CBRE report: Northern Colorado ripe for new development

Record low vacancy and availability in Northern Colorado’s office and industrial real estate markets, and near record low vacancy rates for industrial properties, indicates demand for new developments, according to a report released Monday by CBRE Group Inc., a real estate company based in Los Angeles with offices in Fort Collins and Boulder.

Office

Northern Colorado’s office market recorded its fifth consecutive quarter of positive net absorption, totaling 155,055 square feet through the first six months of the year, according to the report prepared by CBRE researchers Sue Selle and Michael Kane.

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Direct vacancy hit an all-time low of 4.8 percent in Larimer and Weld counties. Larimer’s vacancy rate was 5.6 percent based on a 4.7 percent vacancy rate in Fort Collins and 8.9 percent in Loveland. Weld’s vacancy rate was 4.3 percent, including a 3.3 percent rate in Greeley.

An uptick in construction occurred in the first two quarters of 2016 compared with 2015, which will help offset low vacancy and availability.

The notable projects making up the nearly 194,000 square feet under construction include 98,000 square feet of Class B building for Avago Technologies at 4380 Ziegler Road in Fort Collins, and 29,000 square feet of Class B building in the Centre for Advanced Technology in Fort Collins.

The future development pipeline includes two mixed use projects — South Catalyst in downtown Loveland and The Exchange in Old Town Fort Collins.

Deliveries this year totaled 116,000 square feet between the 60,000 square foot Class A building at Woodward Technology Center in Fort Collins and 56,000 square foot Class B building at Hahns Peak Two in Loveland.

Industrial

A near record low vacancy rate of 4.8 percent in the industrial market has elevated lease rates to $8.40 per square foot triple net, nearing the highest rates post-recession, the report said.

Nearly 360,000 square feet of available sublease space is currently on market, an all-time record.

Vacancy remained below 5 percent for the 10th straight quarter, resting at 4.8 percent for the second quarter of 2016.

Fort Collins has a vacancy rate of 2.6 percent in the industrial market, followed by 4.5 percent in Greeley and 13.1 percent in Loveland.

Retail

Record low availability for retail space, 3.6 percent, presents opportunity for new development, researchers said.

The overall Northern Colorado retail market recorded positive net absorption of 64,709 square feet year-to-date. Direct vacancy declined to 3.6 percent, 10 basis points off the record low.

Retail vacancy rates were 2.5 percent in Loveland, 3.5 percent in Fort Collins and 5.5 percent in Greeley.

Lease rates declined slightly year-over-year to $12.61 per square foot triple net. Retail space in Loveland was drawing $14.54 per square foot, in Fort Collins, $14.40 per square foot, and in Greeley, $8.65 per square foot.