Grand Junction's commercial and industrial real estate industry is in the midst of its best year in a decade as a diverse array of companies look to move to or expand in the Grand Valley.
Commercial sales through the second quarter of 2018 are the highest since the same period in 2008, just prior to the when the most recent recession hit.
Coldwell Banker Commercial broker associate Dale Beede remembers what happened shortly after in 2009 when the market stalled.
"I remember that year very well," he said. It was just tough to get anything to happen."
But the market seems different this time around, with steady growth since 2016 and a diversity in industrial businesses that is leaving the Grand Valley less reliant on oil and gas and its boom and bust cycles.
While 2017 was a steady year with about 500,000 square feet of commercial and industrial real estate either sold or leased, 2018 is shaping up to be even better.
"It's moving forward at a similar pace," RE/MAX real estate associate Ray Rickard said.
Rickard added that in the past, the majority of industrial real estate went to the oil and gas industry. Now, little to none of the leasing and sales have been in oil and gas.
"The economy has returned, there are very strong indicators of growth and oil and gas has not really come back," Bray Real Estate commercial broker Brian Bray said. "There really is good activity as far as development goes."
The industries in Grand Junction and the surrounding areas have diversified, according to Robin Brown, executive director of the Grand Junction Economic Partnership. Brown said tech companies have carved out a niche, but no single industry has separated itself.
"It's feeling very diversified," she said.
One possible lure to the valley is the relative low prices compared to the Front Range, where the marijuana industry has driven up the costs of industrial retail spaces to around $20 per square foot. In Grand Junction, it can be around $3 to $5, according to Beede.
Coldwell Banker Commercial broker associate Brandon Schuette said he's also noticed this trend.
"I've had several calls from people who are trying to get out of Denver," he said. "The marijuana industry is squeezing them out."
Grand Junction's ability to market property as part of an opportunity zone could also be a big draw for those interested in developing in a more rural area.
Opportunity zones were part of the 2017 tax bill that creates tax incentives for investing in low-income and rural areas.
"That is huge aspect of having this economy grow," Bray said.
Beede said Coldwell Banker Commercial is listing about 150,000 square feet of commercial and industrial real estate. There is a variety of retail space available and different sizes of industrial and commercial space. However, office space is becoming limited, especially downtown. Coldwell Banker Commercial's real estate listings range from 3,000 square feet to more than 25,000 square feet.
"We would have maybe a four-month supply if you treat it like we do with housing," Beede said.
Typically this would lead to a building boom. And while building is occurring, the drawback is that rising construction prices make it significantly more expensive than buying or leasing existing property.
Both Brown and Rickard noted there is an increasing demand for "Class A" office space, which is limited in Grand Junction. Class A offices are newer buildings located in prime areas that typically fetch a high price.
The difficulty in building new office space to this quality could be a drawback, but Brown hopes that some local building owners will invest in updating their properties to Class A standards.
Despite the difficulties in building, commercial permits have increased slightly each year since 2015. Residential permits started to spike in 2016 and Bray said the commercial market typically lags behind residential one to two years.
"Every indicator out there says this a great opportunity," he said.