Commercial real estate sales slowing, but not stopping

Darah Galvin

The Mesa County Assessor recently released third quarter numbers reflecting similar trends in Mesa County since the second half of 2022 — a slowdown, but not shutdown, of commercial real estate sales.

Year-to-date, commercial volume in Mesa County is down around 28 percent and units are down 32 percent.

While those numbers might seem negative, it’s important to compare them to the years prior to the onset of the COVID-19 pandemic in 2020. Through the first three quarters of 2023, sales volume is up 18 percent compared to the first three quarters of 2019 and 8 percent compared to the same span in 2018.

In many other metropolitan areas, office sales have slowed. But Mesa County saw the best quarter since the Federal Reserve began raising interest rates in August 2022.

This can be attributed in part to the sale of the former Oddfellows Hall at 128 N. Fifth Street for nearly $4.6 million in the middle of the quarter and the sale of the also recently remodeled and almost fully leased downtown office building at 660 Rood Ave. for $1.9 million on Aug. 1.

The third quarter saw an increase in sales numbers of 9 percent and a volume increase of 39 percent compared to the third quarter of 2022. Since the commercial market was so strong at the beginning of 2022, office sales in 2023 are still down 38 percent in number of sales and 19 percent in volume when compared to the same period in 2022.

Retail sales in Mesa County took a hit in the third quarter of 2023 with a 61 percent decrease in the number of sales compared to the second quarter of 2023 and a
53 percent decline compared to third quarter of 2022. Retail sales are comparable to 2022, with year-to-date 2023 only 3 percent behind in volume of year-to-date 2022. This can be credited to some major purchases in the first two quarters of 2023.

The resale portion of the Mesa County multi-family market has visibly slowed as many investors sit in awe of the multi-family building happening everywhere in the valley — from Fruita to downtown Grand Junction to Orchard Mesa.

The resale market is down 60 percent in volume from 2022 to 2023 and 31 percent in number of units sold. The third quarter of 2023 had the same number of sales as the second quarter of 2023 and similar numbers compared to the first quarter. So we can expect this is the new normal in multi-family sales — at least until the building craze slows.

Once higher interest rates began affecting the market, industrial and warehouse sales in Mesa County and Grand Junction slowed. Many businesses that were looking to expand have chosen to stay where they are. Industrial buildings sit on the sale market for longer as well.

Year-to-date industrial sales are down 35 percent and almost 52 percent in volume compared to year-to-date numbers in 2022. Larger dollar sales are still happening, however. That includes the sale of 719 Arrowest Court in the north Grand Junction area for $3.88 million on Aug. 31 and the newly constructed shop and office building at 826 Justice Court that sold for $1.45 million on Aug. 29.

Despite the decline in the Mesa County commercial market in recent years, it’s still moving. Businesses and investors continue to seek new opportunities and areas to explore.