Marty Finley Reporter Louisville Business First
When Steel Technologies Inc. vacated Landis Lakes TowneCenter last year, it was a huge blow for landlord Faulkner Real Estate.
The steel-processing company became the anchor tenant at 700 North Hurstbourne, one of the new office developments at University of Louisville’s ShelbyHurst Office and Research Park.
Steel Technologies vacated about 30,000 square feet at Landis Lakes TowneCenter. The mixed-use development is spread across two two-story buildings totaling more than 86,000 square feet at the intersection of Shelbyville Road and South English Station Road, near the Lake Forest subdivision. The development was constructed over two phases, with the final phase coming in 2007.
Add to mix the loss of Liberty Mutual, which occupied several thousand square feet, and existing vacancies, and Faulkner Real Estate was left with a mixed-use development that was more than half empty.
To be exact, the building was carrying a 57 percent vacancy rate as recently as late fall 2015, said Fred Faulkner, president and CEO of Faulkner Real Estate
“We were really concerned,” he said.
But with a little luck and some aggressiveness in promoting the property to businesses and local real estate brokers, the tides have shifted dramatically in a matter of a few months.
Faulkner said Thursday that the firm has signed four major tenants in the past six months that have filled 41,624 square feet, improviing the occupancy rate at the development to 91 percent.
The largest chunk of space was taken by Baptist Healthcare System Inc., which occupies 24,000 square feet on the second floor in what Faulkner calls the Phase 1 building at Landis Lakes. Most of the space, he said, previously had been held by Steel Technologies.
Baptist Healthcare uses the space for accounts payable and supply chain solutions workers. Evan Tarbis, a leasing specialist for Faulkner Real Estate, said Baptist Healthcare, which moved into the space last month, has about 80 employees there now and could grow to around 120 at its peak.
The entire Landis Lakes TowneCenter development has 200 or more employees now, Tarbis added. The first floors are set aside for retail, and the second floors are used for office space.
Baptist Healthcare is joined in the building by a new restaurant called Gander, an American Grill. Gander is taking about 5,400 square feet on the ground floor and will offer its take on American dishes with the likelihood of a lounge and bar area, Faulkner said.
Having this kind of restaurant in the area should be a huge boost to the development, he said. Landis Lakes also has Wild Eggs and Fiesta Time Amigos Mexican Grill as other restaurant tenants. Gander is still under construction and is shooting for a summer opening, Tarbis said.
In the phase 2 building, Louisville private-equity health care firm Confluent Health LLC is leasing 11,000 square feet on the second floor while Edward Jones Financial Services moved than 1,000 square feet on the first floor. Confluent moved in this month, and Edward Jones came aboard in December.
Confluent Health is using the space as corporate headquarters. The firm formed in late 2014 and focuses on physical and occupational therapy.
Confluent was founded in 2014 by Larry Benz, the founder of Kentucky Orthopedic Rehab Team LLC who sold his interest in that company. We previously reported that Confluent occupied about 2,700 square feet in East Point Business Park for its headquarters.
Faulkner declined to disclose terms of the four leases, all of which were signed on a long-term basis.
“What I can say is we are being competitive” with our lease negotiations, he said.
Baptist Healthcare was represented on its lease by Jeffrey A. Dreher, a broker with Louisville commercial real estate firm Commercial Kentucky. The Gander lease was brokered by Casey Smallwood of Louisville commercial real estate firm NAI Fortis Group, and the Edward D. Jones lease was brokered by Yandell Wood of Louisville commercial real estate firm Harry K. Moore Co. Confluent was not represented by a broker.
Other existing tenants at Landis Lakes include Miracle Ear, Adore Salon, State Farm Insurance, Allergy Partners P.A., The Smocking Shop and Snazzys, a vintage and used clothing store.
Faulkner said that leaves around 8,000 square feet of available space in the development, most of which is retail space that could be occupied by yogurt or coffee shops or small restaurants. The company also owns a 2.2-acre outparcel in the middle of the development that could accommodate a 7,000-square-foot building. Faulkner said he believes that facility would be ideal for multiple tenants, such as a dry cleaner and coffee shop.