Northern Front Range Commercial Real Estate Market Conditions

November 2006

What do the commercial real estate experts at Prudential Rocky Mountain REALTORS® predict will happen in the next three months in our six target areas:

Boulder: The downtown office space is very robust. Currently there is an 8% vacancy rate, but that may be closer to 5% due to the fact that there is no available parking for lease in the CAGID district, which controls about 4,000 spaces in the public parking garages. It seems that most of the leasing activity is from tenants moving into the downtown corridor. One property, the Randolph Center, leased 12,000 SF of space to the University of Colorado Behavioral Science Department. The overall retail sector in Boulder is doing well. The downtown retail space is very limited, and the addition of the Twenty Ninth Street area has not adversely affected the vacancy rate downtown. The Twenty Ninth Street Mall is over 80% leased and is planning to open in late October of this year. The 28th Street retail corridor is doing well, with Whole Foods Market expanding into the Barnes and Noble space and Barnes and Noble taking over the Mann Theaters building at 2985 Pearl Street.
Estes Park: The commercial climate in Estes Park is somewhat different than most communities, as the majority of the property that would be the first choice for development is owned by the National Park or the National Forest. Due to the lack of land availability, Estes Park has seen a lot of redevelopment of existing properties, and the town is still in need of some innovative business people who will continue to improve retail and business choices for locals and for tourists. Available commercial property includes several vacant properties waiting for developers, several properties with existing vacant structures, and Bed and Breakfast inns for sale. There are also many re-development opportunities for investment or development of resort condos and short-term rental booking businesses.
Fort Collins: As Money magazine's 2006 best place to live in the country, Fort Collins could be headed for a change. We will let you know if we see any evidence of the award's effect. In the meantime, office vacancy rates for the first half of 2006 for Fort Collins were between 12 and 13%, and we expect the rest of the year to remain consistent with those numbers. Industrial vacancy rates remain flat at 5-6% for the first half of the year. Retail rates continue to rise from last year, which have gone from 5%-6% in 2005 to 8%-10% in 2006. We believe Centerra is playing a role in this.
Greeley: Currently, there is lots of commercial space available. It's a great time to bring a business to town or start a new one. We have a good variety of options to choose from - Class A and C office space, industrial, even areas for people to put up their own office buildings on developed land on the west side of town. Greeley is really a good market for people moving in.
Johnstown: Per the comprehensive plan, commercial space will become available at major intersections along Hwy 60. The first retail/office development will occur at the northwest corner Hwy of 60 and WCR 13. It will include 11 parcels of more than an acre for restaurants, service industries, inline retail space, and office complexes. With the expanding residential growth west of downtown on Hwy 60, additional commercial opportunities will become available.
Longmont: The vacancy rate in Longmont is improving in the short term. While it is still hovering around the 19% range, we see some absorption in industrial flex space. Class A office space is still lagging, as we have more Class A office inventory year-to-date over last year. We see that land sales on the I-25 corridor will remain brisk from Hwy 7 north with focus on the interchanges.
Loveland: Commercial activity has been brisk in the Loveland area, with the exception of some pocket areas which remain slow. The leasing of existing office space remains slow to moderate in the downtown area and other established markets. The Highway 34 corridor, east and west, remains very hot with activity on developed lots and potential developments. Centerra has created a whole separate market for Loveland and the overall region which has skewed the statistics and must be watched carefully when you evaluate properties outside of Centerra.