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Page 10 — Office Properties Quarterly — March 2017
services along Colorado’s Front Range. To learn more about our services,
• Accounting • IT Management
• Asset Management • Lease Administration
• Budgeting • Leasing Strategies
• Construction Services • Maintenance/Technical Support
• Consulting • Property Management
• Emergency/Crisis Response • Receivership Services
• Human Resources • Support Services
• Insurance/Legal Risk Management • Tenant Relations
102 North Cascade Avenue, Suite 550,
Colorado Springs, CO 80903
Phone: 719-520-1234 • Fax: 719-520-12
AMO ® Accredited Leader in
OFFICE BUILDING MANAGEMENT
DENVER + COLORADO SPRINGS
WE BUILD INSPIRED PLACES TOwork
T here is no uncertainty about
the health of the Northern
Colorado economy; it is on
solid ground and 2017 promises
to be another year of growth.
The Northern Colorado market is
comprised of Larimer andWeld coun-
ties with the prominent commercial
real estate markets being Fort Collins,
Loveland and Greeley, with Johnstown
andWindsor rapidly becoming eco-
nomic drivers. Although the national
economy has been on a long, slow
recovery since 2010 and is possibly
near the end of its current business
cycle, the current metrics on the
Northern Colorado economy continue
to give business owners confidence.
The region continued to generate
jobs at a healthy pace pushing the
unemployment in Northern Colorado
to a historic low of 2.3 percent. Over
the next five years, it is anticipated
that 28,000 new jobs will be created.
Our population of approximately
620,000 residents is expected to grow
to 700,000 residents by 2020, which
will continue to drive all market sec-
tors. Colorado ranked No. 4 nationally
in home price appreciation and the
Fort Collins-Loveland area increase of
greater than 10 percent in 2016 was
slightly better than the Colorado aver-
age home appreciation.
With relatively little new construc-
tion of commercial space over the last
24 months, vacancy rates continue to
trend lower. The Northern Colorado
office market ended fourth-quarter
2016 with a vacancy rate of 5 percent
after positive absorption of 225,759
square feet. The vacancy rate for
retail space after four years of steady
absorption is at a historic low of 4.2
percent with aver-
age quoted rates
up 20 percent over
this same period.
Industrial space
saw a 5.36 percent
vacancy rate at the
end of 2016 boosted
by fourth-quarter
absorption of
226,308 sf.
• Office: It’s a
landlord’s market.
Demand for office
space increased in
Northern Colorado in 2016 with most
leasing activity occurring primarily
in the first six months. Notable lease
transactions include Agrium (120,000
sf), which will take occupancy of its
new headquarters building in June,
Comcast (82,104 sf), Madwire (66,667
sf), Pinnacle Agriculture (24,500 sf) and
Meyer Natural Foods (18,000 sf).
With vacancy rates of 5 percent
remaining level over the last 24
months, new demand will be met
by build-to-suit and speculative con-
struction. The average lease rates
on recent Class A transactions have
been in the range of $28 to $32 gross
per rentable square foot, which
makes speculative construction dif-
ficult. With only 600,000 sf of Class A
and B office space available and aver-
age absorption in excess of 225,000
sf annually over the last three years,
rental rates for quality space will be
increasing and businesses needing
larger blocks of space will be look-
ing to build to suit or speculative
construction to satisfy their require-
ments.
There also are many developments
that are changing the face of Northern
Colorado.
• Fort Collins. Colorado State Univer-
sity is well underway with the com-
pletion of a new on-campus football
stadium designed as a multipurpose
venue, which will have a capacity of
41,000. This $220 million project is
scheduled for completion for the 2017
season. In Old Town Fort Collins, the
Elizabeth hotel, a 164-room upscale
hotel plans to open in the fall.
• Loveland. The Foundry, a public-
private partnership between the city
of Loveland and Brinkman, is plan-
ning its groundbreaking in the spring
after being on the drawing board for
six long years. The anticipated project
cost is $76 million and will include
apartments, retail space, a theater,
community plaza and multistory
parking garage.
Within the Centerra master-planned
community at Interstate 25 and U.S.
34, the developer McWhinney plans
to add two hotels, 420 apartments
and an undetermined amount of new
retail and restaurant space on both
the west and east side of the inter-
state. McWhinney’s projects are in
various stages of development with
its hotels breaking ground in the sum-
mer.
Another mixed-use project
announced for Loveland, The Brands
at The Ranch, is a $572 million proj-
ect by developer Martin Lind that
includes a high-end shopping center,
two hotels, office space, apartments
and an IMAX theater, which would
be built on both sides of I-25 at Cross-
roads Boulevard.
Ron Kuehl
Broker, Realtec
Commercial,
Loveland
Market Update
Realtec Commercial
Centerra's Rocky Mountain North at 1996 Rocky Mountain Ave. in Loveland is one of
the newest Class A projects completed in Northern Colorado.