Real Estate & Construction  December 22, 2006

Commercial brokers rode high in 2006, will again

The commercial arm of The Group Inc. Real Estate in October released the results of an ambitious research project that sought an elusive answer.

The question: How much space is available in Northern Colorado? Retail, office, industrial – all of it. How much is vacant?

Steve Kawulok, managing broker of the Group’s commercial department, found 5.1 million square feet available for occupancy in Larimer and Weld counties, or 10 percent of the more than 50 million square feet built throughout the region.

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No wonder commercial brokers had such a busy 2006, when they wrote leases for 1.1 million square feet of space. No wonder they look ahead to an equally busy 2007.

“I’ve had one of the best years, if not the best, I’ve ever seen,´ said Larry Stroud, a senior broker with Realtec Commercial Real Estate Services Inc. “And it’s been a real potpourri, too. It’s industrial, retail, office and land. It’s been a great year, and I don’t see anything of a negative nature that would make the next any different.”

Northern Colorado has become such a hotbed for commercial real estate that the local brokers have attracted some heavy, and not necessarily wanted, competition during the past year. Global commercial real estate giant CB Richard Ellis gained a foothold in the region last spring, opening a brokerage office in Fort Collins. And Grubb & Ellis, another commercial heavyweight, opened a Cheyenne office to anchor brokerage activity in Northern Colorado and southern Wyoming.

Brokers throughout the region have reported rising interest in land, industrial and office space during the last half of 2006 from major employers looking to either expand or relocate in Northern Colorado.

“I’m seeing some positive indicators in the economy,´ said Nick Christensen, managing principal of Loveland-based Chrisland Inc., who is most busy with a mixed-use development called 2534, spreading over 540 acres southeast of the Interstate 25/U.S. Highway 34 interchange in Johnstown. “CSU’s new regional economist, Martin Shields, is predicting significant job growth. That’s the best news.”

Retail and office projects in the region, including ambitious plans at 2534 and elsewhere along the I-25 corridor, will provide most of 2007’s headlines.

The February opening of Poudre Valley Health Systems’ new 134-bed regional hospital, Medical Center of the Rockies, has already spawned an office boom that stretches from the hospital’s location in Loveland’s Centerra development north to Crossroads Boulevard and I-25 and eastward to Greeley’s Promontory business park.

Fort Collins is paving the way, literally and figuratively, with financial incentives for an 850,000-square-foot retail and office center on East Harmony Road, to be built by Alabama-based Bayer Properties. That project breaks ground in the spring.

Office and retail vacancy rates that had ballooned with the completion of new projects have begun to shrink again. Kawulok noted in a November research report that office vacancies in downtown Fort Collins had fallen below 10 percent for the first time in two years.

But even the best of economic climates can’t accommodate some of the planned office development in the region, most commercial brokers say. Realtec managing broker Steve Stansfield last fall reported an office-construction pipeline of more than 1.5 million square feet in the region.

“How many of those project are going to be built? We don’t know,” Stansfield said. “I just don’t see who is going to go into all of those properties.”

The commercial arm of The Group Inc. Real Estate in October released the results of an ambitious research project that sought an elusive answer.

The question: How much space is available in Northern Colorado? Retail, office, industrial – all of it. How much is vacant?

Steve Kawulok, managing broker of the Group’s commercial department, found 5.1 million square feet available for occupancy in Larimer and Weld counties, or 10 percent of the more than 50 million square feet built throughout the region.

No wonder commercial brokers had such a busy 2006, when they wrote leases for 1.1 million square feet of space.…

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