Realtec Report Q3 2021

Q3 2021

Northern Colorado's Industrial Market is Maturing

Northern Colorado continues to be one of the fastest areas for population growth in the United States. Larimer and Weld County were among the three fastest-growing metro areas in one of the nation’s fastest-growing states over the last decade. Weld County grew by 30% and Larimer County grew by 20%.

Due to its continued population growth and close proximity to major arterial roadways, the epicenter of Northern Colorado has proved to be a successful distribution location for companies such as Walmart, Amazon, Coca-Cola USA and High Country Beverage. Over the past decade the amount of industrial space in Larimer and Weld County has grown by 4.6 million square feet, for a total of just under 42 million square feet as of Q3 2021.

Source: CoStar, U.S. Census Bureau, The Coloradoan

No Slow in Demand

The current vacancy rate among industrial properties in Larimer and Weld County is 3.8%, with an availability rate of 7.8%. Market rent has grown 6% year over year with a current average market rent of $10.71 per square foot, exceeding pre-pandemic market rents. Market sale prices topped $127 per square foot in Q3 2021, with an average market cap rate of 6.98%, historic low was 6.91% in Q4 2020. Sales volume in the past year reached $317 million, which is the highest annual industrial sales volume in the past decade.

In August, the 62,280 square foot warehouse at 840 Diamond Valley Parkway in Windsor sold for $8.1 million or $130 per square foot. Tenants at the property include Bold Renewables and Vestas Wind Systems.

The demand for industrial space has rebounded since the onset of the pandemic, where the area experience a lull in demand. 12-month net absorption as of Q3 2021 was 548,000 square feet which equates to a 7,400% increase from the prior period. As of Q3 2021, 1.6 million square feet of industrial space was under construction in Larimer and Weld County, with most of the new construction primarily taking place near I-25 and US 34. The majority of the projects under construction are speculative and will cater to larger tenants, seeking space for distribution centers or manufacturing.

Source: CoStar, CoStar News

Current Notable Industrial Developments in NOCO

Axis 25

4510 & 4550 Byrd Drive, Loveland, CO:

Class A industrial/flex campus, two buildings totaling nearly 200,000 SF
Building 1 – 100,580 SF
Building 2 – 95,114 SF
Consisting of 14 acres along I-25, near Crossroads Boulevard
Owned and developed by Etkin Johnson Real Estate Partners

Centerra Industrial Park

TBD Viking Way, Loveland, CO:

Building VII, comprised of 123,037 SF, is under construction, completion scheduled for Q4 2021
Building V completed in 2020 (122,807 SF – 18,221 SF available)
Building VI completed in 2020 (122,807 SF – 24,654 SF available)
Owned and developed by McWhinney

Iron Horse Business Park, 3607 Ronald Reagan Blvd., Johnstown, CO:

New Class A, 68,750 SF industrial building, completed summer 2021
85,000 SF of fenced outdoor yard
165-acre business park currently home to FedEx and Canyon Bakehouse
Owned and developed by McWhinney

4200 Ronald Reagan Blvd., Johnstown, CO:

91,000 SF speculative industrial expansion of preexisting High Country Beverage building
Completed spring 2021
Temperature controlled warehouse
Owned by High Country Beverage

Loveland Commerce Park, CR 30 & I-25, Larimer County: