Real estate prospects bright in natural resource-rich region
The two questions everyone asks this commercial real estate broker are, “What’s going on in the market? Are prices ready to start rising?” My answers are always, “It depends.”
The price of both commercial and residential real estate depends largely on the demand for that real estate. As the Western Slope economy softened in 2009, demand for industrial building leases and sales, office space and general commercial space also softened. Many building tenants looked for ways to mitigate their expenses in a climate of lower gross incomes for their businesses. It seemed the entire commercial and industrial tenant world was suddenly attempting to renegotiate leases, leases that were established in the high-flying days of “Get a building in which we can operate, I don’t care what it costs.”
When fiscal reality hits a real estate market, landlords, tenants and owners sometimes suffer the consequences. Demand can become so lethargic that asking rents and list prices drop significantly. This picture fairly accurately describes the commercial and industrial real estate market over the last 2 1/2 years.
So, you ask, “What’s going on in the local market for real estate?” I’m glad you asked.
The Western Slope of Colorado continues to employ thousands of people in the businesses of extracting resources — coal, natural gas, oil, uranium and even rare earth minerals. That’s not to mention all the service companies involved in the industry.
The region still employees thousands of people in industries that are only predicted to grow over the next 10 or more years. Add to that the tourism industry that’s thriving because of our local wineries, mountain biking, sightseeing and hiking, and you’ll find reasons for real estate demand to continue to strengthen.
Concerns persist the national economy could weaken as a result of structural issues surrounding national debt and a weak dollar. But there’s a good chance the inhabitants of Mesa as well as Delta, Garfield and Montrose counties will continue to grow our job base and prosper far more than our neighbors in other states because of the natural resources prevalent here.
My answers to questions regarding the local real estate market, then, still depend on the ability of the local population and state to continue to find ways to provide more materials and services to meet growing national and international demand. If we work together to reasonably share our national resources with the rest of the world and pull together as we westerners typically do, our real estate markets will strengthen as our job base continues to expand and prosperity grows.
Here’s looking forward to our jobs future!