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— Office Properties Quarterly — June 2016
Founded in 1953, Unico Properties LLC is a real estate investor and
full-service operator of office andmixed-use assets. Unico’s Colorado
portfolio consists of more than 2 million square feet of commercial
property in Denver and 1.4 million square feet in Boulder.
Local Commitment. Shared Goals. Superior Execution.
Austin Kane
VP, Regional Director
303.832.1660
T
he Fort Collins-Loveland and
Greeley metro markets con-
tinues to experience growth
and promising economic
indicators. Most recent sta-
tistics show that unemployment
continues to remain strong, hovering
around 5.4 percent. Since the begin-
ning of the year, Fort Collins has
added nearly 3,000 jobs, and Greeley
has added 2,000. According to the
most recent forecast from the state
demography office, Northern Colo-
rado likely will double its current
levels by the year 2040. Larimer and
Weld counties could see the popula-
tion hit 1.05 million, an increase of
roughly half a million people.
The regional economy is com-
prised of a diversified mix of
manufacturing and service-related
industries. It also is becoming a
popular destination for technology
companies to call home because of
the resources available from Colo-
rado State University, which include
several research facilities and a
qualified candidate pool. The market
remains incredibly tight across all
product types with vacancy continu-
ing to drop to new lows.
Vacancy across the office market
continues to tighten, down 150 basis
points in first-quarter 2016 from the
first quarter a year prior with a net
absorption totaling positive 96,640
square feet. This compares to a
negative 84,200 sf absorbed in first-
quarter 2015. Overall, this represents
a strong first quarter of leasing activ-
ity considering 2015’s performance.
The regional office vacancy rate
ended the first quarter at 4.6 per-
cent and has continued to drop.
The vacancy rate is near an all-time
low as reported
by CoStar group,
dating back to the
first-quarter 2001.
Even with the oil
and gas downturn,
leasing activity
remains strong due
to the emergence
of technology and
professional ser-
vices. With oil and
gas companies,
both big and small,
cutting jobs and
slowing operations,
office users are
looking to mitigate
losses by shedding
excess space. With
uncertainty still
looming over the
industry, compa-
nies will continue
to weather the
storm as best as
possible.
It is becoming
more challeng-
ing to find quality
office space oppor-
tunities from a
leasehold interest and sale perspec-
tive. The cost of new construction is
an impediment to the new develop-
ment of Class A product, because the
lease rates have not seen an increase
to justify new construction costs.
Class A vacancy remains low, but the
biggest gains have been in Class B
and C office products.
The gross average asking rental
Jim Palmer
Associate vice
president,
Cushman &
Wakefield, Fort
Collins
Aki Palmer
Vice president,
Cushman &
Wakefield, Fort
Collins
Market Update
Cushman & Wakefield
Cushman & Wakefield
