Commercial value

The total value of commercial real estate in Cape Girardeau County is about $740 million, according to final figures from the biennial reassessment required by state law.

Five of the top 10 valued commercial properties are related to manufacturing, according to county figures, with parcels at the Procter & Gamble plant on Highway 177 taking two of the top five spots. But the numbers don't include what is perhaps the most valuable property of all -- the Procter & Gamble expansion that was financed with county industrial development bonds and is being paid off over 30 years by the home products company.

"The stuff we have on that plant is basically for the old part of the plant only," said Roger Arnzen, director of mapping and appraisal for the Cape Girardeau County Assessor's Office.

The county approved a $163 million bond deal for the expansion in 2003. One caveat of the deal was that the property would be listed as owned by the county, with a portion being switched to Procter & Gamble's ownership as each payment is made.

The two Procter & Gamble properties on the list have a combined value of $30.9 million.

Commercial property is assessed at 32 percent of its appraised value for tax purposes. The assessed value of all commercial property in the county -- excluding railroad and utility properties that are assessed separately by the state -- is $238.2 million. That represents an increase of about 6.4 percent over the previously listed values. Apartments are taxed as residential property and therefore not included in the commercial category, which covers retail, office, warehouse and factory properties.

The most valuable retail property is the West Park Mall, coming in at third overall on the list with an appraised value of just under $18 million. Retail values are tricky, Arnzen said, because they can be based on the costs to replace the buildings and sales of similar properties.

"But the most accurate way is what kind of income will that property produce if it is going to be rented or leased," Arnzen said. "For commercial properties, that is the most accurate way of determining it."

The commercial real estate market, like the residential market, is softer now than it was two years ago, said Tom Meyer of Exit Realty.

"The market is adjusting just because of a lot of economic change out there," Meyer said. "People are very conservative in this area."

In his personal business, Meyer said he has been more successful lately in pursuing commercial property ventures where there are tax benefits such as historic renovation tax credits available to the owner. "On the other hand, I have got some office buildings for sale that have been on a slow down," he said. "People are in a mixed mode right now of deciding whether to buy an existing site or invest in new construction."

With the slowdown in construction in the housing market, Meyer said he sees a likelihood that contractors who usually concentrate on residential construction will attempt to move into the commercial market in order to keep their crews working.

But with commercial construction costing about twice as much to complete as residential construction and a lack of experience, it will be difficult, he said.

When selling existing properties, Meyer said, the size and purpose of the building plays a large role in the time it takes to find a buyer.

A good-sized commercial office property will be about 3,000 to 4,000 square feet, combination office and warehouse will be 5,000 to 10,000 square feet and warehouse property generally needs a building of 10,000 to 15,000 square feet. Larger buildings, which are generally older, are harder to move because standards for storing products in warehouses have changed from large inventories to smaller, more flexible operations, he said.

"Industrial properties can take two to three years to sell," Meyer said. "I can get quicker turnaround on a 5,000-to-10,000-square-foot office and warehouse, which can sell in three to four months."

The market should pick up later this year, Meyer said. "Into the fall and winter months, I am looking at existing commercial property to be a little more attractive."

rkeller@semisosurian.com

335-6611, extension 126

---

Ranking area properties

The most valuable commercial properties in Cape Girardeau County, as appraised by the county assessor's office, include manufacturing, retail and hotel properties. They are, in order of appraised value:

Procter & Gamble Paper Products, 14484 Highway 177, $18.34 million

Lone Star Industries Inc., 2524/2701 S. Sprigg St., $18.22 million

Centro West Park LLC, 134 West Park Mall, $17.98 million

Procter & Gamble Paper Products, Route V, $12.55 million

Nordenia USA Inc., 14591 Highway 177, $10.70 million

Ace of Cape Girardeau LLC, 840 Mount Auburn Road, $8.38 million

Lee Rowan Co. (Rubbermaid), 1901 Lee Ave., $7.42 million

Wal-Mart Real Estate, 3439 William St., $6.22 million

Sears Roebuck & Co., 330 Siemers Drive, $6.22 million

MidAmerica Hotels Corp. (Holiday Inn), 3253 William St., $5.92 million

Source: Cape Girardeau County Assessor's Office.