Commercial real estate activity lagging in Mesa County

Mike Foster
Mike Foster

In conversations with friends and business associates, I’m frequently asked about the commercial real estate market in Mesa County.

My usual response is to first try to determine the area of the commercial real estate market that is of specific interest. The market can be divided between sales and leasing activities generally and among the office, retail and industrial segments in particular.

Overall, year-to-date commercial MLS real estate sales in dollar volume are down compared to the same period in 2014, and the transaction count is substantially lower.

Commercial real estate graphic

Sales and transaction counts in the office and retail segment show a demonstrative downtrend from 2014, with the industrial segment making up the difference in sales volume while showing weakness in transaction count. It’s important note a single $5.25 million industrial transaction accounted for 24 percent of the overall year-to-date commercial sales volume. 

In terms of lease absorption, the war on fossil fuels continues to exert an outsized effect on Mesa County as the loss of 10,000 jobs from the employment base continues to adversely affect office and industrial lease inventories.

Of the three commercial segments, office space is the segment most directly correlated to head count. Retail is the least correlated because retail spending is dependent on Mesa County and out-of- county residents regardless of their labor force participation. In regards to industrial leasing, the statistics are better than reality given the large amount of shadow occupied space in the market. The inventory of class A office space is much tighter than the class C and office flex space that dominates the office inventory.