Commercial real estate outlook improving

Dale Beede
Dale Beede
Lara Connolly
Lara Connolly

Is Mesa County still trying to work its way out of the recession of 2008? Yes. Are there plenty of vacant industrial buildings from which to choose? Yes. Is this a great time to buy? Emphatically yes.

Remembering the days of the oil shale bust in 1982, recall that it wasn’t until six years later the commercial real estate market regained a pulse.

The Grand Valley economy hit a wall again in 2009 as natural gas prices dipped. It’s taken seven years to bottom out given the influence of energy extraction on the local economy.

As the economy now improves, we’re ready to build again, and indications point to a new level of growth in commercial and industrial leasing and sales based not on future appreciation, but return on investment.

Mike Foster, a senior broker with Coldwell Banker Commercial Prime Properties in Grand Junction, expanded on this premise.

Foster said the industrial sector remains in a difficult spot because of the oil and gas slowdown, but foresees more drilling rigs moving to the Piceance Basin of Western Colorado in 2017. There are four to six rigs expected to come back due to a decrease of supply and pricing for the commodity.

Foster said the office and retail sectors are trending much better than in 2015. 

The office market is actually robust compared to past years as some buildings reach full occupancy. The retail sector remains strong even as Grand Junction retains its position as a regional retail center. Foster said small pad sites are selling for quick-serve retail. Unfortunately, Foster doesn’t expect the same level of activity with big box retail sites given competition from Internet sales.

While the area has lost jobs, Foster said the population has increased with relocations. With population increase comes housing and retail demand.

For 2017, Foster said he anticipates industrial market numbers to rise, office leasing to increase with the attraction of higher-quality tenants and continued heavy demand for small retail pad sites.

Notable sales in the Grand Valley in third quarter included:

Office:  751 Horizon Drive in Grand Junction, 33,118 square feet for $1.8 million. Seller: Valley Exchange Properties III. Buyer: P & L Properties.

Industrial: 783 Valley Court in Grand Junction, 10,150 square feet for $1,150,000. Seller: Warnke Properties. Buyer: Kassbohrer All Terrain Vehicles.

Retail: 555 Jurassic Court in Fruita, 4,052 square feet for $1,175,000. Seller:  Income Properties. Buyer:  RDC Garland.

Dale Beede, a Certified Commercial Investment Member, is a broker with Coldwell Banker Commercial Prime Properties in Grand Junction. Lara Connolly is a broker associate and property manager with the firm. For additional information, call 243-7375 or visit www.grandjunctioncommercial.com.