2025 Market Facts VRP - Flipbook - Page 106
98 | ECO NO MI C PRO FI L E & MA R K ET FACT S 2025
COURTESY KEYS COMMERCIAL
The exterior of the 93,000-square-foot office building at 2655 W. Midway Blvd. in Broomfield.
REAL ESTATE AND CONSTRUCTION
Rollercoaster ride real-estate
trends roll on
Painting with a broad brush when attempting to characterize the local real estate environment appears increasingly to be a fool’s errand, as
conditions across building types and geographical submarkets are quite
divergent.
On the residential side of the equation, interest rates available to homebuyers remain higher than has been normal in recent decades, creating a
situation in the Boulder Valley and Northern Colorado in which median
home prices aren’t rising as rapidly as had been the case and in which the
gap between what sellers think their homes are worth and what buyers are
willing to pay is widening. Active listings are up across much of the region,
but deals are often taking longer to complete and sellers are more likely
to be forced to make concessions that would have seemed ludicrous a few
years ago when multiple offers and bidding wars were the norm.
Single-family homes in the Greeley-Evans market, the most affordable
submarket in the region, sold for a median price of $442,000 in April, 1%
higher than April 2024, according to data from Loveland-based multiplelisting service Information and Real Estate Services LLC. In Boulder, the area’s most expensive submarket, the median April sale price was $1,302,000,
down 18.3% from last year.
Residential real estate developers say they face rising headwinds on a
number of fronts such as access to labor, regulatory hurdles and increased
costs for materials as a result of supply-chain issues and tariffs. And yet, developers continue to apply to municipal planning departments throughout
the region to build new apartment complexes and single-family neighborhoods.
Certain types of commercial real estate — suburban retail properties
and small medical facilities, for example — have proven remarkably resilient in the post-COVID-19 environment, while others — office buildings,
most notably — remain stubbornly problematic for tenants and landlords.
Office vacancy rates, which have consistently hovered near 30% in
Downtown Boulder, are particularly troublesome in central urban cores,
where shops and restaurants rely on day-time traffic from office employees,
many of whom have not returned to full-time, in-office work.
Many suburban office parks face similar problems as tenants give up
their office space when their leases are up or downsize to smaller spaces.
At Broomfield’s largest office park, Interlocken, vacancy rates are in
the 36% to 37% range. Lumen Technologies Inc. put its 55-acre corporate
campus in Interlocken up for auction in April with a starting bid of $6.5
million but failed to secure a buyer.
Property owners and economic-development leaders in Northern
Colorado and the Boulder Valley are exploring redevelopment and adaptive re-use opportunities at under-utilized office buildings, while many
landlords are investing significantly in building amenities such as fitness
centers, conference centers and restaurants to make their properties more
attractive places for employees to spend their time.
The sluggish office market could be a boon for opportunistic investors
looking to snatch up undervalued properties. For example, Real Capital
Solutions, the Louisville-based real estate portfolio company run by Marcel
Arsenault, said it has been “advancing its nationwide investment strategy
with an aggressive acquisition spree” throughout 2025, and plans to spend
as much as $1 billion on distressed real estate assets in 2025.
