co-owner of LMS Commercial Real Estate
Q: How are your real estate clients' needs different today than they were 20 years ago?
A: Twenty years ago, a lot of retailers utilized brokers to go out and select sites for them because there wasn't digital media. Computers weren't quite as fancy as they are today.
There was no Google Earth, so we used to have to hire aerial photographers to go take aerials of certain locations so that we could help do some site selection for them. Honestly, 20 years ago, cellphones were just coming into being. You had a little bit more time to prepare for meetings because now everything is very immediate. We did a lot more research for them and presented things in a much different fashion than how we do today.
What factors make a municipality attractive to a grocery store or drugstore when that business is starting the process of site acquisition?
The speed of the approval process, what the municipality has done, what its history has been. Lots of people with incomes that are sustainable for new stores to come in.
They like to be surrounded by, obviously, a lot of households and other retail with a good road network.
How did the recent economic downturn affect the commercial real estate market in central Pennsylvania?
Well, what happened was there wasn't a whole lot of new development, so existing shopping centers really filled a lot of their vacancies. We saw our (occupancy) go from 92 percent up to 98 percent, so we had filled most of our spaces because there just weren't a lot of different choices for the retailers to make. The demand was much higher than what was available in the marketplace, so a lot of landlords were able to capitalize on that.
How does LMS's approach to redevelopment of a property differ from development of vacant land?
Developing vacant land in Pennsylvania is a very time-consuming process. Once you identify a site for a retailer, it typically can take anywhere from 18 months to two years before you're able to put a shovel in the ground. There are lots of approvals you have to go through with DEP, with the municipalities and with PennDOT.
We bought the Queensgate Shopping Center and the South Hanover Shopping Center in York County within the past four or five years. They were already existing, so all we had to do was live within the footprints that were there, redesign the buildings and reconstruct where the old buildings used to be. It's a much quicker process and not nearly as time-consuming or expensive.
You and your brother, Joe, own retail centers, medical office buildings and rental town home communities. What characteristics do you think make a property a good investment?
Being able to have equity in the deal (and) having good, solid tenants with long-term leases that are well located so that if your tenants ever move out, you have the ability to replace them.
In addition to Pennsylvania, you are licensed in Delaware and Maryland. How do those real estate markets compare to Pennsylvania's?
We haven't done business in Delaware in a few years, but we still have our licenses active. In Maryland, we own some CVS (pharmacies), and we had done a CVS expansion program for them about 15 years ago.
Central Pennsylvania did not get as hard hit as some other areas did, because we live in a very conservative community and we have good planning. Municipalities have done a really good job identifying areas that were good for development. We're just well insulated. People are conservative, and they don't like to overspend on properties, so we don't have a lot of big boxes that are moving out. We didn't cannibalize grocery stores.
There is an awful lot of land zoned commercial, so it wasn't (like) townships went and rezoned things to bring in new national tenants. They did a really good job planning.
About Donna Deerin-Ward
Raised in York County, Donna Deerin-Ward obtained her real estate license while a student at Penn State. She and her husband, Chad, live in York County beside the Susquehanna River.
Deerin-Ward has two grown children, a stepson who is a junior in high school, and a Bouvier des Flandres named Ollie. She enjoys painting, running, swimming and yoga.