Offices take the lead in commercial leasing front.
By Vicky Dorvee Editorial@LHVC.com
According to the 2019 Colorado Business Economic Outlook, published annually by the CU Leeds School of Business, Boulder County’s economy is robust and growing, outpacing state and national statistics. This fact reaffirms the tenor of upbeat local leasing experts.
The Niwot and Gunbarrel commercial leasing environment continue to be very strong. Being on the fringe of high-end Boulder proper, available office spaces don’t sit unoccupied for long, while the restaurant scene is experiencing spasmodic growth, and specialty retail shops are not gaining ground.
Office space — the inflow
Keith Burden of Burden Incorporated said he’s noticed an influx of Boulder tenants to the Niwot area. Green Alpha Advisors, an asset management company recently relocated from Boulder to Niwot Square at 263 2nd Ave. and at the end of July, KL Realty will be replaced by another former Boulder-based company, Altitude Integrations, an IT solutions firm. Just one office space is left in that building, and Burden said activity has been good, so he’s hopeful a tenant will sign on soon.
“We are getting a lot of interest from Boulder area office tenants who are finding Niwot attractive. Boulder is just getting crowded and rents are pretty high,” Burden said. “Property taxes have increased significantly which impact landlords’ and tenants’ bottom-line.”
Niwot’s 2nd Avenue saw other tenant changes. Left Hand Animal Hospital relocated to its renovated new home on Franklin Street, leaving its former 2,700 square foot space in the Niwot Emporium at 136 2nd Ave. available for office and/or retail users.
Storm Mountain Publishing, creators of Freeskier and Snowboard Magazines, previously occupying 137 2nd Ave., has moved its operations and will be leasing their space to new tenants yet to be disclosed.
One of Niwot’s most recognizable spaces, the former Niwot Tribune building at 198 2nd Ave., which was last a retail store, is now leased by the software company, 47Lining, an upstairs tenant in the same building. A restored version of the Tribune sign will be installed soon.
Property at 376 2nd Ave., where plans for a mixed-use development unraveled during the seven-month downtown Niwot building moratorium, continues to be on the market for either lease or sale.
There have been changes at the Cottonwood Square Shopping Center, too. Two healthcare businesses departed last fall when the owner-practitioners retired. Niwot Massage took over the tenancy of one of the offices, leaving an 842 square-foot space available for either an office or retail user, according to the center’s leasing agent, Tom Newman with WW Reynolds.
Another Boulder export, The Healing Collective, has set up practice in Cottonwood Square, which leaves a 540 square-foot suite as the last vacant office in the two-story building.
The only other available space within Cottonwood Square Shopping Center is a 2,600 square-foot east-facing location, for either retail or office use.
Newman said, “The momentum has been really good for the last few months for business, and the activity for vacant spaces has been really healthy.”
Offices in Gunbarrel are abundant overall, but spaces are not empty for long periods of time. Leasing agents were quick to mention the same scenario is taking place there, with quite a few ex-Boulder tenants relocating their offices because they’re finding rates at the city’s edge are more palatable, giving them more space for their money and preferable parking situations.
Dean Callan and Company leasing agent Beau Gamble said smaller spaces go quickly, but larger spaces are taking a bit longer to fill. Gamble said a few rare openings for professional office tenants are available at 5303 Spine Rd.
Restaurants — the flux and growth
Remarkably, Gunbarrel welcomed six new eateries this past year: Raglin Market, Morning Table, Fringe Pizza, Domino’s Pizza, Up-Dog Café, and Lookout Café. On the flip side, two have not survived and an additional restaurant also decided to call it quits. Lookout Café in the mixed-use Gunbarrel Center closed its doors just nine months after opening. Two Gunbarrel Shopping Center establishments, the relatively new Up-Dog Café and the more established Dannik’s Corner Bar also closed, but Colorado Group leasing agent Christian Smith reports there’s solid interest from potential occupants in both turnkey spaces.
In Niwot, the former Powder Keg Brewery on the corner of 2nd Avenue and Murray Street remains empty. Several leasing professionals mentioned the difficulties in turning the space into a full restaurant — the cost of a mandatory fire suppression system, code compliance requirements, and the need for kitchen upgrades. On a positive note, Dunraven Campers has rented the warehouse portion on the backside of the property.
Another distillery exiting Niwot, Bootstrap Brewery, is offering its building at 6778 79th St. for sale or lease through Summit Commercial Brokers as the operations of the business are consolidated to the Longmont location. Broker Tim Conarro said, if a tenant is found, an investor has expressed interest in purchasing the building. The ideal situation, Conarro said, is that a distillery offering food or a taproom will step in to occupy the 4,000 plus square-foot building.
Conarro’s take on the overall commercial market is that it is “finally getting better, but there are still more vacancies than we would like.” He cited the building moratorium as a factor in the slowdown of changes in downtown Niwot.
Last year, area real estate experts felt the absence of Colterra’s Restaurant on the corner of Franklin Street and 2nd Ave. was noteworthy to the discussion of commercial leasing in Niwot, because in addition to the patronage of town residents, the restaurant made downtown Niwot a destination for visitors and a draw for office workers. This year, there was a spectrum of speculation about what will happen next at the vacant corner, but nothing was confirmed by owner Bradford Heap as of press time. However, Heap’s latest project, the rebranding of one of his Boulder eateries, Wild Standard, will be unveiled this week as Pepper which will join his neighboring restaurant Salt on Pearl Street.
Retail –the dirge
For both small town America, as well as nationwide, retail shops have experienced a downturn. Only halfway through 2019, Coresight Research’s store tracker report stated that retail closures had exceeded all of last year’s number for U.S. specialty and chain stores. These numbers include big box stores like JCPenney, Macy’s, Kmart and CVS, all leaving the brick and mortar realm. New retail stores openings are down by more than 8% over the last year, according to Coresight Research.
Fly Away Home Décor in the Cottonwood Square Shopping Center is the lone new retail store in Niwot and Gunbarrel.
“In terms of Niwot, retail has been a tough sell, because of the traffic,” Smith said. “When we tour Niwot spaces with retail users that are typically used to Boulder proper, Old Town Louisville, and Longmont during the week, that area of 2nd Avenue is just very, very quiet.”
Smith predicts that because Niwot has old town appeal, more stores will make their way to the area. Both Louisville and Lafayette are also secondary Boulder markets, he said. Those areas have comparable rates to Boulder.
“If I try to surmise what will be the next two spots for retailers and office users to really target, I’d put Gunbarrel and Niwot at the top of the list,” Smith said.
Anne Postle, owner of several commercial properties in Niwot said, “The space that is used for office or services has been easy to lease, but retail is a huge challenge. In future projects, we are trying to carve out very small spaces that will work for a smaller retail tenant. For now, our future projects are on hold while we wait for the county to address the alley. The moratorium ended in April, but since no alley guidelines have been established, a large part of 2nd Avenue is still under the stranglehold of the moratorium.”
Gunbarrel Shopping Center is fully leased in terms of retail stores, but within the mixed-use development Gunbarrel Center, there is a variety of new retail space available for lease. Each of the units is ready for build-out, meaning the tenant will need to invest capital into the space to finish the interior of the space.
Feature courtesy of Left Hand Valley Courier – July 18th, 2019