Jen Taylor sits down with Mike Foster from Coldwell Banker Commercial Prime Properties to talk about what is happening in the Grand Valley commercial real estate world!
You can learn more about Mike and get his contact info at http://mfoster.cbcprimeproperties.com/.
Jen Taylor sits down with Mike Foster from Coldwell Banker Commercial Prime Properties to talk about what is happening in the Grand Valley commercial real estate world!
You can learn more about Mike and get his contact info at http://mfoster.cbcprimeproperties.com/.
The Full Circle Podcast, compelling interviews and incredible tales from Colorado's Western slope, from the mountains to the desert, Christi Reece and her team here from the movers, shakers, and characters of the Grand Valley and surrounding mountain towns that make the Western Slope, the place we all love. You'll learn. You'll laugh. You'll love with the Full Circle.
Jen Taylor:Hey, this is Jen Taylor with the Christi Reece Group. I am. How lucky am I joined by the illustrious local Maverick of real estate commercial real estate, specifically. Mike Foster. Welcome.
Mike Foster:Thank you for having me, Jen. It's it's good to be in your presence, virtually?
Jen Taylor:Yeah, virtually. Exactly. You're too. You're too nice. You're you shine from afar? I was trying to do a drum roll there, but it was the effect was lost. So yeah, we'll try again later. Hey, I want to thank you for joining us for this week's edition of, uh, of our podcast. Um, we love to interview local leaders and influencers in the Valley and, and tell your story. We want to, we want to put the shine on you for a little bit, so I hope you've cleared your calendar. Silence your phone for a little bit. I know you're a busy man, so, uh, we'll have to the world. We'll have to wait for you.
Mike Foster:Yeah, voicemail. There'll be plenty of it. There's always more of it. There's no doubt we could power the world on voicemail. We'd be set.
Jen Taylor:That's right. That's right. Hey, um, I've got a nice glass of tea. I'll be a slugging on that throughout our conversation. And, um, what, tell me, where, where are we talking to you from where, what, what's the view that we see there?
Mike Foster:Oh, wait. Well, that's my, uh, that's my office with the Navajo, uh, snow painting in the back and, uh, and half of a half of the grand Mason and half of, uh, the caucus region in Russia. So, so there you go, three things that are near and dear to my heart. Um,
Jen Taylor:Well, okay, so we're going to start out by talking about Mike Foster at large. So, um, tell us your, tell us your story in, in, you know, 30 minutes or less. We'll try and keep that part brief, but, um, we want to get onto some more like, you know, latest information from Mike Foster and leading information from the commercial real estate industry. But, um, tell us about how you, how you landed, where you are right now.
Mike Foster:Well, um, I grew up in Grand Junction, um, and then, you know, following high school took off and went out in the world for quite a bit of time, uh, a good 20 years or so. Um, spent some time, a lot of time in Denver fair amount of time, a little bit of time in Russia, a little bit of time in Jackson, Wyoming, um, some various places and always knew I wanted to get back to the grand Valley cause I had the Eucharist pretty bad and uh, eventually found my way back here in 2008, pretty much right, January. It's a top of the natural gas boom and a road that boom downwards like all, uh, dedicated Grand Valley people do. And then, uh, wrote it back up the next turn of the wheel, which has been population growth in the Valley. And, um, seeing my kids through school, I've got a son and a daughter, uh, middle school daughter, high school son and practicing real estate scan whenever I can out whenever I can.
Jen Taylor:So did the ski originate here in the Valley or was that a, was that part Russia part Jackson where all of the above,
Mike Foster:Oh, the skiing itself. Yeah, the skiing is, um, something, um, my family has been, was involved in, in the, in the mid sixties then 19 through the 1970s until the early eighties. Uh, there used to be a ski club kind of like we have with the Nordic club. So that used to be the way it was for the Alpine mountain. And that ski club decided that they really wanted to build a real ski area and a bunch of locals got together and sold a thousand shares of stock to local business people or whoever they could find the buy it. And then they got a small business loan from, uh, the SBA, the only time the SBA ever loaned money on a ski area and probably the last time they ever do it, but, uh, build two lists. Yeah. And they, they built, uh, my, my dad was a big part of it. Um, they built, uh, they, they cut all the runs and put in the lift and literally probably nine months, they, you know, once, once they got started, it just happened. Who did it? Wasn't a five-year planning process in the 1960s. They just hired, hired a lager, uh, you know, surveyed it, put the lift in and just went to town. So that was 1965 and we still have our local ski area. Um, another chair to happened in 73. And, uh, it was, uh, it was another company privately that did that, but, uh, it ended up being one scary and the end of the day. So that's, that's the story of Powderhorn real quickly.
Jen Taylor:There it is bits and pieces of that story. And I love that. Of course it was, it was the foster family. You guys still own some property up there on the Gand Mesa, do you not?
Mike Foster:Yeah, we do. We have a little bit of a chair too, and then some down in the base area, um, various things that went on, um, leftover parcels from grand visions of orthodontists and different people who wanted to take the ski area all the way to Utah, they could basically. Um, so it's interesting. Um, you know, and then, you know, down here where we're plugging away on our office, retail, industrial market, finding tenants couldn't build and stabilize building buildings, lots, lots going on in the commercial market, took a little bit of a step back, um, numbers wise in 2020, down about 28% on, on sales volume off of, uh, 2019. But if you have the two years, they still up over 2018. Um, so sales volume is pretty good. And 2021 is looking, looking promising, uh,
Jen Taylor:Same on the residential side. Yeah. We hear a lot of that. I know we don't get as much light to talk about the commercial side of things. So, so I'm going to, I definitely want to go back to that, but, um, I love kind of pulling a little bit more on, you're probably not one to sit and spin a yarn on, on some of those old stories and the lore of the grand Valley, but your family has so much, you've really had the needle in your hand stitching the story. So what, you know, as you talk about your skiing, your passion for skiing comes honestly and earnestly, um, do you guys have a place up on the Mesa? Do you,
Mike Foster:Um, we don't, we just, uh, yeah, I'm a big, uh, the commute has gotten a lot shorter. I really feel like the scary now is like driving the Fruita when it used to be as a seven-year-old w uh, the road through a plateau Canyon was probably twice as long in distance because there was probably twice as many turns in that Canyon when they originally built the road. And, uh, um, so now there is, it just feels like I'm hardly going anywhere to go scan, so it's just easy up, easy down. So, yeah. Um, but there's quite a bit going on up there. I mean, there's, um, there's definitely a pretty good plan in the works for some tiny homes, as you know, uh, um, some interest, I think in expanding some of the lodging, um, right at the base. I think there's some discussions about that fair amount of sales of, um, houses up there last year. So two years it's kind of taken off and, uh, yeah,
Jen Taylor:Lots are going quick and proper, you know, homes, cabins, second homes are going quick. And, um, some first time first, yeah. Primary residences for folks as well. So it's exciting. It's good. And more mountain bike trails being cut every year and a more of an investment into the year-round attributes of the river
Mike Foster:And really smart, you know, smart ownership on, uh, you know, the current, um, Andy Daley and the guards and, uh, Walton family, I believe, uh, have taken over. You know, Andy has done a really good job of focusing on what's important, you know, working on the, on the, on the quad, Katie, the detach quad, getting the snowmaking, that's a major upgrade on snowmaking this year to be able to ski at Powderhorn in what's been pretty bad snow year statewide. And right first week of a first, second week of December, we're skiing top to bottom with that incredible making system that doesn't use a lot of energy because you don't have to pump the water from the bottom to the top. Right. So it's
Jen Taylor:In grooming the snow, keep the snow in good shape too.
Mike Foster:Yeah. So that's, uh, they're smart. You know, there's been some past owners that really kind of came in and kind of could have done a detachable quad when they did, but they decided to make a brass rail bar and some other things as opposed to investing in the mountain. So
Jen Taylor:Exactly. I know. And we're all thankful for that, for sure. We've just, we've watched our resort. I've lived here for 28 years. Now. You grew up here with a 20 year hiatus, the missing years of Mike Foster. Yeah, exactly. Yup.
Mike Foster:You come back and it's, uh, it's different and it's the same at the same time. So great. That way,
Jen Taylor:Like a soap opera pick up right where you left off. Yup. Yup. We love it here. What, um, so what took you to Russia? Tell us about that.
Mike Foster:Um, I was, I had a archeological dig and it was Pakistan that I, I got a grant to go do with UNESCO and I got there and the Gorbachev que happened while I was in his back as Stan and I decided that I wanted to stay. And one of the group, um, one of the people I met there told me about an open teaching job. So I took a job teaching English, um, stayed through that year. It was my, uh, junior year in college. Um, and then finished college and went back to pursue some small time pursuits and exporting Russian climate shoes and ice axes and different things and importing, uh, polar tech fleece seconds into Russia sell, took the cottage industry there and, um, kind of immersed myself in, in Russian and got pretty good at it is it's not an easy language to master, but, uh, yeah, really enjoyed, uh, had a couple, two, three years and then came back
Jen Taylor:And your modern day life right now. How many people know that story about you?
Mike Foster:Oh, probably not many. Uh, it's kind of, it's a long time ago. It was the early 1990s. So time flies and things get in the rear view mirror. So
Jen Taylor:We take our detours in life and that's, uh, that's such, you know, adds such luster to our stories and, and, uh, by golly that's great stuff. So you were a junior in college, where did you go to school?
Mike Foster:Uh, undergraduate, uh, with the University of Wyoming for a year and then, uh, um, transfer to Carlton college. Great thing about the university of Wyoming was I got in state tuition because my dad was a graduate from there. And that's the fantastic thing about Wyoming. Um, they have that caveat. So in state tuition in Wyoming, it's quite a bargain, um, and then call it a college for three years. Um, and then did my graduate MBA at, uh, do you and things through the focus specialization in real estate,
Jen Taylor:In real estate. Oh, that's it. So we share that. So that was your graduate degree. That was my undergrad degree. I went to DU um, was in Denver for a few years. So you stayed on the front range for a little while there Colorado college, of course being in Colorado Springs. Did they program back then?
Mike Foster:Yeah, they had the block plan, um, way back then. Yes.
Jen Taylor:Yeah.
Mike Foster:Um, yeah. And so then it was mainly, uh, post-college, uh, post, uh, graduate school when worked at Jackson hall and their base village when they were building that out when they did the four seasons hotel, um, and various projects there, uh, they ran out of development rights, but, you know, at the end of that process, um, so I went back to Denver, worked in the home building industry for about eight years, doing land acquisition and development for major home builders. And then, uh, found my way back to grand junction following that.
Jen Taylor:And what year was that when you made your way back to the side of the divide?
Mike Foster:Right in, uh, January of 2008.
Jen Taylor:Got it. Got it. So that, yeah, that's a, what a great time to be coming back to, uh, continue focus on real estate. Yeah. The rebuild happens now at that point. That's right. Yeah.
Mike Foster:So, you know, you look at it, we think about 2014, we started having, uh, more people moving in the, moving out at that point. And then the rest is history since we've had this phenomenal population growth going on, driving other, other things and the university growing and the medical community growing and the demand that, that creates
Jen Taylor:The pillars of our, uh, our, our economic pillars. I think of them, um, visualize that quite often. And you just, you just hit two of the big ones. What, what do you think has been the major, I think driver or contributor in the Valley in the last four to five years that has, that has really kind of, you know, thrown us into this whole new, really national and international stratosphere.
Mike Foster:Well, I think once you start happening, you know, we're late in the national cycle and inevitably, you know, um, we had our housing, the nationwide housing recession, you know, Oh eight Oh nine or 10, and then the municipalities that had, um, the least amount of development, speculative housing recovered first Denver was one of those because it was having some gross growth constraints during the 2006, 2007. Boom. So they didn't quite have the same hangover that Vegas and Phoenix add. Um, some of those other areas where the speculation got pretty rampant. So those communities areas rebounded pretty quickly. And then the other areas that were really being focused on at that time were the major, major metros, like New York, um, San Francisco, Los Angeles, the core of the core, uh, that's where the money went back first and then w spilled on the secondary markets. And it took a while in commercial investment wise, um, and just, uh, even apartments for investors to start moving out of those areas and into, into tertiary markets like, uh, Western Colorado, or, uh, you know, other parts of the mountain West. And I think what's really interesting in the last year is when you think about Denver, a market like Denver or market like salt Lake, when they reach a point where institutional investors start taking over from private, large private investors. And what happens in those situations is the private investor sells an asset. That's an investment asset and can't replace it in that market. They, they can't go in and buy something else at the, at the yield that they want. So they they'll go up and down there. You know, Denver grows up and down I 25. So those investors will drive North or they'll drive South at and salt Lake they'll drive North on I 15 or South. And St. George up to Boise. So, and it's a little bit harder for that investment money to re to circulate down I 70, but in the last six months, what we've seen is the resort communities because of COVID and some other dynamics really in, in, in Colorado and other places really overflowing and having a lot of investors in those markets, um, say, okay, now I can not replace my investment dollars in Aspen or Vail or, or any of the resort communities. Where am I going to take my, my dollars? Am I going to take them to Denver? Well, I don't really like Denver very much. I, I w I want to, I want to keep my money in a kind of in my backyard and their backyard is grand junction or other areas that are nearby these resort communities. So now we're seeing a lot of, um, development dollars and other things happen in here, um, that are chasing, you know, the other phenomenon you had in your housing market in Denver and happened very quickly was when they were ready to grow, they still didn't have the infrastructure and infrastructure and the ability to, to produce single family houses in Denver. They had the same problem we're having now. They just had it five years ago, eight years ago, and then became the easiest way to do multifamily housing, who was the replacement for the inability to do single family. So now we're starting to see our market move to a multifamily market more. And, you know, for the first time we had 196 units all built in one fell swoop, uh, and, uh, and more to follow. So that's an interesting trend,
Jen Taylor:Right? I think, uh, at one point last in 2020, I heard a statistic that there were 3000 plus there's over 3000 multi-family units in either, um, planning, uh, development or permit, uh, or, or build stage. And, uh, and that's, that's the first time. And when would you say 30, 40, maybe even 40 years in grand junction since there's been that much of a, um, rush for multi-family enthusiastic.
Mike Foster:And you can, if you want to really want to look at an anecdotally, you can just look at the large multi-family projects. I mean, if you break it down in 1996 to 2000, there was, there was a 180 unit project bill that was strictly multifamily, not fourplexes, and those kinds of things, which aggregate to that 3000, but a big project, all money in one place. So there was one, and then there, and then 2006 and seven, there were a handful of 50 unit projects, a hundred unit projects for about three of them. And they got going in there and then there was a hard stop. So we went, we went 2001 to 2008, and then we went from 2008 to about 2017 before we had another major multifamily project built. So you get this pent up demand that's gets created, and it's hard to, it's hard to underwrite because when you look at the overall housing base, it's 1978, 79, 80, 80, 81, it was all built way back during, during some other resource booms that we had. And it's older products, it just can't rent at the numbers that you could automatically look at it and say, well, look at those rents, I can build a new product. So somebody had to pioneer it. And once we built who got 196 unit project, the rail yard rim rock, we've got another project over off the 24 and a half road. That's 150 units. And those reset the market, they, they, uh, create rental rates that we didn't know we could do. And now others are saying, Hmm, I think I can build a project. So it's, it's real interesting.
Jen Taylor:Yeah. He's got proof of proof of concept now. So it's, it's happening. It's exciting. We're starting to see, uh, a mixed, would you agree, um, in the demographic of who those tenants are, who the occupants are, the people, the people that are moving here to buy, sell rent, et cetera.
Mike Foster:Well, I think you're seeing more and more young people in the community. Um, you seem you being a contributor to that and the medical community being a contributor to that. Um, and then what you hear about, um, the newer generations, not wanting to not necessarily want to live where they work, but they want to work where they want to live and that, and that difference in mindset. Um, and then the ability to work remotely in what, what I tend to see in some of these buildings is, uh, at least some of the ones that have the newer ones that have been leased up is, uh, young couples. And then empty-nesters kind of a combination of those two. Um, and then, you know, when you, when you go to other markets up by 70, uh, Glenwood, for instance, you're seeing a pretty good demand for just a single units, studio units, and one bedroom units, um, and a little bit of resistance to sharing a two bedroom. So even though the dollars are better people wanting their own space and having that mix. And, uh, yeah, so, and that, that resort market, I mean, when you look at, when LinkedIn looks at us, they see grand junction as really, um, to them grand junction is it goes all the way from Carbondale to Moab, right? It's a virtual grand junction. It's a little bigger drive time wise than we're used to, but I, 70 corridor does link up for quite a few people, um, that, that do commute all the way up to the roaring fork Valley and then sometimes reverse commute. But that's an interesting part of it too,
Jen Taylor:That migratory path. And then we see that South down to Montrose as well, certainly with Delta and also to mountain to Montrose. Yeah. Yeah. I know. I certainly am enjoying watching that. We, you know, going back to the conversation about, uh, the economic pillars of our community and how certainly CMU and your family and having a lot to do with that. And through the years, um, our healthcare system having four, uh, regional healthcare facilities here in the Valley, um, check was, is a story that wasn't even around five years ago with, with two Jeff's efforts and certainly, Oh, rec that's, you know, one of my favorite topics to talk about. Well, let's, let's, let's pause on that one just for a minute. What, as we segue into commercial more specifically, what are you seeing, um, as the, kind of in you being an outdoors outdoor enthusiast, what are you seeing some of the top stories coming in from the outdoor sector into the commercial space in the grand Valley?
Mike Foster:I'm seeing just recreation as a, as an attractor, um, mountain biking, making us, giving us, uh, a resort element, um, from a lifestyle perspective, and that's getting eyeballs into the Valley from other resort markets. Um, and the manufacturing side is interesting, uh, you know, with not and racing products and others, uh, uh, you know, actual outdoor manufacturers, um, you know, the REI relocating and centering up in, in more on the commercial retail core, leaving, uh, leaving the seventh street location and going to a more regional location because we're a stopping off point on the way to, to Moab, Moab being in a tail that wags the dog. And we don't know it sometimes. You know, when you, when you go to have coffee in March, and you're wondering why is there a line out the door of the coffee shop? And they tell you, it's because they're having cheap Safari and Moab and all the mountain bikers are in grand junction. Uh, so some interesting dynamics there, as far as the commercial market, we've, we've got a kind of an, we've got an environment or an ecosystem. I think of commercial real estate as ecosystems. We have some old growth forest that some of the trees have fallen over and they need to get re-energized. Um, we have some large shop in yard buildings that were built, uh, 2006, seven, eight, um, during our gas boom, and they're being reabsorbed, uh, you know, Alpine lumber came in and bought a pretty large, um, trucking facility, turned it into the lumberyard roofing company, bought, uh, another facility. Um, we've got, uh, we've got an incredible manufacturer of, um, energy efficient, you know, net zero homes that, uh, is using grand junction as a home base to serve communities all the way from, uh, Driggs, Idaho, uh, S you know, Vail, Aspen, um, cows, and they're selling into those markets. They're modular manufacturer, and they're looking at a pretty large expansion currently buying a building and are going to be manufacturing units there. And you know, that that's going to be exciting. So, you know, the construction industry is really a big driver, and it's a, and it's a regional, it's a regional industry that can, that can scale and serve more areas than just the grand Valley. So that's been a use for some of those industrial buildings. Um, and then, you know, the retail market is really doing well, given that we're, we're getting our mall re-energized and, you know, and our regional mall is an interesting, um, phenomenon, because if you have a regional mall in a, in a major Metro while there's six or seven of them, and they all cannibalize each other, whereas our mall is pretty lucky. It's got 150 mile trade area, although itself, and it allows national retailers to really feel comfortable stepping out. So we have the, uh, 55,000 square foot lease happening. We've got the Gail units, which they've bought the site, and they're gonna be back in, uh, shopping season. I presume by the end of this year, the HomeStore, the redevelopment of this Sutherland's, uh, in the pad retail. And, you know, what, uh, what would be really nice is to get our hospitality market back and get that ranking, um, and our airport and, you know, those kinds of things, but, uh, so
Jen Taylor:Direct flight to Mexico soon. So we're all waiting for it is it's exciting. There's, there's so much to talk about. I, you know, attending the, um, uh, the Colorado, uh, university of Colorado lead school of business, the economic forecast, um, they talked about Mesa County being in the best position in all of the counties of the state of Colorado with regard to, um, our scores and, and having, you know, being the closest to our pre COVID unemployment rates. And we've bounced back quicker. We, and you mentioned it earlier, we're a little bit of a latent the economy, but we are solid. And, uh, it's, it's exciting to see, um, ex you know, external forces coming in and internal forces reinvesting in our own community. So, like you said, this was back back when you 2014 or so is when the first one we started seeing, um, fewer people moving out than moving in. And so it's a, yeah, it's a good thing. We're on a good trend. Yes, absolutely. Can I ask you a question, another question, what do you think about, uh, so we've got, you know, in our, um, for those that are listening from, from regionally here locally, um, marijuana, recreational marijuana is coming back up on the docket this spring. I think about that quite a bit with regard to not only, um, you know, how that will affect the, the retail landscape of our community, but also the, the commercial landscape and warehouse and et cetera. Have you, um, thoughts on that? I'd love to hear anything that you might have to share?
Mike Foster:Well, there's some interesting dynamics with that. Um, you know, in Denver, they obviously had, um, a fair amount of, of leasing of industrial warehouses. And, and the funny thing was, is they were really going after, you know, in an industrial warehouse, the taller, the better is, and, and the lower the S the ceiling height, the more obsolete a building is, well, what that marijuana flipped that on its head, because the low ceiling height, as a benefit for that kind of activity, if you're going to grow things inside. So those buildings that were in the sixth Avenue corridor, um, really did well, and it attract to that for that market. So, you know, as far as grand Joshin goes, um, one of the things that happens is that you w if you're leasing to a marijuana tenant, you, it has to be an all equity situation because there's no bank financing for that. So that tends to drive up, lease rates for that product type. Um, and, but it's, it also makes it to where not every building can be available for that use. So we'll see how that, how that translates, we'll see what the community response is to it. I, you know, the politics of it remains to be seen what happens there. Um, the, uh, you know, I think there's been some discussion about not having, you know, where it would be in the market and, you know, keeping it on the[inaudible] business loop corridors, or on the periphery of the community. Um, not necessarily in the front door, in the center of the community, um, the growing of, you know, one of the other things that the community has to be cognizant of is the Hampton industry and, you know, growing outside creates a problem for those that want a free sample that is low THC. So yeah, you don't want any cross-pollinization there. Um, so, um, you know, and then there's others that talk about, um, the brand identity of not, uh, not being a place where retail marijuana is, you know, so I think there's benefits, um, you know, there could be benefits depending on what happens either way, because, you know, maintaining that cache isn't all bad either. So we'll see what happens.
Jen Taylor:See what happens. I know it's a couple of times now it's been through the, through the cycles here, so curious to see and how that might affect yeah. Somewhat for some of the property owners here in the Valley and, uh, and the opportunities of yeah. Different. So as we talk about warehouse, so specifically on that, what are you seeing, w what's the most challenging, um, size of warehouse right now, and, or what's most available in terms of warehouse space at the moment,
Mike Foster:Um, you know, the, the 10 and 15,000 square foot, um, 10 to 20,000 square foot drive in a warehouse without the docs and with lots of yard, we don't have the yard demand that we used to have. Um, again, construction industries pulling some of that up. Um, we're, we're seeing some demand drivers, you know, diesel repair, um, and some other, you know, auto-related uses. Um, but that's right this very minute, that's a little bit of a challenging, uh, and, and what's interesting about this market and the commercial market is everything cycles differently. You'll have industrial shop and yard slow for two quarters. And then when it starts picking up warehouse slows down. Um, but, uh, each one of these little segments, retail has its own thing. And, but, um, we've had some good, we've had some good warehouse leases, um, from what I've, you know, from trying to offer on some, I been trying to offer on a 55,000 square feet dock, high warehouse downtown, I've been told it's leased. Um, I just did a 18,000 square foot lease for the VA, uh, dock high space. Um, there's been, uh, there's been some, like I said, a 20,000, well, a 15,000 square foot building. That's going to be expanded to 20,000 square feet. That's going to close here in a couple of weeks, um, lots of land activity. Um, and then the interesting dynamic in the industrial market is the industrial leasing and, and, uh, we have tenants that want to be owners. And so we've, if they're going to own their own space, um, then the landlords are gonna are going to have to find a replacement tenant. So there's been a little bit of a phenomenon where, um, industrial rates have chased interest rates down because interest rates are low, tenants are buying and, and buying existing buildings, but just like you have in the residential market, eventually you're going to run out of those existing buildings, just like you run out of the existing housing stock and you start having to build new housing stock. And we're kind of entering that inflection point where we're becoming more of an industrial construction market, and that's going to push rates, you know, lease rates back up because not going to be as easy to buy that building that, that you want. So yeah, some different things going on there.
Jen Taylor:I love it. Talk to us about, um, office space, class a and otherwise office space. And the bigger question that you probably get hit up with, probably talk about it, nausea, but, um, COVID and how that's affecting office space. Let's talk about it.
Mike Foster:Yeah. So, um, where we're a little bit of a smaller user, we're a small user office market. We're more nimble, you know, are a big office floor plate for us is the BLM. That was a big, that was a big lease. That was 17,000 square foot lease on a couple of floors. Whereas a lot of our office ecosystem is 2,500 square feet, 1500 square feet, 5,000 square feet is a big lease. Um, so that's a little bit easier to manage COVID in those smaller office environments, um, to where, when you're dealing in larger cities where you're dealing with a hundred thousand square foot floor plates, 50,000 square foot office floor plates, national office tenants that make decisions nationwide, you'll have an executive in New York saying, well, we're shutting work, sending all the employees home everywhere. I don't care if they live in Denver. I don't care where they live because I'm going home every 20 is going home. And so what I've noticed is that our office market, um, it's just been a little bit more resilient because it's smaller and more nimble. Um, and, uh, um, yeah, so, yeah,
Jen Taylor:And we're seeing more construction as well. Would you, would you say, at least I'm noticing, um, or more investment in class, a office scapes?
Mike Foster:Yeah, we definitely have. And, uh, and, and the tenants have been pretty receptive to it w wanting a new space and being willing to pay for it, you know, your, your, from being a prime example of that, stepping out and saying, Hey, we want to be on the river front. We want to be in a class, a ability. And, um, we want to have a good work environment. And, you know, you've got a national engineering firm. That's an in your building as well. KLJ which you, um, I think come here for the talent at CMUs civil engineering and mechanical engineering program. Um, and when we, and then we got financial services, large infrastructure finance, a firm that's circulating in the market, and we have three different, uh, brand new office projects. Um, you know, we have one on more traditional Patterson road corridor. We have one downtown, which was pretty, uh, which is kind of tenant tenant, self anchoring, you know, an owner occupying half of his own building and leasing to others by having a vision that wanting to do something different, which is very interesting on main street. And then the same goes with, you know, the bonds building, not being in a building that they occupy themselves as well. So yeah, it's pretty dynamic office market, all of a sudden, uh, some really nice buildings and some great build-outs and good things happening,
Jen Taylor:Great and migration within. Yeah, there's, we're, we're going to step away from our awesome, you know, smaller footprint, um, but very historically relevant and very vibey office space downtown too. We're kind of, you know, very proud to be part of this new generation of riverfront occupants and, and, uh, we're chasing, you know, the lifestyle tax. Is there a meaningful to all of us, we want to live and work where we, where we play and play and live where we work. So that's the, that's the macro story of the greater grand junction area, for sure.
Mike Foster:Yeah. And there's going to be a lot more living down there because you've got, um, a pretty large apartment projects nearby, uh, to go with the RAF launch in and the, and the Lake and the, and the incredible trail connectivity, um, and probably some more, uh, off, uh, well, some more, uh, multi-family West in retail, West as well with dos Rios. So, and, uh, and some glamping, I think
Jen Taylor:We'll be drinking Margarita's and had the opportunity to stay on the river soon. So stay in play again. That's the story of yeah. Of the way we live, how we live. Yeah. It's exciting. There'll also be some light industrial down there as well. So there'll be a little bit of everything in the mixed use, mixed use genre of the future. So, yeah, it's very exciting. What a great time to live, where we live, Mike you're at the forefront, you're connecting the dots and pulling the strings and pushing the buttons. And you're just, you're, you've got the stories you're the, this is not probably going to come across. Right. But you're like the EMT forefront of the, of commercial real estate. Like you've got the action.
Mike Foster:Yeah, well, you know, but the residential market exit happened because people want to live here and they're creating jobs where they work, where they live. And it's, it's really phenomenal to watch. Um, you know, because you have these 500 person firms or 200 person firms that aren't taking an office presence, they're just taking a virtual presence. And these people are here. And the dynamic people in our community, creating retail opportunities for small businesses, service opportunities for small businesses just by being here and, and, uh, doing what they do virtually, which is really cool. I think, you know, I, I don't know how many people you're running into and, and on the residential side, but I think you're probably running into some pretty dynamic folks that are, have don't necessarily have a commercial location for their employment.
Jen Taylor:You know, I'll just use a reference of, um, so I'm in COVID quarantine. I'll just, I'll admit it right now. But, um, I did do a virtual tour today with some folks who are moving here from the front range. They, uh, the husband restores, um, uh, van life. He restores, um, sprinter vans and to the, into the, you know, full camper fan life experience, um, very super high-end. And then, um, the wife is a professional climber and has a climbing dancing kind of par core company as well. That has, she's got her own space. And then they're moving to grand junction. They, they they're restless where they live on the front range. They travel half the year. Um, they, you know, they're there again, that lifestyle tax they're living the life and, and they find and found that grand junction embodies everything that is the value set to them. And this is where they want to live their life to their fullest expression. Um, be it, their personal lives as well as their professional lives. So it's really, it's, it's beautiful. And it's fun to, it's fun to be recipient, hearing these stories and help, uh, connect the dots for folks.
Mike Foster:It is fun and it's fun to, you know, to, to indulge the, the sprinter van, um, refurbisher or the timber leaf, you know, teardrop trailer manufacturer, or the aftermarket Mercedes bids, parts, uh, purveyor, who, who has a spouse who has a vineyard here. And it's funny because, um, I'm working the hardcore industrial market with him. And then one day I go to the vineyard with the sauce view of a book, the book list. And there he is, and I'm like, wait a second. You know, it's just, you see people on two sides. It's fun.
Jen Taylor:That's great. That's good stuff. That's good stuff. Okay. So as we getting out your crystal, your magic eight ball, your crystal magic eight ball for the year ahead, um, 20, 21 and into 2022, what trends are you, what's your trend line? What are you seeing?
Mike Foster:Um, I'm seeing more lands, uh, transactions, um, to facilitate the residential growth, quite a bit of that. Um, seeing continued office leasing, um, with the, because when you do the, when the residential market expands, you have a lot of residential, you have engineering, architecture, planning, a mortgage brokerage, real estate, brokerage, all those things, uh, that, that our office tenants, um, I think, um, it'll be good to see the nonprofit community kind of get some resources underneath it, um, and expand and get more resilient. Um, so I think that's going to be office market will probably continue to do well. I think retail market will be back even stronger. Um, and I think we're going to start seeing business formation in the second half of the year. We'll see the employment side, the industrial side come back. Um, and, uh, so yeah, so where we were down 20% on our sales volume, I think we'll be, we'll be up 20% over 2020 coming out of 2021. So, um, investment demand is still very strong as well. And, uh, that's, that's a challenging product type because you have to have the, you have to have the in income producing properties to serve it. So, um, and that's leasing dependent. So, yeah. Anyway,
Jen Taylor:You, and another thing, so as we, you mentioned earlier too, we talk about hospitality restaurants. Um, I read something, I think it was also that, that lead school of business, um, economic forecast for the state, they talked about pre COVID being the baseline of zero. Um, and looking at, I think this was three months ago, or so maybe two months ago, it was talking about seven out of 10 restaurants were facing closure in the short term, in the state of Colorado, which is just a horrifying thing. We know that restaurants are struggling, but, Oh my goodness, that's horrifying to hear for small business owners, but then if they can hang on, like the forecast is that as we get into Q3 of 21, that will Slingshot back on over about 6.7% of pre COVID baseline zero. So the opportunity in, again, restaurant and hospitality, tourism, of course, you know, wags that dog. And so we're looking forward to getting back to some, um, some strength in our independent entrepreneur, gastro owners, gastro experiences, and we've got some new taprooms that have come into place and we've, we've been, we've welcomed them with open arms.
Mike Foster:Yeah, absolutely. And, um, and I, I really think, I think June, one's going to be, uh, a big marker. I think we're going to have, you know, there's a lot of vaccine getting into the community and some other things that I think, um, we're, I think we're going to be looking better, uh, the beginning of the second half than the end of the second half. I agree anyway, so good stuff, good stuff. We're in a good, we're in a good position. And, uh, and, and we're also in a good storm track, so we're going to be getting some more snow here pretty soon.
Jen Taylor:That's what I understand. That's what I understand. Are you heading up?
Mike Foster:Well, I tried to talk a client into maybe changing the Thursday morning dynamic a little bit, but, uh, I, I might have to do something late Thursday afternoon instead. See, what's left over, but yeah. Yep. Head straight to tier two.
Jen Taylor:Well, Mike, and it's been an absolute privilege to get, to spend this much time with you. I glanced at the camera at the clock just to see like, you know, are we, do we need to do I need to keep going with my amazing list of things that I want to know about Mike Foster? And I realized I'm like, we've been, we're about overtime at this point. It's just so nice to talk with you and yeah, just great to listen and learn.
Mike Foster:Appreciate you. Yeah. Fantastic. Thanks for having me really appreciate it.
Jen Taylor:That's just, Hey, I'm be safe out there and, uh, can we be on the streets and, um, yeah, shake up some dirt.
Speaker 1:Okay. All right, Mike. Thanks for listening. This is Christi Reece signing out from the Full Circle Podcast.