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Stuart Dobson

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Is Colorado in a depression?

03-04-09
Stuart Dobson
Is Colorado and the U.S. in another depression?

The old anecdote of  'when your neighbor loses a job, it's a recession but when you lose your job, it's a depression' may still apply somewhat.  Nationwide even the Fed says there is little hope for a quick recovery and that the nation may lose 8 million jobs this year alone!  Colorado seems to be doing a little better, the housing market here (at least under $350k) is decent, and the commercial cheap and small office and retail space market is doing ok.  There are some bigger deals getting done, but definately not at the same pace as last year.

It seems like everywhere you look people are downsizing their houses or talking about downsizing if they are underwater on their loan.  Perhaps the Obama plan will help, but it will probably do very little if anything to help the overall economy which is where the fear is coming from.

Banks are still tightening their lending standards despite receiving hundreds of billions of dollars of Federal Aid money.  People are fearful of losing their jobs and have adjusted their spending habits accordingly.  Although it's great to see the nation's saving rate increase from a long term point of view, I think that it is definately canceled by the likelihood of higher taxes and interest rates in our future.

The Colorado real estate market is doing better than most of the country, so those who choose to sell their homes in many cases actually can because pricing has held steady in their areas, but time will tell, as this recession-depression wears on whether or not the economy will improve enough for most homeowners to keep their jobs and keep paying their mortgages.
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Denver small office and retail space commercial real estate market

03-02-09
Stuart Dobson

Leasing commercial small office or retail space in the Denver Metro area.

There is a lot of interest right now in the Denver commercial small office and retail space real estate market.  I'm defining small as less than 3,000 square feet.  This seems to be occurring for a few reasons and may be a bright spot of recovery for the economy. 

  • Recently laid off workers starting new businesses.
  • Successful home based companies leasing commercial space for the first time.
  • Companies downsizing to smaller commercial office or retail space.
  • Companies downsizing to cheaper commercial office or retail space.

Thankfully we have successfully worked will each type of commercial real estate client in the last month as see some definate trends occuring.  A few skilled consultants, professionals, or trades people are being smart in using a commercial real estate broker to help them seek the best space, negotiate a lease, and advise them about potential problem areas when first starting a new business that requires a professional office or storefront.  These are people right now that are tired of job market uncertainty, have recently been laid off, or are just ready to take that next step for their buiness.  They typically have assets in a 401k or bank account that is financing their endeavor so they don't have to deal with the banks.

A second group seems to be the companies who have leases that are expiring or are just negotiating out of their existing lease.  These companies are seeking smaller and/or less expensive office or retail space.  They accept the state of the economy, the economics or their situation and are acting in a prudent manner.  They seeking the advice of a commercial broker to gauge the market, negotiate the new lease, and fill in any knowledge gaps they may have with respect to commercial property leasing.

Unfortunately in this area and market, there are a large number of new or newer property developments that have lease rates in the mid to high 20's per square foot, plus triple net (NNN) expenses that make the space unaffordable in this current real estate market.  I have read where some national real estate experts predict we are going to have a 30% contraction in the amount of retail space needed by businesses in the next few years.  If the recent spate of big box users (Circuit City, Linens and Things, etc.) going bankrupt and liquidating is any example, then the big, expensive, newer shopping centers and strip malls are in serious trouble.

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Homestead Hills and Northbrook updates

03-02-09
Stuart Dobson
What's happening in Homestead Hills

Two recent planned changes that will affect the Homestead Hills in Thornton community. 

First, it looks like the City of Thornton in finally going to put in some speed cushions in the neighborhood.  The residents have complained since the community started that there are too many drivers using the neighborhood as a shortcut to get to either; the Northbrook neighborhood or Horizon High School.  If the city would have simply extended East 140th Avenue when they were constructing the cell phone tower near the park, the park itself, or when the neighborhood was built this wouldn't have to be done now.  Many Homestead Hills residents talked to the city traffic engineer about this very proposal, but it fell on arrogant and deaf ears.  So, although the speed cushions are a good idea, they probably won't work that well, speed 'dips' would be better in our opinion.  Also, if E 140th Avenue was extended it would be a huge benefit to the Northbrook residents as it would allow a much faster way to get to Colorado Blvd. as well as allowing the fire station at 140th and Colorado to have quicker emergency access to Northbrook homeowners.  Finally, if the city does get funding from the stimulus package to improve Holly from 140th to 160th Avenue, the increased Holly traffic will also necessitate better emergency and police response via an extended 140th Avenue rather than trying to go thru the school zone at high speed in front of Horizon High School.

The second small change to Homestead Hills is occurring on the South side of the neighborhood right behind the Lutheran church and adjacent to the homes regarding the retention ponds.  Apparently, the two ponds are going to be re-escavated  to 15 feet deep and joined together to form one big pond.  Personally, I wish they would just make the re-configured ponds a 12 yrs. old and under dirt bike park for the residents.  I think it would be great to see more kids outside on ATV's and dirt bikes playing rather than indoors watching TV or on video games.  Sure there is the dirt and noise, but it may add vibrancy and excitement to the community.

For more information about what is happening in Homestead Hills, Northbrook or surrounding communities, or to find out what it happening with the latest real estate, housing or home selling trends, please contact us directly.

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commercial space leased in Longmont, CO

02-23-09
Stuart Dobson
70,000 Commercial Square feet leased in Longmont, CO

Creative Foam, a designer and manufacturer of foams and plastics for the automotive, medical, and composite markets, announced in January 2009 that it is leasing 70,000 square feet in Longmont, Colorado. The Michigan-based company is expanding in Colorado to service Danish wind turbine manufacturer Vestas Wind Systems, which opened its first North American manufacturing facility in Windsor in 2008 and is further expanding in the state with other facilities planned in Brighton and Pueblo. 

Recently with the economic malaise in the country, even Vestas announced a temporary hiring freeze but hopefully this will not last long.  It's definately good to see new industry moving into Colorado, and the Longmont area is a great place to live in the north Denver Metro region.

This lease by Creative Foam underscores again that Colorado commercial space and housing is recovering at a better rate than that of nation as a whole.  While we're glad for our good fortune, we hope that the rest of the country also gets some more positive news on homes selling and commercial space moving again soon.
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Colorado's foreclosure rate is falling

02-23-09
Stuart Dobson
Colorado Foreclosures are falling!

According to a report just released today, statewide foreclosure activity in Colorado has fallen for the first time since data was collected in 2003.  Moreover, the Colorado Division of Housing reported that there were 16 percent fewer completed foreclosures in 2008 than 2007.  We have bottomed, and are recovering.  Especially on the sub $250k end of the market, it is really moving pretty quickly.  The upper end, above the FHA limits at $417k are still having trouble, but you can see the 'groundswell' of activity that is coming.

It just shows that the markets are never as bad (or as good) as the mainstream press makes them out to be.  The market bottom here overall, was probably achieved early last summer.  The bad economy will still have a negative effect on the foreclosure rates, but it sure is nice to see the concrete data that they are finally falling for a change.

Colorado always seems to be a leading indicator when it comes to the rest of the country for housing related issues.  We didn't have as much as a run up in prices as some other real estate markets (AZ, FL, NV, CA), and we entered this foreclosure cycle early, but it seems we are coming out of it early as well. 
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