Almost five months after the $47.5 million Broadway housing building’s doors opened, the retail space on the bottom floor remains nearly empty.
Currently, only one tenant is occupying the ground level of the two-tower, ten-story building, though Dee Wendler, Director of Business Affairs at PSU, says the other vacancies should be filled in the near future.
The University had projected a period of no retail-based revenue, she said, and the University is not losing money on the building in consequence.
"When you bring up a new building like this, you budget for the fact that you’re going to have some down time," Wendler said, "and you build that into your business plan."
Of late, two retailers have signed leases to occupy a section of The Broadway’s ground floor. The first, Great Clips, a national hair salon chain, first opened doors last Saturday and is the only retailer open for business at the building. The second, E.B. Games, has signed their lease as well and is just now starting their build-out process. A Mexican restaurant and an optometrist/vision provider, too, are slated to finalize their respective leases soon.
In addition, the University has received letters of intent for the three remaining spaces and is negotiating with the prospective tenants.
Retail space at The Broadway is leased at about $22-24 dollars per square foot annually, which equates to an annual gross lease income of about $345,000, before operating expenses.
All available retail space is expected to be filled before August of this year.
Wendler said the University’s initial focus was getting the residential and academic facets of the building up and running by September, turning to the commercial phase only recently.
"The main rush was to get the housing open by September, and so they concentrated a lot on the housing itself," said Wendler.
She also said the extended leasing process, working on the different aspects of the leases, may account for the delay in establishing retail tenants.
"Our leases tend to be pretty thick," Wendler said.
"It hasn’t been that long, I mean the building itself got occupancy permits literally right before the students moved in, in September," Wendler said.
According to Wendler, retailers were drawn to the Broadway location from the beginning, due to the large number of students in the building and on campus in general.
"I think what draws retailers to that building is the fact that you do have all the students up above," said Wendler. "It’s going to be one of the major retail units we’ve got."
Neal Hasselblad, manager of Great Clips, observed a steady increase in business since Saturday’s opening.
"It’s slowly picking up," Hasselblad said.
Hasselblad went on to say he expected business to pick up by the time of their grand opening in three weeks.
Opened Sept. 18, 2004, The Broadway provided much-needed housing to students at PSU, as well as the University’s first 24-hour computer laboratory in two years. The building’s residential vacancy was reserved to capacity on the day of commencement, signifying the growing need for student housing on campus.
The Broadway’s top eight stories contain the building’s 383 apartments. Conference and classrooms, a computer lab and some offices make up the second level, while seven retail businesses are slated to occupy the ground level.
PSU owns The Broadway through Broadway Housing L.C.C. Local development goliath Gerding/Edlen Development L.C.C. provided bond financing and construction management for the project.
John Eckman, assistant director of Auxiliary Services at PSU, said he thinks the development of retail businesses will be essential to the ongoing expansion of the university. Especially, he said, as more and more students opt for on-campus housing.
"I think retail is key to this university district continuing to grow," said Eckman.