Vail commercial space is rare; Sports Authority spaces in Vail, Avon are now leased
By the numbers
16,365: Square feet of vacant commercial space in Vail.
1.07 million: Square feet of available space in Vail.
97 percent: Occupied commercial space in Eagle-Vail, Avon and Edwards.
94.6 percent: Occupied commercial space in Eagle and Gypsum.
Source: NAI Mountain Commercial.
EAGLE COUNTY — There are a lot of differences between commercial and residential real estate. But in the Vail Valley, there isn’t much available in either category.
According to the most recent data from NAI Mountain Commercial, a firm that specializes in commercial real estate, Vail has the least amount of available space right now. In fact, the commercial space in Vail Village, Lionshead Village and West Vail is 98.5 percent occupied at the moment.
NAI Mountain Commercial Vice President of Brokerage Erich Schmidt said that occupancy level now includes the former Sports Authority space in West Vail. NAI didn’t broker the deal, but Schmidt said that space has been leased. What’s available now is “a smattering” of space around town, including some basement level space in Lionshead Village, and a small space in Solaris Plaza, Schmidt said.
Strong occupancy is normal for this time of year, Schmidt said. Spaces in prime areas usually fill quickly, and there isn’t much turnover.
Vail saw the biggest sale of commercial space in the third quarter of 2016 — $3.9 million. The Treetops building, roughly across the street from the Lionshead Village parking structure’s southwestern pedestrian entrance, once housed Vail Resorts office space. That building has been vacant for several years and was bank-owned. It was purchased earlier this year by Chabad of Vail Jewish Community Center.
Rabbi Dovid Mintz said the deal was a long time in the making, and that Chabad of Vail plans to use the buildings upstairs area for education and community events.
Since the space was bank owned and vacant for several years, Schmidt said the purchase price was “cheaper than what you’d normally see.”
Moving west, the company’s evaluation of the market in Eagle-Vail, Avon and Edwards shows a bump in the occupancy rate this fall, thanks largely to the announcement that Sun & Ski Sports is moving into the former Sports Authority space in Avon.
“That was a big absorption for that area,” Schmidt said, adding that Avon’s commercial area can be challenging, particularly when trying to direct a visitor to a particular store.
Being able to tell someone where a restaurant or a smaller retail shop is in relation to a big store can be an advantage to those smaller businesses, he said.
There’s a bit more space available downvalley. Schmidt said the biggest interest in space in that area is for contractor storage or units that combine warehouse and office space. That kind of space is filled from Edwards east, Schmidt said, so businesses are looking to the western part of the valley.
Businesses are also looking to buy space. Commercial financing is significantly different than residential real estate financing, but Schmidt said rates are similarly low for those looking to purchase.
That desire to buy drove a pair of deals in The Riverwalk at Edwards, with a pair of units selling in the third quarter.
“Businesses can control costs by buying,” Schmidt said.
And leasing rates have been rising. Rates in Vail have roughly equaled or surpassed rates in 2007, the previous high-water mark for rent.
Schmidt said he doesn’t believe lease rates will rise much more in the near future.
“People can only pay so much in rent,” he said.
Then there’s the fact that the retail market is evolving, due in large part to online buying.
While retail space is a challenge, Schmidt said he expects 2017 to remain busy.
“It may not be as busy as the past couple of years,” Schmidt said. “(National) market volatility is picking up a little.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org and @scottnmiller.