Commercial real estate market still slow
Cortez area has avoided wild swings in value, Click says
An influx of new business has brought a wave of construction to Cortez but has left the commercial real estate market largely unchanged.
Although the market has slowly improved since 2009 when no commercial properties were sold in the county, it’s still slow. During 2013, 10 commercial properties sold; so far this year, about eight smaller commercial properties changed hands. Those properties ranged in price from $99,000 to about $200,000. In the past year, there have also been a few large commercial land sales.
“The area is very slow-growing,” said Carol Click, the incoming president of the Four Corners Board of Realtors.
But the real estate market hasn’t experienced the same sharp increases and decreases in value that other areas have, she said.
Currently, there are 36 commercial properties for sale in the Cortez area, ranging from a bed and breakfast to the building that Aaron’s currently occupies. Nine of those listing include an operating business. A bed and breakfast, an RV park, a mobile home park a motel, and three restaurants are among them. This data only includes those properties and businesses on the multiple-listing system used by realtors, she said.
Much of the new construction has been clustered close to Wal-mart, and this is somewhat to be expected, according to Joe Keck, the director Southwest Colorado Small Business Development Center.
Many business owners try to locate their buildings along major highways with good visibility around a community anchor.
Some communities have tackled vacate commercial real estate by instituting a development authority and designated a portion of property tax revenue to improving a certain areas in a town, he said.
Cortez has seen some growth in the downtown area without this particular incentive. New businesses that have come to downtown Main Street in last year including Flat Belly Organics, The Shear Shack Salon, KB Insurance Group, The Flipping Frog The Geeks and San Juan Coffee.
But the area still has room to improve its branding and the general awareness of the many small businesses, Keck said.
“In downtown, there is more going on then you recognize when you drive by. You aren’t seeing any of it because there is so much of it,” he said.
In addition to seeking out high traffic lots near community anchors, the cost of remodeling can discourage business owners from moving in to empty buildings.
“A lot of our buildings are old and take more money to refurbish than it does to build,” Click said.
In some areas, proactive landlords take the lead on revitalizing business districts, Keck said. Mitchell Toms, the general partner in Montezuma Partners LLC and Cortez Partners LLC, has done in this Cortez, he said. These two companies own the buildings from Sol Pizzeria at 2 West Main St. to Pepperhead at 44 West Main St.
Toms decided to invest in Cortez commercial real estate in 2007 and worked with his potential tenants to refurbish buildings based on their suggestions.
“If you want to show lively economic growth, you start working really hard with owners,” he said.
He was also able to take advantage of the low interest rates and the availability of contractors. He estimates the available labor helped cut the time to remodel in half.
There was no set plan for the block when he started and he gives the credit the creativity of the business owners the success.
“One possibility led to the next possibility,” he said.