CREJ

March 2021 — Office & Industrial Quarterly — Page 19 www.crej.com The High Country Beverage building in Johnstown at 2534 is being expanded to help meet growing demand. INSIDE Market updates PAGE 20 Development outlook PAGE 26 Investment trends PAGE 24 E-commerce propelled Denver’s industrial market in 2020 and that’s not changing Where Denver stands in terms of industrial development, supply and demand For a variety of reasons, multiuse logistics assets are now a highly sought-after subclass March 2021 L ast year was a struggle for most people, either physi- cally, financially, psychologi- cally or some combination of all three. Vaccines are being rolled out nationwide, however slowly. 2021 should deliver a gradual return to normal but, according to our new president, not until Christ- mas. So, 2021 still will be challenging for individuals and their families and businesses. (At least we are not in Texas!) In this article I will detail how the industrial and office markets per- formed in Larimer and Weld counties in 2020. The industrial market in Larimer County was very strong. Vacancy rates increased but still average only 4.4%. Lease rates grew another 2.5% to $10.18. That lease rate is skewed by larger leases at lower rates. If you are looking to lease industrial space under 20,000 square feet, it is difficult to find a base lease rate below $12-plus triple net. Almost 400,000 sf of new construction was delivered to the market in 2020. Larimer County had only 63,000 sf of negative net absorp- tion, which is an impressive number given the almost complete economic shutdown from mid-March through the end of May and all the new con- struction. New construction will be just as strong in 2021 and demand does not seem to be slowing. Larimer County industrial sales set a record of $160 million for approxi- mately 2 million sf of improved prop- erty for the year. The average sale price for Larimer County reported by CoStar was $83 per sf. Three notable sales occurred that were significant and skewed the average sale price dramatically. Building 4 at Centerra Industrial Park in Loveland was completed in 2018. It consists of 122,807 sf and was leased to Amazon on a 10-year contract in 2020. It sold to an inves- tor for over $32.6 million ($266 per sf.) Two other sales were on the oppo- site end of the spectrum: 815 14th St. SW in Loveland, the former Agilent Campus, now referred to as Rocky Mountain Center for Innovative Technology, and 3800 N. Wilson Ave., the Woodward Governor Loveland Campus. Woodward was purchased by Martin Lind’s Water Valley devel- Please see Page 30 Joe Palieri, CCIM Senior adviser, NAI Affinity 2020: A tale of diverging markets in Northern Colorado