect this fact. Lastly, much of the development on the Southeast Connector will meet or exceed retailer’s standards previously only found in the E. Market Street area, but land is at a lower price point (for now). As larger retailers recognize this opportunity, others are likely to follow.

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