Space to be had in Aspen
ASPEN, Colorado ” Downtown Aspen’s commercial and office space is becoming increasingly available as storefront vacancies continue to climb and many landlords don’t lower their rents.
That’s according to industry observers, tenants and commercial brokers who operate in the somewhat underground world of Aspen leasing.
Lush Cosmetics, located at 535 E. Cooper Ave., is the latest to pull up roots here. Sources say the owners decided not to renew their lease, which expires at the end of September. The building’s landlords, Andy Hecht and Ron Garfield, are reportedly asking $150 a square foot for the high-profile space near the gondola.
But whether that kind of space can command that kind of rent remains to be seen.
“Prices that landlords were looking to get they won’t get,” said commercial broker Ruth Kruger, adding she is telling potential retailers that they won’t get a good deal but “they’ll get a great space for a good price.”
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Commercial broker Bob Langley said unlike in years past, it’s difficult to know what market price is for downtown rents.
“There is no reasoning with the market because no one is making deals,” he said.
But one thing is for certain ” commercial brokers are busier than they’ve ever been before trying to fill empty or potentially empty space.
Brokers say there are between 24 and 30 available spaces, or could be available because landlords are willing to let their tenants out of their leases. Many downtown leases expire in October, and several businesses are currently renegotiating with their landlords, while some have decided not to extend but are still open for business, said commercial broker Karen Setterfield.
“If someone walks around town and counts vacant spaces, they’ll count a handful,” she said.
The retail space of Stefan Kaelin, 516 E. Durant Ave., is closing for good. The building’s landlord, Stephen Marcus, said letting the Kaelins out of the lease was mutual. It will remain empty until a broker can find a suitable tenant, Marcus said.
“In the old days, I would have rented that six months [before they left],” he said, adding the Stefan Kaelin space is the only one out of 24 that he controls that’s vacant.
“All of my tenants are in place,” he said.
Marcus said he hasn’t had many requests from tenants to give them relief from rent but “would do what needs to be done” if it became an issue.
Terry Butler, owner of the Residence Hotel and chair of the Commercial Core and Lodging Commission, said she has talked to several retailers who have asked their landlords to give them rent adjustments or reductions, as a result of dismal sales over the recent ski season.
“I hope they step up to the plate,” Butler said of landlords. “Even one month’s rent, it would turn everyone around.”
Brokers say while the tenant-landlord relationship remains private, they have heard of some landlords reducing rents when leases are being renegotiated.
What’s more indicative of Aspen’s failing economy is the amount of office space open. Langley estimates that there is about 31,000 square feet of office space available downtown.
“I don’t think I’ve seen more than between 5,000 and 6,000 square feet available,” he said of the 20 years he’s been a commercial broker in Aspen.
The current conditions represent about an 8 to 10 percent vacancy rate for leasable office space, Langley said, estimating there is between 500,000 and 1 million square feet of space throughout the downtown area.
“This is the time to rent, you can drive a deal,” he said.
Other brokers are speaking the same mantra, and say the marketplace is booming with potential renters looking to break into Aspen’s business landscape.
“It’s very active,” Kruger said. “There’s a lot of space and a lot of people looking.”
Kruger said the commercial vacancy rate in downtown Aspen is about 8 percent, which is better than most resorts currently and about the same as 2001 after the Sept. 11 terrorist attacks.
Based on interest from potential tenants, Kruger said she believes downtown Aspen will bounce back faster than it did after 9/11.
Setterfield said the current climate appears worse than 2001 but she said she is optimistic.
“I’m working with a lot of retailers that want to come here … there’s more people looking to come to Aspen than I would have expected,” she said. “I think the vacancies will get absorbed in the next year.”
Kruger said there are some existing tenants who are looking at different spaces in an effort to improve their situations either with rent or location.
“It’s really a smart time to make a move,” she said.