Industrial space draws users’ interest

The outlook for industrial space in Northern Colorado during 2008 points toward continued interest, especially as metro Denver’s supply becomes scarcer, sending prospects northward, brokers in the region say.

Lease rates for warehouse space will hover in the $5- to $6-per-square-foot range, said Joe Palieri, whose investment in the abandoned Water Pik building in Loveland 18 months ago is continuing to bear fruit.

“As far as Water Pik goes, we seem to be doing very well, with Technology Driven Products in there now,´ said Palieri, a broker with Chrisland Inc. in Loveland. “We’re working with another tenant for a 40,000-square-foot piece, and should have something to announce there in a few weeks.”

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Palieri said he was also encouraged by the new contract to buy the space vacated by Agilent Technologies, a gaping hole in Loveland’s industrial portfolio.

“For that building to be under contract says something,” Palieri said. “Those people aren’t stupid. They must see something there.”

Lease rates have moderated even as the vacancies in most parts of the region shrink. Greeley offers the best deals on the market, with warehouse space available for $2.75 per foot, according to numbers compiled last month by Sperry Van Ness/The Group Commercial LLC. Vacancy rates in Greeley have tumbled from a high of 19 percent during the second quarter of 2006 to 12.5 percent last month, the report shows.

Loveland’s vacancy rates have also shrunk, from a high of 8.5 percent at this time last year to just over 5 percent today, and lease rates for warehouse space averaging $7 a foot.

Fort Collins’ vacancy rate took a similar turn, the report shows, falling from 9 percent in mid-2006 to under 5 percent today. Lease rates fall into the broad span between $3 per square foot to $20, with an average rent of $6.75.

The same report shows Windsor’s industrial vacancy rate also below 5 percent. Lease rates were not calculated.”