Where is the Grand Junction and Mesa County commercial real estate market headed in the next year?
A lot of celebrated economists predict a slowdown in the commercial market going into the year 2020. Are the best days of investing in commercial markets behind us? Is it time to throw in the towel and sell commercial assets? I’d respond this way: “Absolutely not.”
After 11 years of a slowly expanding commercial market, we seem to be finding traction again in the commercial real estate industry.
Warehouses and shop buildings have filled or are filling, retail is expanding again and hotels and restaurants are finding average or better than average returns. The Grand Junction market remains in the expansion stage, and that shouldn’t stop for a few more years. Although we’ve witnessed recent layoffs in the energy sector, job growth continues as new construction jobs slowly replace
high-paying energy jobs.
The only prospective headwind we face regarding new commercial construction are the added development and safety fees builders and developers can expect to pay since the Grand Junction City Council voted to raise fees. Coupled with rising construction costs, the higher fees could mean fewer commercial developments will be started over the near term. This issue could disappear as the economy improves, but the interim could prove a little edgier.
Business expansions continue to fill warehouse space, and some new ventures also have started. I’ll report more on this as the news develops, but 2020 should prove a year of continuing business expansions in our area.
The addition of FHE, a fast-growing manufacturer based in Fruita, into the Colorado Rural Jump-Start tax incentive program is also exciting for the new sales and jobs coming to the valley. FHE has doubled its footprint in shop space. The company offers a great success story.
Infill development should be a mainstay in the economy for the next several years. The City of Grand Junction has specified which redevelopment areas will get special treatment with reduced fees.
Moreover, much of our area is located in federal Opportunity Zones, which offer special tax incentives for investors that choose to build in them. All of this will help local and outlying investors realize Grand Junction is a community ripe with investment opportunities, and that will in turn keep our local economy growing.
We could look at the local economy as a glass half full or half empty. Nevertheless, one can’t discount the fact growth will occur in the Grand Valley, and incentives will help to strengthen investor interest in the area.