Interest on the rise for I-25 industrial properties

Interest in industrial properties along the east side of Interstate 25 in southwest Weld County is growing, sparked by the increased construction activity and growing population along that stretch.

Vacancy rates for industrial properties are somewhat lower than the nearly 20 percent vacancy rate for industrial, flex, office properties in Longmont quoted by the Longmont Area Economic Council, said Keith Kanemoto, broker associate and owner of Longmont-based Prudential Rocky Mountain Realtors.

Depending on the property type, Kanemoto figured about a 15 percent vacancy rate along the I-25 corridor in southwest Weld County. He also figures a bit of vacancy isn’t necessarily a bad thing. It means there’s something to show the growing numbers of businesses who come looking for space.

“Given the fact that the economy is starting to turn around and that we’re seeing more businesses wanting to move out to I-25, I think the availability of product is helping bring retailers and businesses out to the area,” Kanemoto said.

Construction of high-profile projects along the corridor such as Ritchie Bros. Auctioneers at Mead, American Furniture Warehouse at Firestone and Furniture Row at Dacono doesn’t hurt, either.

Center of activity

Gregory Crowell, listing and leasing agent for I-25 Business Park at the northeast corner of I-25 and Colorado Highway 66, said interest in the area is on the rise. “I think interest is up this year over last year. Actually we’ve had a lot of activity and a lot of interest over the last two months.”

Crowell and others said that interest is building as the region’s growing population puts more people on the interstate. Businesses are attracted to the corridor for the increased visibility and accessibility it offers.

Crowell, of Millennium Progressive Vantage, said the 132-acre park he represents sits roughly in the center of Northern Colorado business activity.

“Greeley, Boulder, Denver, Fort Collins, Loveland. We’re just right in the center of all that,” he said. “If you’re going south to Denver or north to Fort Collins, it’s about an equal amount of time. It’s about a half hour either way,” Crowell said. Head for Greeley or Boulder from the intersection and those trips, too, are about a half hour, he noted.

“It’s a really excellent location.”

I-25 Business Park is home to a mix of commercial and industrial users that includes K&C RV, Camelot RV Storage, a construction company, a lumber company and EPOCS Manufacturing, a metal fabrication firm. Crowell said a company that produces packaging equipment for drug manufacturers – Maverick Industries – has purchased a lot and plans to build in the park.

With commercial/industrial zoning, the business park is suitable for a variety of industrial uses, Crowell said. “We have a large area in the center – probably 30 to 40 acres – that would be ideal for a car or truck dealership or other large user.”

The park will likely see some office/warehouse condo development in the near future, as well.

Smaller buildings in demand

Kanemoto said that demand is highest for small-sized industrial buildings right now. “Smaller, free-standing industrial buildings are very difficult to find right now. It seems like users under 10,000 square feet have been purchasing their own facilities due to favorable interest rates.”

That’s a trend that is likely to continue in the industrial real estate market, he said. “With the improving economy and interest rates we’re seeing more users purchasing their own buildings.”

On the larger side, buildings over 50,000 square feet are rare, as are prospective users right now. “The demand for larger facilities is limited,” he said.

Kanemoto said the market is fairly soft for buildings in the mid-size range, roughly 20,000 to 50,000 square feet. “For anything over 30,000 demand is soft right now.”

Industrial leasing activity reflects the sales market with most prospects looking for units under 4,000 to 5,000 square feet. Properties of that size with dock-high access are very desirable right now and availability is limited, Kanemoto said.

Kanemoto’s own Del Camino Junction, a 40-acre business park at the northeast corner of I-25 and Colorado Highway 119 is filling with retail and food-service uses as the retail presence in southwest Weld County continues to expand.

“When we purchased Del Camino Junction and started to market it we thought that we might get some industrial users. We haven’t seen that yet,” Kanemoto said. The construction of the mega-sized American Furniture Warehouse just across Colorado 119 to the south is driving more retail development.

While residential and retail development will likely continue in southwest Weld’s I-25 corridor, Kanemoto said industrial users probably won’t be pushed out. Like others, these users are attracted to the transportation infrastructure the interstate represents. “We’ve seen increased activity as a result of proximity to I-25,” he said.

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