Local commercial real estate market is evolving

Before the coronavirus pandemic, the commercial real estate market in Niwot and surrounding communities in Boulder County was robust. While some properties such as the former Colterra restaurant have remained visibly vacant, generally the commercial market here sees low vacancy rates and high demand.

The Courier checked in this week with Jim Ditzel, co-owner and founder of Summit Commercial Brokers in Niwot, for an update on the local commercial market.

Summit Commercial is a full service commercial real estate brokerage and management company. Ditzel started the company with partner Tim Conarro five years ago, after living in Boulder for 32 years, some of those spent working as a journalist for publications such as The Daily Camera.

Ditzel said, "Our generation has not had to deal with a major social disruption like this at all in the course of my life, and I've been around a long time."

The commercial real estate sector moves slowly, generally following the residential market. While some of the early impacts of the coronavirus were intense, the effects are still not fully clear. "So the market is evolving," said Ditzel. "That's really what it is, it's evolving."

Commercial real estate can be broken into five rough categories: office, retail, industrial, hospitality (such as hotels), and multi-family (five or more households in a building). Ditzel works mostly in the first three, and said each category has seen a different impact from the economic and social consequences of the pandemic.

The hospitality sector, Ditzel said, "got pulverized" by the pandemic.

In the three categories most covered by Summit Commercial, the changes have been less extreme, although "retail has slowed dramatically, and office is changing tremendously."

Not everything is doom and gloom, however. "The most active and probably the best category right now is industrial," said Ditzel.

Industrial is also the category with the largest amount of square footage in the Niwot, Gunbarrel, and southwest Longmont area, around 5.5 million square feet (compared to 4.3 million square feet of retail and only about 2.9 million square feet of office space).

Ditzel is currently brokering deals for two notable local Niwot spots, 201 Murray St., the former Excel Electric building, and 7916 Niwot Rd., the restaurant space occupied by the now-closed Lucky Pie.

"The Excel Electric building is going to be totally re-leased. We have leases we're negotiating right now for the whole thing," said Ditzel.

Before the pandemic, "open office areas were gaining in popularity, but now there's all the fear around spreading the COVID that there's all these walls being put up and barriers," said Ditzel.

"One would think closed offices may come back," said Ditzel, but it's too soon to say.

The future for the Lucky Pie space is more uncertain, as "the restaurant market is just so tenuous." Regardless, Ditzel said there is current interest in the space.

The word that Ditzel kept returning to throughout the interview was "evolving."

"There are a lot of big creative ideas that will come out of this, but right now it's still just evolving.

We're gonna work together, we're gonna figure out how to do this and we will evolve and adapt."