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| The Arbors on Mallard Creek Road is drawing attention from local service businesses that want to be near Trader Joe’s. |
than business?
At look at local
commercial development
and small business success
It’s no secret
that University City is a hotbed for commercial growth. The availability of buildable land, the proximity to a major university and the strength of the local economy contribute to an influx of new development from local, regional and national interests. Spend a few minutes driving on Prosperity Church Road, Mallard Creek Church Road or Harris Boulevard, and you will see a University City that is changing right before your eyes.
Yet, even as bricks and mortar are laid along busy corridors, there are vacant storefronts in established commercial centers. Is the market oversaturated? If not, why have some businesses that opened within the past year or two closed their doors?
Area draws retail
Lat Purser, chief executive officer of Charlotte-based Lat Purser & Associates Inc., a diversified real estate development and brokerage management firm, said he believes University City is drawing warranted commercial attention that can support new development. “From my perspective, we are seeing everything from large national retailers right down to small local service providers move in to the area,” said Purser. “University City offers a high customer education level, a strong income base and the ability to draw from a greater regional network due to its proximity to highways and major roadways. It is factors like these that make this area attractive to commercial development.”
Purser said the laws of supply and demand are steering businesses toward the newer developments in University City. “There are a whole host of reasons why a business might choose to locate in new commercial developments,” he explained. “It could be that the development of a new residential neighborhood offers opportunities to be the first merchant in a new commercial facility; it could be that a traffic pattern has been changed and reduced the appeal of an existing facility, or perhaps an anchor in a mall that once attracted a large volume of customers has closed its doors, so the remaining businesses are feeling the economic pinch and are beginning to look elsewhere.”
Working close to home
When Patrick Beach, a certified public accountant, and his family moved to Charlotte from New Jersey eight years ago, they chose to live and work in University City. Without an established network of friends and business contacts in Charlotte, Beach saw University City as a prime location to root his financial services business. According to Beach, the area offered an array of business opportunities, as well as convenient personal and professional amenities he required.
Beach, who has clients nationwide and also was building a local client base, initially rented space in a commercial building at David Taylor Drive and Mallard Creek Church Road.
Recently, Beach decided to buy an office. He looked at existing facilities, as well as new development, before buying space in a new commercial building near The Arbors on Mallard Creek Church Road that houses a variety of professionals.
“The time was right for me to move, and I didn’t want to move too far from the area,” he said. “I saw opportunities at The Arbors that were not available elsewhere. While a good portion of my business remains national, I looked for a space that would be convenient and accessible for my local clients, close to retail and a space where the value of my investment would increase.”
According to Ross Annable, interim director of the Ben Craig Center, an incubator for small business start ups, Beach fits the mold of a successful small business owner in University City. “We see that there is a flow of small business into commercial real estate development in this area,” said Annable. “Entrepreneurs will typically set up their businesses in an area close to home. And we see a balance between all types of small business coming into the area in a variety of industries.”
He continued, “I think what makes this area unique is the amount of business that springs up in the area that has ties to the university research process and the professionals that call this area home. Developers are finding ways to offer competitive rental and sales rates that appeal to businesses.”
The Ben Craig Center was formed in 1986 by UNC Charlotte and the private sector with a mission of fostering entrepreneurism in the Charlotte region. The center reports that there are more than 8,000 companies in Mecklenburg County with less than $3 million in sales. Annable said a large number of these small businesses call University City home and maintain ties to UNCC, as well as the Charlotte Research Institute and the University Research Park, as they move through their formative stages.
Challenges not unique to U. City
The economic challenges that University City small business owners face are not unique to the area. According to Purser, “If you look at the restaurant industry as an example, there are many reasons why certain ones fail while others succeed. First, the restaurant industry is fairly easy to enter. In recent years, we have seen people borrow against their house to pay the franchise fee and purchase the equipment needed to operate the business. When the economy changed, these owners began losing money and were unable to make their payments.”
Purser continued, “The pattern of closings you see in University City is not unique. It might be more noticeable here because of an oversupply of space, but it is common in all parts of the city and across the region.”
Annable said poor business planning and bad timing also may contribute to closings. “I believe that small business start-ups tend to be significantly undercapitalized,” he said. “Small business operators are sometimes optimistic people who believe that the market will come running to them. When they find that it takes more time and more money to succeed, they aren’t prepared for the consequences.”
In a down market where supply of retail and commercial is greater than demand, there are steps small businesses must take to endure. “The advice we are sharing with our business clients is to be prepared to hunker down,” said Annable. “It is obvious that we are in a more challenging economic time than we have faced in recent years. The mortgage problems that are spreading through the economy reach down to the individual investor level and, until the situation changes, potential investors will be less likely to invest and more likely to protect their liquidity in the near term. It is more likely that the closings will continue until the market levels.”