Office buildings sprouting up all over
Its hard to pass through Glenwood Springs without noticing a flurry of office building construction on almost every side of town. New office buildings are under construction or recently completed downtown, midtown, in South Glenwood and West Glenwood.Could it be that the local economy, lately characterized by declining sales tax revenues, has perked up enough to support the amount of business real estate now rising out of the ground? The consensus among developers, owners and managers of commercial property, and others in the know, seems to be that the large amount of new commercial space entering the market is simply not a problem.I dont think its going to create a tremendous glut, said Glenwood Springs city planner Andrew McGregor. The new space can be expected to fill up quickly, because its viewed as more attractive and possibly more advantageous for business, he said. Then theres a lag when things tend to backfill, McGregor said, when theres an adjustment in the market. But the adjustment will probably only create a ripple in the rental market, he said.But Terri Knob, owner of Crystal Property Management in Glenwood Springs, said the ripple effect is minimal. Knob manages four established commercial properties, office buildings at 1410 20th St. and 2001 Blake Ave., and the Executive Plaza and Rite Aid buildings on Grand Avenue.Almost all the buildings I manage are full, Knob said. I think Ive lost one tenant. She said shes receiving two to three calls a week, primarily from people seeking smaller offices between 500 and 1,000 square feet.Knob said the new buildings havent had a major effect on the business rental market for two reasons: Owners of older commercial buildings, because they have a lower level of debt, can be more flexible with rents and arrangements. Some people are moving their businesses from their homes into a rental space for the first time.
At 201 14th St., just north of Glenwood Springs High School, a new office building is getting interior and exterior finishing touches. Known as Colorado Plaza III, the building is owned by partners David Harris and David Hicks. The three-story structure looks like its neighbor to the north, Colorado Plaza I, also developed by Harris and Hicks.Harris, who heads up the local office of Land Title Guarantee Co., said the top floor of Colorado Plaza III will hold six residential condominiums, and the first and second levels will each offer about 7,000 square feet of commercial space. The commercial space, he said, is already about 50 percent leased a law firm has already committed to occupy the entire second floor.Plaza I, completed in 2001, is nearly 100 percent occupied, Harris said.Some prospective tenants for Plaza III have specific requirements, while others are more adaptable, Harris said. But many businesses are looking for what is known as A space, in newer buildings with air conditioning, on-site parking, fiber optic Internet service, access for the disabled, high visibility to customers, signage and other such assets.Some of the businesses leasing spaces in Harris and Hicks buildings are leaving behind less desirable B locations without these amenities, while others are newly established businesses. Colorado Plaza I has a mix of about 50 percent new businesses and 50 percent existing, Harris said.
One prospective Colorado Plaza III tenant is the federal government, which currently leases offices on South Grand Avenue. The government is looking for 7,800 square feet of office space to house the local branches of the General Service Administration, the Federal Bureau of Investigation, the Internal Revenue Service and the Social Security Administration.The feds look at the facilities rather than the price, Harris said.Harris partner, David Hicks, owns the Penrose building at 27th and Grand, which was available for lease in May 2003. That building has fiber optic lines in every office, heated underground parking, street access and complies with the Americans with Disabilities Act.Hicks said the Penrose building, which has 20,500 square feet of retail and office space, has only 2,600 square feet vacant. Almost all the tenants have moved from other spaces.New space and A space has its price. The new commercial buildings around town are consistently more expensive than older spaces. But they provide more amenities, too.Harris said demand for space continues to be healthy. A medical group is shopping for a location, and in the last 60 to 90 days, business has picked up, he said.We have got a great deal of interest in everything we own, right now, Harris said.Harris and Hicks are optimistic about business in Glenwood Springs, and about the effect of all the new commercial space on business.Theres got to be infrastructure for people to build businesses, Harris said. A Front Range firm considering a branch on the Western Slope would find it easy to move here if theres space available, but might reconsider if not.I dont view this as us versus them, he continued. The more thats available, the better it is for business. Were not going to get the same occupants as Craig Helm.
Craig Helm, however, has a different viewpoint. Helm, president of Civil Constructors Colorado branch, manages a new commercial building in West Glenwood that he owns with relatives.Helms three-story, 18,000-square-foot building, the Riverside Professional Building at 273 Gilstrap Court, is empty except for the 4,000 square feet occupied by Civil Constructors. The quality of the construction throughout is a step above whats out there, Helm said, showing off the buildings high ceilings and marble countertops.There are two things that differentiate us from the other buildings that are available. First, were probably the best quality. Second, were right on the river. Im sitting here right now, looking at ducks. The river trail is all thats between us and the river.And prospective tenants can configure the building to their needs.But, with no leases in hand, Helm reduced his rents recently.I think the market has softened a lot in the last year and a half, Helm said. Frankly, Im a little amazed at the amount of commercial space. Long term, Im confident itll work out. Im a little concerned about the short term.
Perhaps the Riverside Professional Buildings distance from the commercial core and the courthouse is a problem. Maybe the active paradigm in Glenwood Springs commercial property is embodied in the old business adage: The three things most important for the success of a business are location, location and location.Other new buildings coming into the commercial market are all are within a block of Grand Avenue.WestStar Bank is making two contributions to the supply of available commercial space. WestStars new bank building, under construction next to Safeway on Grand Avenue, will have 4,000 to 5,000 square feet of office space upstairs, said Alan Collins, WestStar vice president for commercial lending. And WestStars current location at 1620 Grand Ave. will be vacant once the bank moves to its new location.Collins considers the new space to be very desirable with a view of Mount Sopris.Its got a million-dollar view, in my opinion, he said.Collins said the new building will also be desirable because it is tastefully designed in an architectural sense and energy efficient. He thinks the space will fill quickly.It has curb appeal, he said, borrowing a phrase from the auto sales business.
A new three-story building is also pushing skyward at 1605 Grand Ave., between the Van Rand Center and the Glenwood Springs High School football field. Peter Waller, of Klomhaus & Waller, builder of the project, said the building will be known as the Van Rand Professional Center.The commercial space will all be condominiumized sold to the occupants. Before breaking ground, the developers presold two of the three floors to three different businesses.Completion is expected in September.A new three-story commercial building taking shape at 7th Street and Grand Avenue is owned by Californian Douglas Cushman King. Doug Harr, the Glenwood Springs architect who designed and now is managing construction of the building, said it will have three apartments on the third floor, and the remainder will be commercial.Two ground-level retail spaces fronting on Grand Avenue will have additional basement space. A third retail space will be entirely on the first floor. The second floor will have two office spaces, one measuring 900 square feet and the other, 2,000.Though the building is nearing completion, none of the space has been leased. Harr said the building, which contains only rentals, has not been advertised yet.New properties, it appears, are in demand for their newness and the amenities they can provide. But to capitalize on demand, developers must consider location as well. Also, it seems that Glenwoods economy is vital enough to keep existing office buildings occupied to a healthy level, even with a surge of new properties on the market. Some businesses thrive with more amenities, while others need the lower overhead of an older building.Contact Jeremy Heiman: 945-8515, ext. email@example.com
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