By Luke Geiver, for SiouxFalls.Business

Mark Fiechtner was cruising on his Harley past a cornfield south of Sioux Falls when a for sale sign flopping in the breeze caught his eye.

Minutes later, it changed his commercial career trajectory forever.

Fiechtner bought the cornfield over the phone that day in the summer of 2019, his Harley parked on the shoulder. He knew then what so many commercial entities using his commercial contractor shops know now: It was a perfect location to build.

In less than three years, Fiechtner has built more than 160 commercial contractor shops. He has expanded his shop-style spaces into Milbank, Watertown, multiple locations in Minnesota and in or around Sioux Falls.

“As fast as I can build them, tenants lease them out,” said Fiechtner, now a commercial real estate broker with Dynamic Realty and a long-time general contractor.

People from as far away as New York to Kentucky call him on a regular basis to learn how he does it, from building specs to navigating the supply chain and sometimes just to ask why he chose to build so many shops, he said.

Why does he do it?

He laughs, as if a quick drive around Harrisburg and southern Sioux Falls, where he has more than 110 units with practically no vacancy, wasn’t a clear answer that the demand for commercial contractor shops is on fire. 

Making shops possible

Since his first commercial shop was built in Sioux Falls, Fiechtner hasn’t changed anything in his design. The spaces are all the same two colors of gray and feature 30-foot-by-60-foot bays, or 1,800 square feet, with radiant heat, tall overhead doors, a restroom, a floor drain and most importantly a flexible space that allows small to midsized businesses to pursue a variety of work.

Other builders offer similar shops. Some provide a walled office, access to a lobby or mezzanine storage space built as a second level.

“They lease because they are relatively affordable,” said Marcus Mahlen, a commercial broker with NAI Sioux Falls.

“A lot of the businesses that use them have startup costs or equipment costs. They have to choose between buying land and building a commercial space for what they need or leasing.”

The beauty of the spaces, and the direct correlation to why they are so popular for so many entities, is linked to today’s modern business climate, Mahlen said.

“If my wife and I want to book a photographer for a family photo, we don’t necessarily drive around town looking for storefronts that offer photography services. We research on the internet, using Facebook or Google,” he said. “So many businesses now don’t have to rely on the traditional heavy-traffic storefront location as part of the investment plan in their business model.” 

When Amanda Stegmaier decided she wanted to open a furniture and home store in Sioux Falls, the Las Vegas native was disappointed in the commercial space opportunities. In the heart of the city, spaces were hard to come by and mainly were priced above her startup budget, which required using capital to buy inventory.  

Driving north of Interstate 90 near Brandon, she noticed a for lease sign on a large commercial shop. 

Today, she runs a unique furniture and home goods business, Hausmood Interiors, out of that commercial contractor shop. According to Stegmaier, when or even if she opens a larger space in another location complete with more inventory, she still would keep the space she is in now. There is a uniqueness to it, a mood of newness and opportunity it creates, she said.

Hausmood’s niche is in offering pieces that are higher end or hard to find in this region, aimed at both home designers and individual consumers. She said her prices are marked at roughly 30 percent off retail, and she keeps regular business hours.

“We aren’t a typical furniture company,” she said. “I’ve had all types of buyers from designers and everything in between say they walk in here and they always find treasures.”

In addition to interior furniture, she sources tiles, bathtubs, rugs, headboards and other home furnishings.

“I really just like pretty things,” she said, laughing, “even if I forget sometimes I need to sell things.” 

On the logistics side of her business, Stegmaier said she is happy with her choice to go the contractor shop route. The 52-foot semis she uses for furniture delivery need the tall load-in doors that come with space. On the aesthetic side of her business, she has used the warehouse-type feel to her advantage. Buyers in all price ranges enjoy walking the space, looking at pieces they aren’t used to seeing at larger furniture complexes, she said.

While a more traditional furniture gallery might be in her future, for now the commercial contractor shop has allowed her to launch.

Fiechtner said his shops are fully occupied, with a waiting list. Some clients drive from Sioux City to work in their shop near Harrisburg.

There are a few things holding Fiechtner from building more units or Mahlen from helping businesses find their new home in one, though.

When Fiechtner first started building, the all-in cost for a bank of units was roughly $1.5 million. Today, because of the rising cost of materials, he said it has climbed to $2.5 million. What used to take roughly 120 days to build now takes closer to six months. Waiting for random building materials such as springs to hoist the overhead doors is an everyday occurrence now. It is not a matter of if the build-out process will incur delays or sourcing challenges but when, he said. 

The cold climate adds to the demand, as does the ability to lease, Fiechtner said.

He and Mahlen said they’ve seen everything from a boutique to a welder use the spaces.

“We are building them as fast as we can build them,” Fiechtner said. “They are filling up as fast as they go up.”