Commercial real estate transactions increasing

Dale Beede
Dale Beede
Sid Squirrell
Sid Squirrell

Phil Castle, The Business Times

Dale Beede sometimes loses sleep, but not because the commercial real estate agent is worried about the Grand Valley market. On the contrary.

“There are just some real exciting things happening in the market,” said Beede, a broker associate with Coldwell Banker Commercial Prime Properties in Grand Junction.

Beede said the business with which he was personally involved increased 60 percent in the first half of 2018 over the first half of 2017. Construction is expected to begin next year on the first phase of a commercial center on which Beede long has worked. And other mixed use developments are in the works, he said. “We’re like a community that’s finally coming of age.”

Sid Squirrel, a commercial broker with Bray Commercial in Grand Junction, offers something of a mixed review with some aspects of the commercial real estate market performing better than others. Overall, though, the market has improved, he said. “It has gotten better.”

According to numbers reported by Bray Commercial, 132 commercial transactions worth a combined $79 million were reported in Mesa County during the first half of 2018. Compared to the first half of 2017, transactions rose 30.7 percent and dollar volume increased 27.5 percent. The latest numbers are the highest for Mesa County in a decade.

For the first quarter of 2018, commercial transactions in Grand Junction included the sale of a medical building at 790 Wellington Ave. for $7 million, a 33-unit apartment building at 2260 N. 13th St. for $2.6 million and Hillcrest Plaza shopping center located at 104 Orchard Ave. for $1.8 million.

Transactions that closed in July included the sale of the Canyon View Medical Plaza at 2373 G Road for $31.5 million and a commercial building at 445 W. Gunnison Ave. for $13.2 million.

Commercial construction activity has increased slightly, with 22 building permits issued in the first half of 2018, three more than the 19 permits issued in the first half of 2017.

Squirrel said commercial real estate construction typically lags behind residential construction and has trended upward over the past two years, but not as sharply. For the first half of 2018, 428 single family building permits were issued in Mesa County, up 34 percent from the first half of 2017.

Squirrel said demand varies. Retail has struggled as part of what he sees as reluctance on a national scale among franchisees and independent businesses to expand brick and mortar operations given online competition.

Office space is “getting tighter,” Squirrel said, but likely will have to tighten further before new office buildings are constructed.

A downturn in regional energy exploration and production associated with low natural gas prices also has affected commercial real estate, he said.

Beede said his company has leased 500,000 square feet of warehouse and shop space over the past year, while vacancies also have decreased in industrial spaces.

Beede also expects new construction to occur, including construction on a commercial center on Patterson Road in Grand Junction he’s been working to develop for five years. The center will include a mix of professional office and retail space as well as a restaurant and park. He expects work to begin next summer or fall on the first phase of the center with 35,000 square feet of space. The second phase will include another 45,000 square feet.

Beede said he expects additional development to occur over the next two years near Mesa Mall and the 24 Road corridor.

He said he’s especially excited about what he said will be new types of mixed use development that combine office space, experiential shopping, housing and parks that are constructed in environmentally friendly fashion. “The word is out on what it takes to entice people into retail areas and housing areas.”

Squirrel said he’s encouraged by an increasingly diversified economy in Mesa County that’s less affected by the ups and downs of the energy sector. Tourism and health care have become more important economic drivers.

Squirrel and Beede both said Grand Valley has garnered increased attention as not only a nice place to visit, but also to live and conduct business.

Given increased inflation and rising interest rates, there’s the potential for a national economic slowdown, but Squirrel said the Grand Valley likely wouldn’t be affected to the same extent as past recessions.

For now, though, Beede said he’s excited about the commercial real estate market — to the point he sometimes loses sleep. “I don’t see many downers in this market right now,” he said.