A Q&A with Steve Scott
Senior Vice President at Cushman & Wakefield, Iowa Commercial Advisors
What factors are creating demand for retail businesses and restaurants in Johnston?
Over the past five years, Johnston and its surrounding trade area has seen significant increases in both its residential population and in the number of daytime employees due to the growth of new and existing corporate facilities such as Corteva Agriscience, John Deere Financial, Delta Dental, Rain and Hail Insurance, John Deere Intelligent Solutions Group, and the soon-to-be announced new Iowa Bankers Association offices.
At the same time, the growth in restaurants and retailers has not kept up with this growth, therefore a gap exists that needs to be filled.
What are the pros and cons of leasing an existing space vs. building out a new space?
Most of the advantage of new space lies in the ability to design exactly what the occupant wants and/or needs. Obviously cost is typically a consideration, but the cost of modifying and remodeling existing space can also be substantial. Other considerations are structural obsolescence such as ceiling height, age and efficiency of mechanical systems, ADA compliance issues, adequacy or presence of a grease interceptor, etc. Plus, new space is typically located near the current and future travel patterns of the trade area whereas existing space is often in a location that does not offer prime exposure.
What misconceptions regarding leasing retail or restaurant exist in the marketplace?
There’s a common belief that people will not travel from other areas of the metro to trade or dine in Johnston. However, good quality restaurants in Johnston such as Greenbriar and El Mariachi draw customers from a long distance. Newer establishments, such as Wasabi and Health House, are diversifying the dining options here in Johnston, which is something we hope to see continue.
What retail or restaurant trends do you currently see in the Greater Des Moines metro?
Both categories are struggling to attract workers, and this is leading to caution in expanding. Also, millennials now make up the largest age demographic, and they do not spend as freely as other generations therefore causing additional caution.
How do you predict current retail trends will shift over the next ten years? How will this impact the types of retail space?
More consumer expenditures are shifting toward experiential types of retail and restaurants – think TopGolf, Flix Brewhouse and Cinema, Dave and Busters, or Smash Park. Enclosed malls with large department stores are becoming either challenged or completely irrelevant, mostly because of online shopping.
Retail space will likely focus more on businesses providing personal services that are not impacted by the internet. Demand for large box type retail has lessened dramatically since 2016.