‘Finally’ is the collective word coming out of the commercial real estate world. Finally some movement on leasing activity, finally some sale transactions taking place in commercial real estate, finally some financing becoming available. The past three plus years have been a tough run for anyone involved in Commercial Real Estate. 2011 has brought renewed optimism and excitement to this sector of the real estate marketplace. In the South Metro area we have seen many of the same gyrations the rest of the Colorado market has experienced in the past three years. Following the Lehman Brothers collapse in the Fall of 2008 we saw lease rates dive, vacancy rates increase dramatically (especially in retail) and financing all but dry up for two and a half good years.
With an economic recovery well under way we are now seeing slow recovery in commercial real estate… vacancy rates are decreasing, trailed by the leveling of lease rates (they’re not diving any longer) and trailing well behind the lease rate recovery is the leveling of property values. Sometimes even given these changes the market doesn’t accept improvements and as such the bid-ask gap remains fairly wide, that is the expectation that buyers/tenants have (the bid) and the price the Seller/Landlord is seeking for the property (the ask). This gap was very wide in early 2010 and has slowly improved over the last several months. The length of this downturn and the compressed lease rates and subsequent deals that could be found has fostered a “steal the property