Commercial real estate slows a bit in the valley
EAGLE COUNTY — Real estate stories are usually about residential areas — that’s where most of us live. But most of us work in commercial areas. That market is facing a few mild headwinds.
According to a recent report from NAI Mountain Commercial, vacancies are ticking up in Vail, Avon and Beaver Creek. Still, the vast majority of storefronts and office spaces are occupied.
Lease rates in Vail Village for retail space have passed rates charged in 2007, the peak of that decade’s boom years. In Lionshead Village, lease rates have finally exceeded their previous highs. Rates in Avon, Beaver Creek, Edwards and Eagle-Vail still haven’t returned to their boom-years levels.
NAI Vice President Erich Schmidt said the minor increase in upper-valley vacancies comes in a still-strong market.
“We’re still doing deals,” Schmidt said.
Possible store closings
But the vacancy numbers in Vail and Avon could see a spike in the coming months as Sports Authority stores in both those towns may close in August.
While Dick’s Sporting Goods representatives have talked about taking over some of those locations, Mike Pearson, the managing broker of NAI in the valley, said he doesn’t believe Dick’s will take on the stores here. The Vail and Avon Sports Authority stores did a lot of ski and gear rentals, something Dick’s doesn’t do in other locations.
If Sports Authority’s Vail location closes, Schmidt said he doesn’t expect that vacancy to have much effect on the overall commercial picture there. Avon is a different story.
Sports Authority there leases roughly 30,000 square feet of space in the building that originally held the Wal-Mart store in Avon. Given that the space next door, last occupied by Office Depot, remains vacant two years after that store closed, filling the space could be difficult.
Commercial spaces still strong
While the vacancy rate is higher in the western valley is higher than in the areas in and near the resorts, Pearson said there’s some real strength in that market.
Much of that strength is in commercial, not retail, space. Much of the activity these days is thanks to construction and similar companies.
“All the upper valley stuff is gone,” Pearson said. “There’s a lot of light industrial activity right now.”
There’s also a good bit of investment buying at the moment, Pearson said. “Anything that has current income has a lot of interest,” he said.
A good bit of that interest is coming from outside the valley, Pearson said.
“Groups that were pushed out of bigger markets — like Denver — are looking at tertiary markets,” he said. That includes Eagle County.
While the commercial market may have a hiccup or two, and while the volume of deals pales in comparison to residential real estate — which is recovering after a slow start to the year — the market seems to be maintaining its strength for the time being.
“Activity is up, and there are a lot of transactions,” Pearson said.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller @vaildaily.com and @scottnmiller.
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