Page 6
— Land & Development Quarterly — July 2016
Market Update
I
t has been a challenge to
keep up with all the awards
bestowed on Northern Colora-
do in the past year or so: No. 1
Best Small Town to Visit, Estes
Park, Smithsonian Magazine; No. 2
Small City for Jobs, Greeley, Forbes;
Best Places to Live in the West,
Loveland, Sunset magazine; Next
Top City for Tech Jobs, Fort Collins,
Fast Co.; and No. 3 in the nation for
Colorado State University’s Veteri-
nary Medicine Program, U.S. News &
World Report. And these are just the
recent “notables.”
Why?
We have jobs offered by a
diversified economy well represent-
ed in the bioscience, creative, energy,
agriculture, health and information
tech sectors. A few of the major
employers are Woodward, UCHealth,
Anheuser Busch/InBev, Banner
Health, Intel, HP, Kaiser Permanente,
Vestas and Owens-Illinois.
Of equal importance is our tradi-
tion of small-business and creative
entrepreneurs, many of which began
as spinoffs from CSU, such as Water
Pik, plus our enviable high quality of
life provided by the arts, education,
health care, recreation and climate.
Oops – forgot beer.
As well, downtowns. Yes. Down-
towns. Fort Collins has had a vibrant
downtown for some years and that
is now happening in Greeley and
Loveland.
And under all this activity is land.
Commercial.
These “100 percent”
locations remain in demand for
retail: Interstate 25 and U.S. High-
way 34; West Greeley at Centerplace
(anchored by Target, Safeway and
Kohl’s) and St. Michael’s (Discount
Tire, Kum & Go, general retail and
restaurants); and
I-25 at Harmony
Road, Timnath,
anchored by Wal-
Mart and Costco.
Outside of such
developments,
there has been
little new retail.
Asking prices for
commercial sites
have escalated but
there have been
limited number of
actual sales.
Industrial.
Although there is
little inventory and
only limited new construction, rents
are increasing only modestly. Land
prices are up but, again, moderately
– over the past year prices are trend-
ing toward $4 per square foot, an
increase of about 50 cents per sf. The
decline of oil and gas prices has had
only a minimal impact to the Weld
County industrial market.
Single-family.
While escalating
housing prices set records monthly,
demand remains strong to intense.
In Wellington, 10 miles north of Fort
Collins and long known for afford-
ability, prices increased over 13 per-
cent year-to-date, reaching an aver-
age of nearly $306,000. The inventory
of finished lots is very limited in
the more active submarkets of Fort
Collins and Loveland. Many of the
new subdivisions being developed
or planned are in Timnath, Windsor
and Severance. There are few home
sites remaining for less than $65,000
in Northern Colorado with most in
the $75,000 to over $100,000 price
range. Affordability is gaining much
attention in both Larimer and Weld
counties.
There would be many more new
developments if it weren’t for water.
In many jurisdictions 3-acre-feet of
water is required for each acre of
land to be developed. Three years
ago, an acre-foot of Colorado-Big
Thompson water was about $10,000
– today is it nearly $50,000. This and
the ever-increasing development
fees results in “starter” homes priced
at $300,000 rather than $250,000.
Multifamily.
Over 2,000 attached
units, market-rent and student-
oriented units have been built each
year over the past three years. While
rents approach $2,000 per month
for the new, upscale units, vacancies
remain historically low. However, in
existing projects, those “free rent”
signs are appearing. Land prices
range from $12,000 to $15,000 per
unit for the larger projects. Within
downtown Fort Collins, land prices
for multistory apartment buildings
are $100 per sf.
Some deals.
So far in 2016, these
transactions characterize the growth
in Northern Colorado.
• Sheels All Sports purchases 23.6
acres in the southwest quadrant
of I-25 and U.S. Highway 34 (the
2534 development in Johnstown)
for $13.17 million for a 250,000-sf
“shopping adventure” sporting goods
store.
• Alberta sells for $6.42 million
11.93 acres located along the east-
ern boundary of the Foothills Mall, a
$350 million redevelopment project
in Fort Collins. There are 450 units
of apartments planned, which is
$14,256 per door land cost.
• In northwest Loveland, 245 acres
were acquired for $3.6 million for
a mixed-density residential project
that may total 850 units; the price of
$14,694 per acre is at market for this
large parcel.
• Competition between providers
remains strong as UCHealth paid
$2.81 million for 21 acres for a new
hospital; for an owner-user, the $3.07
per sf purchase price is reasonable.
Outlook.
Colorado added over
100,000 new residents last year but
built only 25,000 new dwellings. And
another million or more people are
expected by 2040. In Northern Colo-
rado, it is expected the population
will double to a little over 1 million.
In terms of the demand for land,
the prospects are nothing short of
excellent long term. There will be
more booms and more busts, but the
trend line is strongly positive.
s
Michael Ehler,
CCIM, MAI
Managing broker/
partner, Realtec
Commercial Real
Estate Services
Inc., Fort Collins
Three years ago, an
acre-foot of Colorado-
Big Thompson water was
about $10,000 – today
is it nearly $50,000. This
and the ever-increasing
development fees results
in “starter” homes priced
at $300,000 rather
than $250,000.
