Sales volume, or the number of commercial sales, was up 50 percent, however average list price was down almost 10 percent.
According to Montezuma County’s Multiple List Service data, there were 15 recorded commercial real estate transactions this year that totaled roughly $3 million, compared with 10 transactions that averaged $3.3 million in 2013.
MLS data consist of sales mediated through brokers and don’t include private transactions, which could pump the number even higher.
The November sale of Mesa Verde Pottery to the Ute Mountain Ute tribe for $825,000 was the highest recorded commercial transaction of the year.
Scott Wallace, of 4 Corners Properties, who brokered the deal, noted the biggest challenge was matching a buyer’s needs with the unique setup and large square footage.
“It eventually sold for less than the owners originally were asking. It was a hard match to find a buyer that wants that square footage,” he said.
It’s a situation that happens a lot in Montezuma County, he says. The city’s available building stock is fairly old, and businesses looking for property have to consider the renovation costs of retrofitting a space to their needs on top of the sale price.
“Even though there are vacancies, its a lot easier for customers to build new because of their changing needs,” Wallace said.
More time on the market can lead to lowering the asking price, however, which is good news for a buyer hungry for a deal.
The new Maverik gas station on East Main Street was spawned by the phenomenon, a deal that Wallace also brokered.
“There is an affordability factor in this county,” said Sharon Wallace, a 4 Corners Properties broker and licensed property appraiser. “Maverik originally wanted to place their new store in La Plata County, but the land was too expensive. Montezuma County is much more affordable for building purposes for a lot of buyers.”
She posits that a $500,000 land sale in Montezuma County, would typically be three times more expensive in La Plata as buyers are lured by a larger, more affluent and faster growing economic base.
According to data from the U.S. Census Bureau, population in Montezuma County grew 0.4 percent between 2010 and 2013, compared with a 3.8 percent growth rate in La Plata County over the same time period. Additionally, the median household income in La Plata is $58,080 compared with $43,188 in Montezuma.
Joe Keck, director of the Southwest Colorado Small Business Development Center, posits that as some businesses get priced out of that market, more will cross over county borders.
“I think there is spill over, and there is opportunity for more of it,” said Keck. “Especially for towns like Mancos being closer to Durango; some companies that can’t quite afford or can’t find the right kind of commercial space in Durango.”
Keck cites the example of Tuffy Security Products. About two decades ago, the small company was looking for space in Durango to set up shop, but found more space for a better price in Cortez.
“Now that little company is sitting there with 25 to 30 jobs in manufacturing sector,” he said.
The reasons behind the local commercial uptick are multifaceted, but a large correlation is the recovering residential real estate market and a ripple effect from the recovering U.S. economy. The foreclosure rate in Montezuma County has gone from 30 percent in 2008 during the height of the recession, to 10 percent in 2014, according to 4 Corners Properties.
“It points to economic health. We’re a more stable market than we were five or six years ago,” said Scott Wallace. “We’ve moved from a situation of decline into one of stability.”
Keck says the uptick is impressive in a rural area like Montezuma County that doesn’t have the population volume buyers are typically going after.
“It seems like it takes longer for national trends to get to our area,” said Keck. “We are starting to hit that critical mass though with roughly 25,000 in the county.”
The remaining question is how to sustain the stability and growth the county has now. One way to start, Keck says, is to nurture the county’s strengths.
“We have a more diverse economy than we realize, and that does create some opportunities,” he said.
Keck points to a strong agricultural sector, and a tourism industry that is growing beyond just Mesa Verde thanks to attractions like Phil’s World and Boggy Draw trail drawing mountain bikers to the area. Kinder Morgan’s job creation and tax base contribution are also important boons to the county, he says.
“…If we can come up with a niche for mom and pops to fit into, we can have more companies like Tuffy, Alpaca, and interesting businesses like The Farm. I think we have a lot of opportunities, have to be smart about how we use them.”