Toyota dealership expanding to vacant RoomStore property
The owner of Durham’s Toyota dealership is planning to sell used cars on the property across the road that previously housed a RoomStore furniture store.
The furniture store, which was on Durham-Chapel Hill Boulevard across from Mark Jacobson Toyota, closed last year after the Richmond-based furniture retailer filed for bankruptcy.
Mark Jacobson, the owner of the Toyota dealership in Durham, said he’s planning to convert the furniture store into a used car showroom that will have standard used vehicles for sale, as well as some classic and luxury cars.
The move will also make additional room for new Toyota vehicles, he said.
“We’re seeing that with the economy slowly improving, Mr. Jacobson’s pretty bullish on the future, and he, apparently, had a good opportunity with the property across the street,” said Frank Barnett, used car manger for Mark Jacobson Toyota.
According to property records, Alton Motors LLC bought the former RoomStore property in December for $2.95 million. Jacobson said that’s the name of the company that owns the business’ real estate.
“RoomStore went bankrupt nationwide, and so we had a vacant building,” said Troy Gordon, property manager at Mark Properties, which sold the property. “We basically put it up for lease or sale, and ended up with a sale. It’s the best deal for us.”
Plans were “just submitted” to Durham City-County Planning for the conversion of the RoomStore site into an automobile dealership, said Danny Cultra, a planner in the department. He said in an email that the plans would ultimately need approval from department staff, and building and utility permits are needed before work can begin.
Jacobson said he expects the location to be open in about seven months. The building is about 40,000 square feet in size, and can house 70 to 90 cars.
He plans to have an elevator installed, and to house some classic cars in one section of the second floor. He said he’s buying older cars slowly so that when the new location opens, he will have enough of those cars to display and sell.
“It’s a good business, aside from that, people find it fascinating just to be able to see the cars,” he said of classic cars. “So it’s an attraction also.”
At the dealership’s existing property on Durham-Chapel Hill Boulevard, Mark Jacobson Toyota has more than 100 used cars in stock, Barnett said. The additional property will allow the business to expand its used and new car inventory.
The used car business is picking up, Barnett said. Most used cars come in as a result of trade-ins for new cars, or from off-lease vehicles, he said. Leasing “almost collapsed” four or five years ago, and he said many people held on to their existing vehicles to save money instead of buying.
He said the supply of used cars tightened as people looked to buy used vehicles and save money, and he said that kept used-vehicle prices up, even as new cars are were being discounted.
As the economy improves, and as new-car sales increase, he said there will be more used cars on the market, pushing prices down again. The economy is slowly improving, he said.
According to Kelley Blue Book, used vehicle sale prices remain “uncomfortably close” to new-car prices. The company said in a news release earlier this month that the lack of lease returns in the past several years has played a “pivotal role” in the decline in used-vehicle supply that has driven used-vehicle values up.
Kelley Blue Book expects new-vehicle sales to grow nearly 6 percent in 2013 to 15.3 million units overall. There has been a return in leasing, and the company said in the release that it expects used-vehicle sales values to soften.
“Inventory is growing, Toyota is growing,” Jacobson said. “We carry probably 100 used cars now – we’re going to expand it, it’s also going to relieve pressure here, the space, so we can house more new cars at this facility.”
Jacobson said the 2011 earthquake and tsunami in Japan impacted supply and slowed new-vehicle delivery to the dealership here, but he said the company is now back to capacity, and the economy is improving.
He’s owned the Durham dealership for 14 years. Prior to that, he said he ran Toyota and Lexus dealerships in Florida. When the owner sold the dealership he worked for, he said the distributor Southeast Toyota backed him so he could own a dealership. That’s what brought him to Durham, he said.
Toyota Motor Corp. reported earlier this month that its net revenues were up 26 percent in the nine-month period that ended Dec. 31, and its net income was up almost 300 percent. Its North America vehicle sales were up about 32 percent to 1.865 million.
“The economy is improving, people (are) coming out and buying more,” he said. “We’re gearing up for the future.”