Interest in commercial leases, construction ticks up in Steamboat
May 5, 2012
Steamboat Springs — The physical evidence won't be visible for a little while, but there are increasingly positive signs of new activity in commercial construction and leasing as well as multifamily development.
Ski Town Commercial's Jon Sanders, who keeps close tabs on the commercial side of the local real estate and development market, said this week that he knows about a new build-to-suit warehouse planned for the city's west side whose developers hope to break ground in time for September occupancy.
One of the tenants would be a business new to Steamboat that should create a buzz, he added.
And the April 30 sale of a pair of bank-owned commercial units in The Steamboat Grand that never have been occupied promises a nice tenant finish job and a business at the base of the ski area.
Mitch Clementson, of Steamboat Real Estate Inc., represented the buyer in the $450,000 sale. He said his client is a Steamboat resident who will move an existing business to the Grand's commercial strip that fronts on Mount Werner Circle. However, he isn't ready to say more publicly. The buyer will occupy the smaller of the two commercial condos and put the larger back on the market for lease or sale
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Also in the Grand, the restaurant space formerly occupied by the Routt County Roadhouse is scheduled to close within 30 days, Sanders said.
Sanders and partners are seeking additional investors for a new 49-unit, five-story apartment building they would like to develop on the city's southern edge. Nationally, apartment buildings have become a strong asset class with attractive cap rates, he said. Cap rates are a simple mathematical formula — net operating income divided by the market value — that helps to place a value on commercial real estate.
"We can see that there aren't enough one-bedroom apartments in this market," Sanders said. "This building would complement the existing Walton Pond Apartments, which always have a waiting list in ski season."
The South Side Apartments tentatively would offer 36 one-bedroom apartments, 12 two-bedroom units and 52 parking spaces. The project has yet to go through the city planning process to get its entitlements, but Sanders expects it to need only one variance to the city development code.
The building would be built on a parcel behind the South Side Station convenience store and replace the existing car wash, Sanders said. The intent is to build an energy-efficient project, he said, and the upper floors would have ski area views.
The site also has quick access to the city bus and the Yampa River Core Trail.
In downtown Steamboat, Sanders said, lease rates have stabilized and are moving up from the rates they commanded one or two years ago of $21 to $22 per square foot plus rate bumps during the course of the lease.
"We're already into the bumps," Sanders said.
The two-story building at the corner of Ninth Street and Lincoln Avenue (906 Lincoln Ave.) was sold back to Wells Fargo in a foreclosure sale last week, but public trustee Jeanne Whiddon said Thursday that she had been notified to expect junior lien holder Mohammed Quraishi to deliver a cashier's check for $1.01 million to redeem the property.
A block west on the other side of Lincoln Avenue, there's a significant new commercial tenant in the second-story corner suite of The Victoria, Sanders said. Michelle Geib, of Xperience Days, has opened an office of her Internet experiential gift business there.
Xperience Days retails unconventional gifts at reasonable prices, including dining and wine tours of New York, Chicago and even the food carts of Los Angeles. Or, those shopping for people who already have everything can buy an opportunity to drive at speeds as fast as 145 mph in a championship stock car or view the Manhattan skyline from a low-flying helicopter.
Finally, city officials confirmed this week that a prospective buyer for the David Chase Rugs & Furniture building has begun the process of pursuing a change-of-use permit for the building at the corner of Third Street and Lincoln Avenue to allow a grocery store there.
The buyer is not the end user, and documents on file at the city do not reflect the grocery operator interested in the location.
The building originally was the home of Steamboat's City Market grocery.
And finally, Peter Van De Carr, of Backdoor Sports, said this week that he is close to closing on the purchase of his longtime location next to the city parking lot at Ninth and Yampa streets.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com