- September 15, 2011
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INDUSTRIAL / FLEX:
Boulder leads the region in absorption (positive 240,000 SF), with the Loveland area next at 75,000 SF positive absorption this year The Fort Collins area had two large leases of note. Cargill leased 17,000 SF at I-25 and highway 14 for a steel plate distribution facility. Rail access was critical to this placement. Colorado equipment leased 18,000 SF nearby on highway 14 (Mulberry Ave.) for their regional center. The greater Loveland area would show the lowest vacancy and availability rate if one factored out the new ACE/NASA research park site (former Agilent). The city of Loveland is still searching for a park operator in conjunction with the CAMT association group after Minneapolis based United Properties dropped their offer for the site. With 1.4 million SF of vacant industrial space in Loveland, the resultant non-ACE statistical vacancy would drop to about 500,000 SF. The greater Longmont metro area is also enjoying some new leasing activity. Funovation, (builds laser tag equipment) moved into 11,000 SF on Sunset Dr., and Sundrop Fuels occupied 12,500 SF at The Campus at Longmont. The just announced 2012 Butterball turkey processing plant closure will open up a large amount of industrial space, however. Though Greeley area leasing activity was mild this last month, half of the leases were to oil and gas related companies for spaces below 5,000 SF in general. A multi-tenant mixed-use investment property at 1990 59th St. in Greeley sold for $2 million, at a 9% capitalization rate. The sale was part of a multi-property transaction and the property was occupied by local origin tenants Available space rates continue to be about twice the rate of vacant space on the market. This rather high amount of availability shows that many companies are moving, consolidating, or planning on expansion at a new location, or shutdown at their current location. This rate has risen over the year from ~ 5% (500 basis point) spread, to 8% (800 basis point) spread now.
All the metro areas except Greeley have enjoyed positive office absorption year to date. Fort Collins leads all areas with almost 125,000 SF absorbed in 2011. Boulder’s leasing activity in general was “hot” by regional standards. Boulder leasing activity across all property types in July and August alone created 180,000 SF of positive absorption, compared to 230,000 SF in all of 2010. Boulder leases included Indra’s Net at LakeCentre Business Park, and Juwi Wind at Pearl East, both at about 7,000 SF.
All metro areas have enjoyed positive absorption in the retail sector this year. Much of this is due to big box type retail openings in the Longmont and Greeley areas. An automobile dealership building sold on Main St. in Longmont for $1.1 million, or $45 PSF. The property was built in the mid-1960’s. The Black Diamond Marketplace on I-25 Frontage Road outside Longmont sold for $1.6 million to an investor. Tenants include Starbucks and Qdoba restaurants. The historic Windsor Mill changed ownership back into the hands of a previous owner in an off-market deal. The property had once received a grant for renovation, though never done.