Valley due for commercial surge?
November 11, 2005
For better or for worse, the Roaring Fork Valley has become quite a twinkle in the eyes of national chain stores.That interest is helping line up the Aspen-to-Parachute area for unparalleled commercial development over the next few years, according to two local experts in commercial real estate.Craig Rathbun and Mark Wyman of Coldwell Banker Commercial Fleisher Co. said the population of the region has reached the critical mass necessary to trigger the interest of national restaurants and retailers. The opening of Target, Lowe’s and other national retailers at Glenwood Meadows this fall is just the beginning of the trend, not the end, Wyman said.”It will be easier and easier with the passage of time for them to justify coming here,” Wyman said. “Before, there weren’t enough rooftops.”Rathbun said the expected explosion in commercial development shouldn’t come as a surprise. Commercial development always follows success in the residential market.The population and housing development has soared in New Castle, Silt, Rifle and Parachute. Pitkin County has set real estate sales records the past two years, breaking the $1 billion barrier.Second homes throughout the area are getting used more often, creating more demand for services and workers. When more architects, lawyers, landscapers and plumbers are needed to serve the second homes, they create demand for more teachers, cops and cashiers at grocery stores. That supply of people has produced demand for more commercial services.”There’s a lot of commercial development getting ready to take place to accommodate the residential development that’s already taken place,” Rathbun said. “Right now we’re at the leading edge of that growth curb.”The observations of the commercial real estate agents dovetailed with what Willits developer Michael Lipkin has discovered recently. Lipkin is starting to develop what will eventually be 450,000 square feet of retail shops, restaurants and offices, topped by residential lofts, in the Willits Town Center.He is filling the commercial space in the Triangle Loft building, which will open next year. The interest national retailers have shown in western Colorado has exploded in the past year, Lipkin said.Parts of the service industry – such as plumbers, electricians and other building trades – are desperate for space, he said. Demand is also increasing for additional retail shops and restaurants. Demand is lowest, but growing, for office space.The commercial boom will spur infill projects in Aspen, Basalt and Carbondale on empty lots and it will usher in redevelopment of properties in the towns, according to Rathbun.On larger pieces of commercial property, Wyman expects to see more development anchored by a major tenant and surrounded by smaller stores. An example, he said, is the Carbondale City Market, which serves as an anchor for a variety of stores in its complex, including an Ace Hardware.Rathbun is so certain of the commercial boom that he’s beefed up his company to match the anticipated demand. He bought Fleisher and Co. from Don Fleisher two years ago and became affiliated with Coldwell Broker Commercial in August 2005 to increase his exposure with potential commercial clients outside of Aspen.Last month, Rathbun merged his firm with the Real Estate Specialists, a Carbondale firm that Wyman helped found. Wyman was recruited to head the combined firm’s Aspen office because of his broad expertise in commercial real estate sales and investments. The company also operates an office in Carbondale and will add one next year in Rifle so it can be involved in commercial real estate leasing and sales throughout the region.Highlights of Wyman’s and Rathbun’s assessment of the commercial real estate market include: An even greater interest among high-end shops in locating in Aspen. Exclusive stores that have only one of two shops in the entire U.S. are interested in locating in the town. “They want to do it right and very high end,” Rathbun said. He doubts that chains on the level of the Gap or Banana Republic will be interested in subsidizing an operation in Aspen any more for the sake of strategic placement. Snowmass Village begins its ascent among the elite resorts. The construction of Base Village by the Aspen Skiing Co. and partner Intrawest coupled with the sale and redevelopment of the Snowmass Mall and Snowmass Center will create some uncertainty in the town’s commercial market. Niche will develop as Base Village matures, Wyman said. The sale of fractional-ownership condominiums will introduce new people to Snowmass Village and interest them in single family homes, sending house prices soaring. Basalt will continue to capitalize on the steady trend of businesses relocating downvalley. The latest move is by Aspen architect Harry Teague, who plans to construct a residential and commercial building in excess of 8,000 square feet in Basalt and relocate his firm there. Wyman said the commercial vacancies are low in Basalt, and sales and lease rates are climbing steadily. Even less popular locations “are gaining traction.”Willits is poised for success because of its location right off Highway 82 and the growing residential base that surrounds it. “It’s a bit of an enigma to me,” Wyman said, explaining that he didn’t know why it hasn’t developed faster. Carbondale’s tussle over the Crystal River Marketplace property 18 months ago ended with questions about how that major commercial property will be developed, but it also sparked decisions to revitalize the downtown. The town governments partnership with the private sector to enhance downtown and provide initiatives for development has brought the biggest influx of investment capital to the core that Wyman has seen in 13 years in Carbondale. Now the town is turning its focus on how businesses in the Highway 133 corridor will function. The lower Colorado River Valley can simply be described as a “boom town,” Rathbun said. Oil and gas production is fueling a lot of the growth, but the area is also benefiting from retirement of baby boomers. Commercial development is booming to meet the demands of a rising population.”There’s a lot of speculation going on, I think, by amateurs. Those are the guys that, as soon as there’s a hiccup, are going to get hammered,” Rathbun said.Scott Condon’s e-mail address is email@example.com.