DATE: Tuesday, September 2, 1997            TAG: 9709020119

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MEREDITH COHN, STAFF WRITER 

                                            LENGTH:   67 lines

SMALL-SPACE DEVELOPERS SERVE SMALL BUSINESSES

When it comes to industry, one size does not fit all. A good portion of the warehouses or manufacturing sites in Hampton Roads would be a little roomy for small businesses.

But a handful of developers have found a niche tailoring space to the little guys.

Jerrold L. Miller, who owns a ship-repair business in Portsmouth, bought 102 acres of the mostly undeveloped 165-acre Oceana East Industrial Park in Virginia Beach in December. With an eye on the small manufacturer and distributor, he's put up one building and laid the foundation for two more. He has tentative plans to put up 100,000 square feet of space on various parcels.

``It's for little guys who want to buy their own land or have property developed for them,'' Miller said.

So far, Miller's first 20,000-square-foot multi-tenant building is nearly complete and one company has leased the entire space. He said there have been several telephone inquiries about the others. That's a ``good indication of the interest and need,'' he said.

Oceana East, which lies on London Bridge Road between Oceana Naval Air Station and the city-owned Oceana West Industrial Park, was first developed in the mid-1980s. It has about 30 buildings and 60 to 65 tenants.

William R. Walker, the park's first developer, stopped building by the end of the decade when economic conditions were no longer favorable. Now that banks have money to lend and interest rates are good, Walker's construction company is working with Miller.

But industry observers say Miller has some competition.

Jim Nocito, for example, who has been developing land for 24 years, also has property for small businesses in Oceana East and other Hampton Roads cities. Nocito reports interest in his property has been high lately.

A recent survey of industrial space conducted by Billy King, with Harvey-Lindsay Commercial Real Estate, and the Old Dominion University Real Estate Center, showed the region has a 9.9 percent vacancy rate for industrial space. That has been dropping since 1993 and 1994, when it was 12 percent to 14 percent. The survey, however, did not break out small industrial space.

Still, King said he believes there is not a lot for lease and sale in the smaller sizes.

Sites for small businesses are scattered around Hampton Roads, he said. There are concentrations in Chesapeake's Greenbrier, Norfolk's West Side, and Virginia Beach's Cleveland Street-Newtown Road areas and Oceana-Lynnhaven areas.

``For the 1,000- to 10,000-square-foot sites, the market is tighter than the 15,000 and up ranges, the medium to large sizes, '' he said.

King said he believes there is a market for Miller's space, but said he and the others catering to small businesses probably need to provide buildings with the right ceiling heights, door sizes, office space and parking.

``The smaller renter typically won't pre-lease and wait for a building to go up,'' King said. ``They have a shorter window on moving, like 60 to 90 days.''

Many small business also want short-term leases of 2 years to 5 years so if they need more space they aren't locked into a long-term agreement, King said.

Robert Rahl, a marketing manager for the Virginia Beach Economic Development Department, and the city's economic development director, Donald Maxwell, said they're glad to see developers catering to small businesses. They said 70 percent to 80 percent of growth comes from those companies.

``The activity is there,'' Rahl said. ``If they've got the product.'' ILLUSTRATION: Graphic

Map

Area shown: Oceana East Industrial Park KEYWORDS: INDUSTRIAL PARK

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