Pickings still slim for Greeley-Evans industrial space

GREELEY — While conditions could hardly be described as the worst of times for industrial real estate in the Greeley-Evans area, things are getting amazingly tight.

Weld County, as a whole, has only a 1.7 percent vacancy rate for industrial properties, compared with a 5.2 percent vacancy rate for all of Northern Colorado. While vacancy rates of near 10 percent are considered to be healthy by most real-estate agents, there are a set of complex forces at work, said Travis Ackerman, a vice president for commercial properties at DTZ’s Greeley office.

“Before oil took off on its downward rollercoaster ride, Weld County was demanding some of the highest (industrial) lease rates in the state – ever,” Ackerman said. “My guess is it hasn’t changed all that much. Demand is down, but demand is still outpacing supply.”

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Although the oil and gas industry is down because of global oil and natural-gas prices, the Greeley-Evans area is not hurting, sporting only a 6.6 percent unemployment rate at the end of the second quarter. While O&G employment is down, it certainly has not shut down, said Ackerman, who specializes in that business sector.

“It’s not that the bigger players have shut down; they’ve just slowed down,” he said. “But If this (the low oil and gas price) lasts another six or 12 months, you’ll see people moving out.”

Some major projects could alleviate the situation, but at least two appear to be somewhere down the line.

The Grainery, former home to Monfort grain elevators, has a 102-acre mixed commercial/industrial lot between AA Street and O Street to the west of U.S. Highway 85 that went through a preliminary plat this spring, said Paul Whalen, a planner for the city of Greeley. Realtec Greeley and CBRE are marketing that property, owned by the Greeley Land Fund of Colorado Springs, but a final subdivision plan has not been submitted to the city.

Whalen said about 75 percent of the Grainery preliminary plat was committed to industrial property, with the remainder showing commercial use. Final commitments to water, sewer and storm drainage still are pending, as are the final subdivision plats.

Similarly, a 27-acre industrial lot purchased last November, Ironside Business Park, is undergoing city review, although not apparently on any fast track. California-based real estate Cress Capital LLC purchased the site, located at the southwest corner of East 16th Street and First Avenue, for about $5 million last November, quickly announcing that it would add another six buildings to the current 75,000 square feet of industrial space that already housed 22 tenants.

Whalen said Cress is still working through a preliminary plat to add another six buildings, between 10,000 and 20,000 square feet each. Neither Cress nor the Greeley Land Fund answered requests for comments.

Ackerman said the biggest hole in the inventory is industrial space with outlots, a necessity for both oil and gas companies and agricultural companies. However, even with prices running in the high teens to $20 per square foot, triple-net, the price still is not reaching the cost of building new buildings.

“That’s true everywhere, including Larimer and Boulder counties.”