The Business Record’s annual Commercial Real Estate Forum, held on April 25 at the Hilton Des Moines Downtown hotel, attracted over 420 people, who listened to panelists discuss topics ranging from the health of downtown Des Moines and development in Dallas County to the office and industrial markets.

Panelists included Jesse Bunney, director of operations, Lawmark Capital; Chris Costa, president and CEO, Knapp Properties; Craig Erickson, managing director, Shive-Hattery Inc.; Carrie Kruse, interim economic development administrator, city of Des Moines; Rachel Wacker, executive director, Greater Dallas County Development Alliance; and Ryan Wiederstein, broker/owner, WB Realty.

Panelists were asked to describe the current state of the commercial real estate sector in Central Iowa. Below are their answers (edited for length and clarity).

Bunney: “I think the word I would use is ‘frothy.’ We’re just trying to figure out new trends. We’re trying to decide what company is going to bring people back to work at what capacity; everybody is looking at the micro divisions within their companies of what’s best for them. So being reactionary to that, we have to decide what services we provide and how do we change the way we work to better accommodate the downtown users.”

Costa: “There’s some interesting dynamics at play. Central Iowa’s unemployment is low – 2.9%. That’s a positive. Des Moines continues to outpace other Midwestern cities in its growth. … Three percent over three years. Most other Midwestern communities are losing people. So that helps. … We have to continue to create households, delivering them at a price that [is affordable]. … [Regarding office space,] if it’s less than 20,000 square feet of available space – we have a lot of activity. Now, we’re not landing them all, obviously. But when the phone stops ringing, that’s when you start worrying, and we’re not seeing that problem in the smaller spaces. Bigger spaces are a challenge. The unemployment rate is one thing that does hold things back. If you have new employers looking to come to this community, they have to be looking around wondering where they’re going to hire future employees.

Erickson: “We see [the commercial real estate sector] as segmented and specific. There are areas within the commercial world that are doing great and then there are [areas] that struggle. And that requires some creativity and helping connect people. … A lot of the large office [and] large retail that is still empty, it’s going to require a lot of deal-making; it’s going to require a lot of creativity to fill these spaces. We’re trying to help connect our clients – on the financing side, the development side, the user side – to try to make more of those things happen. [The market is] still strong enough, but it can get better. [Central Iowa] has tended to float above the overall market, so we’re optimistic, but we also understand that we have to focus in very specific markets to be successful.”

Kruse: “I would describe the state of the commercial market as active and also evolving. We’re certainly not immune to the post-pandemic challenges that many cities across the nation are facing. But with that, I also want to point out on the activity side, we’re seeing really strong activity on the permitting side in the city of Des Moines. In the first quarter for commercial and multifamily permitting volume, we’re outpacing first quarter activity this year compared to all of the last seven years. Really positive trends that we’re seeing and we hope to continue seeing.”

Wacker: I’m noticing a lot of the folks that we’re working with really appreciating amenities that some of our commercial real estate is offering. I think that that will continue to make them competitive as we look at commercial prospects that are coming in. On the industrial side, we have not seen a shortage of interest in land in the region. Certainly, West Des Moines, Waukee, Clive, Urbandale, Grimes – they are killing it on the commercial real estate side and in the professional service industry. Once you get out into the western part of [Dallas] County, it’s a lot of industrial and agricultural yet, and we do see a lot of interest in the sites that are available for development.”

Wiederstein: “There’s a lot of volatility [in the commercial real estate market] and there’s also a lot of bright spots. As a commercial real estate investor, we’re really focused on finding the right projects, in the right areas, and being very selective. Not trying to find projects for the sake of having projects. The interest rate environment is what it’s going to be and usually works itself out. … There’s probably a better chance that rates go up than go down. Banks could start loosening things up a little bit in 2025. We’re already seeing banks out there trying to grab customers, trying to gain some market share that they didn’t have before, which was a great opportunity for the lenders. Other than that, I’m optimistic about the market. It’s the things you don’t know that you have to look out for. We’ve got our eyes wide open on those deals.”

Watch the full video: The Business Record’s annual Commercial Real Estate Forum was held April 25, featuring a panel of real estate professionals who discussed current and planned projects in the Greater Des Moines area. Panelists also discussed the health of downtown Des Moines and economic trends for the real estate industry. Additionally, Justin Lossner, was recognized as the 2024 Iowa State University Ivy College of Business Commercial Real Estate Professional of the Year.