LONGMONT — It is a small but cogent indication of economic recovery: For the first time in 31 months, the commercial vacancy rate in and around Longmont has dipped below 20 percent.
“I think it is (significant),” said Ken Kanemoto of Prudential LTM Realtors. “It indicates a trend. It indicates more people, more companies looking, and it shows up in the inquiries we’re getting and the (Longmont Area Economic Council) is getting.”
The LAEC recently compiled its real estate summary for the third quarter of the year, and it found about 1.975 million square feet of commercial space empty, or 19 percent of the total space available in the area covered by the council — identical to the geographic area of the St. Vrain Valley School District.
The vacancy rate for the third quarter of last year was 24.6 percent.
“It looks like in March of ’02, we were at 18.8 percent,” said Wendi Nafziger, LAEC vice president. By the second quarter of that year, the rate had already climbed to 20.4 percent, and it stayed above 20 percent until this past quarter.
The LAEC is seeing a significant increase in prospect activity this year over last year, Nafziger said, referring to companies interested in relocating to or expanding within the Longmont area.
To date, the council has worked with 47 new prospects, compared with 27 year-to-date in 2003.
“We’re glad to see this, finally,” said Kanemoto, who is also an LAEC board member. “Hopefully, it’s an indication of a trend that’ll keep going.”
For the second year in a row, this past week, the LAEC hosted a “real estate showcase,” during which approximately 60 invited brokers from up and down the Front Range took a bus tour around the Longmont area.
“We had an extended tour this year,” said Nafziger. “We went out into the southwest Weld County area this year, and I think people liked that expanded tour.”
The tour focused not only on the commercial space available but also on some of the retail and housing developments around the city.
Kanemoto, who participated in the showcase, said he thought that many of the metro-Denver brokers on board who weren’t that familiar with Longmont to begin with were impressed by what they saw.
“I heard that several times, and I think they feel like Longmont’s attitude — they were happy to see that,” said Kanemoto, noting that City Councilman Roger Lange and community development director Phil DelVecchio each spoke to the group.
He said participants appreciated the the city’s “attitude for helping out industries that come here.”
Real estate firm Trammell Crow was one of the sponsors of the showcase. Dan Bess, principal with the company, said Trammell Crow hosted the lunch for the group, which was served at the Longmont Technology Park, a property at the northeast corner of Nelson Road and Sunset Avenue that Trammell Crow manages and leases.
Bess said his company — which handles some 15 million square feet of retail, office and industrial space from Colorado Springs to Longmont — has definitely seen an improved commercial climate in 2004.
“I think there’s a definite uptick in activity, but we need a greater volume of deals to make a meaningful dent in the vacancy rate in Longmont and other metro markets,” said Bess. “But it’s positive; there’s positive news in the market today.”
The LAEC points out that Longmont — unlike other parts of the metro area — does not have a pure office market, but rather a mix of office and light industrial, or flex space.
Bess said that for the 1.975 million square feet in this area to be absorbed, certain economic trends need to occur.
“With Longmont in particular, we need to see an expansion in the manufacturing sector beyond the pace we’re seeing today, given that most of the space in Longmont is designed for that activity,” Bess said. “Once those jobs come back into the marketplace, you’ll see positive absorption of some of that space.”
Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at email@example.com.