Commercial brokers claim ?guarded optimism?

Commercial real estate brokers in Northern Colorado view 2005 as a year much like the current one, with a mixed bag of shining opportunities and daunting pitfalls.
That?s a consensus of those contacted over the past several weeks by the Business Report. Most of the current players in the commercial real estate arena are also veterans of the 1990s, that scintillating decade during which everything that could go right did.
But three years of economic downturn, job losses, terrorism jitters and all the other factors that have cooled things off leave brokers a little less giddy, a little more realist in their expectations.
?I think there?s still, generally, a bullish feeling out there,? said Dave Veldman, partner in Veldman Morgan Commercial Inc. ?But whatever you read about the economy, when you talk to small business owners you know that it hasn?t been all that great for a while. If they have a mediocre business, and a mediocre business plan, this might be the year they don?t survive.?
Survival of the fittest, in other words. And, since small business is the bedrock of the commercial brokerage industry, brokers better hope the fit outnumber the economic road kill in sufficient numbers.
Hot spots still abound for brokers, especially for those offering attractive investment properties, including land.

Investment tool
?Certain segments are more active than others, and land is still a pretty hot commodity,? said Steve Stansfield, managing broker at Realtec Commercial Real Estate Services, the brokerage that is to the commercial world what The Group Inc. Real Estate is to the residential market.
?There?s still plenty of capital out there to buy real estate, and plenty of people looking for real estate as an investment tool.?
So much for the hot. The cold? Office leases, fewer and fewer of which have been inked during 2004, and for which the market shows signs of softness for the coming year.
Part of that has to do with historically low interest rates, low enough to entice business owners to build or buy, rather than lease, office space.
But the certainty of rising interest rates could turn that around, Veldman said.
?There were so many projects for them to buy at extremely low interest rates,? he said. ?Those dynamics will change.?
As in any other year, or any other place, location is the answer to whether commercial real estate fortunes rise or fall. Michael Ehler, a Realtec colleague of Stansfield?s, said Interstate 25 will, as it has for years, remain the 2005 hot spot.
?The I-25 corridor, and the other prime commercial corridors, are very active and will continue to be,? he said. ?If you get away from those, things are much, much slower.?
But Ehler, like Stansfield, said he worries about economic tectonics outside the region that could choke growth of businesses upon which brokers depend.
?I guess you could call me guardedly optimistic,? he said. ?I can think of no other place I?d rather be in 2005 than here in Northern Colorado, but there are some things out there hanging. There?s a growing body of thought that brings up the possibility of a recession again.?

Greeley opportunities
If ever there were a place loaded with potential for economic revival, it?s Greeley-Evans. Yawning office and light industrial space, with rock-bottom lease rates, combined with a labor pool that no other Northern Colorado community can claim, lead brokers to believe 2005 is the year of opportunity.
For example, the 270,000-square-foot TriPointe business center in Evans, the former home of State Farm Insurance Cos.? regional claims office, has been empty for four years. But Julia Crawmer, who is the leasing agent for owner Colorado Santa Fe Real Estate Inc., last week was working three deals, including one with a single user that might take the entire space.
?I?ve been very pleased with the activity, and it?s really driven by the employment base we have here,? Crawmer said. ?Greeley and Evans are in a great position for employment growth. You can even extend that to Windsor. We?re very attractive for incoming employment.?
The promise is real, with news earlier this month that insurance provider Lock/Line Inc. would bring 500 jobs to the city, either at TriPointe or at the also-empty Sykes Enterprises building, a Realtec listing where 400 people clocked out for the final time in February 2002.
?I?m all about jobs,? Crawmer said. ?There?s nothing more satisfying for a broker than bringing in a user that will put people to work.?

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