Vibrancy driving commercial interest
October 15, 2005
A sunny economic outlook paired with a national trend toward urban areas is helping fuel more buyer and investor interest in Steamboat Springs’ downtown commercial market, some Realtors and developers say.
Still, some cautiously speculate about whether there will be enough demand to absorb additional retail space planned or proposed for the downtown area.
Currently, residential and commercial interest downtown seems to be outpacing the supply, said Cameron Boyd, owner/broker of Prudential Steamboat Realty.
“There’s just a lot of activity downtown, and very little is for sale. … I’m really surprised with the amount of interest down there,” he said.
Although it takes time for some buildings to sell, others are snatched up soon after hitting the market.
The Alpiner Lodge, for example, was under contract soon after it was listed for sale in July. That contract fell through, but another is in the works, Boyd said.
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Hal Unruh, also a Prudential broker, deals exclusively in commercial property and also was a partner in the Waterside Village mixed-use project at Yampa and 11th streets.
All residential units in the recently completed development have sold, and developers are preparing to close on the final two commercial spaces.
Unruh was a bit nervous about how quickly the spaces would sell because the project is off the Lincoln Avenue corridor, and the mixed-use concept still is fairly new downtown, he said.
“We were gratefully surprised,” Unruh said.
It’s hard to pinpoint the various factors driving buyer interest, but overall, people have a good feeling about the economy and what’s happening downtown — more so than they did a year or two ago, he said.
“Downtown didn’t have the degree of vibrancy that it has now. … I think there’s also a perception that momentum will continue,” Unruh said.
Bill Moser markets and manages commercial properties in Steamboat.
He is less optimistic, mainly because of Steamboat’s volatile lease market.
Retail sale increases barely are keeping up with inflation, and that can put some businesses at risk even in a seemingly good economy, Moser said.
“My observation is that when business is not booming, some weaker businesses have difficult times, and it causes turnover,” he said.
What’s booming is Steam–boat’s real estate market, and appreciation is largely what’s driving buyer and investor interest in commercial properties, Moser said.
With one mixed-use project in the works for downtown and three others proposed, Moser and others can’t help but question whether there is enough economic demand to justify those plans.
Steamboat has a history of putting more commercial property on the market than can be absorbed in a few years, and developers tend to misjudge how fast they will be able to fill spaces, Moser said.
“They don’t realize we are somewhat isolated — Steam–boat grows more slowly than some of these areas closer to the Front Range,” he said.
However, in the case of mixed-use projects, the residential parts of the developments could help create more demand for retail, Moser said.
Jim Cook, who is involved in three planned and proposed downtown mixed-use projects — Alpenglow, River Walk and a project at the Harbor Hotel site — said developers will create demand for commercial space.
That means establishing a strong retail base with restaurants, small boutique-style stores and entertainment venues so people want to live and spend money downtown, he said.
Developers also have to attract successful retailers who prefer to be in downtown areas.
“We’ll be seeking them out,” he said. “You don’t wait for them to knock on your door.”
All residential units in Alpenglow are presold, and the retail units are “fairly well” leased out, he said.
— To reach Tamera Manzanares, call 871-4204 or e-mail email@example.com