Although Fort Collins is supported by several highways providing ready access across the region, the large scale distribution market is small here. Flex space makes up 30% of the inventory, three times the national average. Flex space makes up nearly 50% of the stock in the neighboring Boulder metro (behind only San Jose nationally), and both metros have a roster of high tech R&D firms that drive demand for flex space.
Warehouse and distribution (logistics) vacancies remained razor thin moving into the start of 2019, and haven't topped 4% since 2011. The flex vacancy rate remains somewhat elevated. Well over half of the vacant flex space in the market is located at the revamped four-building 811,000 SF RockyMountain Center for Innovation and Technology. Encouragingly, Lightning Systems signed on for 45,000 SF in 17Q2 in a space that will house its new headquarters, representing the first major lease signed at the campus since Agilent vacated nearly a decade ago.
Developers have finally responded to years of exceptionally tight conditions: The amount of available under construction space edged over 200,000 SF in late 2018, eclipsing an earlier cyclical peak by a factor of two. The vast majority of ongoing speculative development is logistics space.
Wal-Mart’s regional distribution facility accounts for a full 50% of the metro’s large scale distribution inventory. In general, large regional distributors across the Colorado Front Range set up shop in the Denver metro.
Rents posted their strongest annual gains of the cycle in 2018, bucking the slight moderation ongoing nationally. Investment volume set a new all time record in 2017, edging over the $100 million mark for the first time in history. In 2018, investors followed that up with the second largest dollar sales volume total in metro history.
(information provided from CoStar)