Homebuilders aren’t buying as much land as they have in the past few years because of a soft market for new homes and a record supply of existing homes.
“Homebuilders have too much standing inventory,” said Mike Kboudi, a senior vice president of Fuller Real Estate who specializes in land sales.
Kboudi said building permits for projects will be up slightly from 2005, but more than a third will be for multifamily projects. Builders are focused on sites surrounding light-rail stations and on infill projects in central business districts and established neighborhoods.
“Most people who want to buy a house are already in a house,” Kboudi said.
He was among the experts who spoke to about 275 real estate professionals gathered Tuesday in Lakewood for the National Association of Industrial and Office Properties midyear real estate forecast:
Retail
Retailers either have to compete on price or provide a unique shopping experience, said Jon Weisiger, vice president of Trammell Crow Co. Lifestyle centers are replacing regional malls, and even big-box retailers are starting to provide the lifestyle concept.
“Belmar paved the way for mixed-use projects,” Weisiger said of the Lakewood center.
Those that are following include Landmark in Greenwood Village, the Orchards in Westminster, Bellevue Station and the redevelopment of the former Gates Rubber site.
Office
Decreasing vacancy and solid rental-rate increases are creating an environment that favors speculative development, said Nick Pavlakovich, an office broker with Cushman Wakefield of Colorado.
There are just three available 100,000-square-foot blocks of office space, but all are in buildings constructed before 1964.
“As construction costs continue to rise, it allows existing landlords to increase rental rates,” Pavlakovich said.
Industrial
With 11 million square feet of space leased or sold during the first half of the year, Denver’s industrial market is as strong as it has ever been, said Jim Bolt, an industrial broker with CB Richard Ellis’ Denver office.
Tenants are searching for a total of about 3.5 million square feet of space. Eighteen tenants are looking for about 80,000 square feet each.
Investment
With an average price of about $141 a square foot, Denver’s investment properties continue to attract a variety of investors from around the world, said Tim Richey and Mike Winn of Cushman & Wakefield.
“They like the price per pound,” Richey said.
Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.
Key issues for metro Denver real estate
LAND: Homebuilders are focusing on light-rail sites and infill projects in central business districts and established neighborhoods.
OFFICE: Decreasing vacancy and solid rental-rate increases are promoting speculative development.
INDUSTRIAL: Tenants are searching for a total of about 3.5 million square feet of space.
RETAIL: Lifestyle centers, such as Lakewood’s Belmar shopping area (above), are replacing regional malls; big-box retailers are buying into the lifestyle concept.
INVESTMENT: Foreign investors continue to find Denver an attractive place to put their money.
