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Commercial Real Estate Update | Boulder | Q2 2022

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Commercial Real Estate Update | Boulder | Q2 2022

Transcript from the Market Meets Podcast 

Hosted by Heidi Schamber with a guest appearance from Nate Litsey

Heidi Schamber: This week we are talking with Nate Litsey from our office, who’s going to give us a second-quarter update on the real estate market in Boulder. He’s going to talk about some retail developments and other developments that are coming to our community.

Nate Litsey: Excited to be here. Thanks for having me.

Heidi Schamber: Thanks for coming.

Nate Litsey: Of course. Where should we start? How about some retail updates.

Heidi Schamber: Love that.

Nate Litsey: What’s going on in retail? Retail continues to be very strong. We see,  a lot of demand for retail space in Boulder and really we’re getting to the point where there’s just not a ton of vacancy left. What is left is generally not quite as desirable, which is why it’s still vacant, but definitely got a list here of some new retailers to the city of Boulder, which are pretty exciting. First up, the one I am most excited about and Heidi, I think you will be most.

Heidi Schamber: Okay…

Nate Litsey: Boulder has always had in my mind, a dearth of donuts.

Heidi Schamber: Oh my Gosh. Wait.

Nate Litsey: Boulder is going to get its very own Voodoo Doughnut. They’re coming. It’s at 3210 Arapahoe at the former KFC/ Taco Bell. So they signed a lease there. It’s about 2500 ft be open. Hopefully, end of the year. They obviously have some work to do from what is there today, but very exciting.

Heidi Schamber: Oh my God, that’s so exciting. Have you been to a Voodoo Doughnut?

Nate Litsey: I have been to one in Portland.

Heidi Schamber: Yes, me too. We made a special trip. I mean not to Portland in general, but like while we were there to go and it really did not disappoint. I think I had one that had like full-on strips of bacon on the top. Like maple bacon.

Nate Litsey:  Oh Yes!

Heidi Schamber: Oh yes, yeah, I’m probably going to go back for that.

Nate Litsey: Yeah, so that’s exciting. I think that’ll be a good, good addition to Boulder.

Heidi Schamber: I know, and that’s the thing. That’s why I feel like there are not very many donut options. Hailing from the east coast, there’s a really a good plethora of options for donuts and bagels but not so much here. That’s why it’s such a good addition.

Nate Litsey: Exactly. We don’t need a dozen doughnut shops. We need one awesome donut shop. So yeah, that’s pretty cool. What else? We’ve got a very successful Empanada group. It’s called Maria’s Empanadas. They’re out of Denver, and have four locations now. They’re going to take the old Salvaggios space at 26th and Pearl.

Heidi Schamber: Yeah, that’s a good spot.

Nate Litsey: That’s a great spot for them.

Heidi Schamber: Is it like grab and go or are there seats in there?

Nate Litsey: There are some seats in there. It’s about 2000 ft I think. So there’ll be a few seats, but it’s probably mainly grab and go. I love empanadas.

Heidi Schamber: Do they have parking right on the side street there?

Nate Litsey: On the north side of the building. Yeah, so that’ll be good.  Sticking to the food options; The former Fate Brewing space at 38th and Arapahoe. That’s going to be Boulder Social, a Frank Day concept. He’s has a concept in Denver called Stout Street Social. Very similar, just in Boulder.

Heidi Schamber: So what’s the vibes? Are there different food stalls like social or just one restaurant?

Nate Litsey: No, no, it’s just, it’s a single restaurant. They’re going be brewing beer on-site, the menu is sort of a pizza and seafood vibe, which is an interesting concept.

Heidi Schamber: That’s an interesting combo. I like that location because without Fate, there or anybody there, it’s really  like a no man’s land. You’ve got to come all the way in (to Boulder), or go all the way out (to Louisville, Lafayette..etc).

Nate Litsey: I agree. I think that the space serves East Boulder very well where people are willing to go to.

Heidi Schamber: It has a good patio size, good parking, and easy access. That’s awesome. When do we, do we know how long that will take for them?

Nate Litsey: They’re working on it now. I’d say probably mid-fall, maybe October, something like that.

Heidi Schamber: You and I were chatting that this is the space that used to be. What was it before?

Nate Litsey: Jose Muldoon’s. The first happy hour I ever went to.

Heidi Schamber: There you go. That was a popular joint.

Nate Litsey:  Yeah that was also owned by Frank Day.

Heidi Schamber: Yeah. So it’s almost come full circle.

Nate Litsey: Came all the way back.

Heidi Schamber: That’s pretty cool.

Nate Litsey: Yeah, that’ll be nice. What else? We’ve got a new chicken place Raising Cane’s coming off of 28th. You’ve got the old Taco Bell and liquor store just to the north of Valmont there on the West side. So those two go away, and they’re going to build a new building with a double drive-thru.

Heidi Schamber: Raising Cane’s, I mean it’s going to need a double drive-thru. Have you ever seen the drive thru line? It’s like In and Out, as far as popular following, I’m kind of surprised about that in Boulder.

Nate Litsey: You don’t think of that (this food) as the Boulder demographic.

Heidi Schamber: Right? Fast food literally can’t even survive in Boulder historically. There are places that go out of business here that they never go out of business anywhere in the country, except for here.

Nate Litsey: It’s true interesting. I think there’s some pent-up demand for not healthy food. That was almost a Chick-fil-a instead of Raising Cane’s, but it blew up with the last second, so we get a Raising Cane’s.

Heidi Schamber: Was that based on, we don’t know or not being open Sunday type things? Or things like politics?

Nate Litsey: It’s a good question.

Heidi Schamber: I really like Chick-fil-a for the food, but I can understand there might be some issues with the rest.

Nate Litsey: So. What else? Boulder got its first cat café.

Heidi Schamber: Do you guys know about what cat cafes are?

Nate Litsey: I do, our colleague Brittany Boudreau did that deal. It’s basically a concept where you go in to sort of coffee shop, meeting area of sorts and there’s a bunch of cats running around.

Heidi Schamber: It’s like a meet and greet with cats.

Nate Litsey: So the ultimate goal is to get these cats adopted. So they’re partnering with a couple of cat rescues. I was talking to the owner of it and apparently they’re super popular in Japan. He’s been to a bunch of them out there. So he open here two months ago or so and has been doing great.

Heidi Schamber: I love that. So the business plan though, is that you pay to adopt the cat?

Nate Litsey: You pay to get in. You could show up with your laptop. “Hey, I need to do some work here.” Wouldn’t it be great to be doing some work and hangout with some kitty cats? And then you would obviously pay to adopt a cat, pay for food, drinks, stuff like that.

Heidi Schamber: Right? Oh, and the cafe part, do they have like food and drinks? Because I’m just trying to like run the math in my head as far as how this pans out. You’re there doing work or doing whatever you would be normally doing at a coffee shop without a lap full of cats. Really? Is there an option there to not leave with a cat? I feel like if you’re going there, then likely leaving with a cat. Haha! You’re going home with a cat? Yes. Okay. I love it. Where are they located?

Nate Litsey: That’s at 5290 Arapahoe.

Heidi Schamber: Perfect. Great.

Nate Litsey: What else? That’s about it for interesting retail tenants at this point. So moving on to more office-related subjects here. I think last time we talked about some life science activity in Boulder. How that’s kind of a new concept. We’ve got some new landlords looking to convert some buildings into life science. It sounds like that is only continuing. I know there’s a very large national real estate investment group out of Manhattan who’s looking at a pretty sizable purchase in Central Boulder to do the same thing. Basically convert some older office/flex buildings into life science.

Heidi Schamber: How many square feet?

Nate Litsey: You know, I’m not entirely sure. It’s not as massive as the Flatiron Park but at least 50K Sf. Okay, so not that big, but still big for Central Boulder.

Heidi Schamber: So they’re sniffing around.

Nate Litsey: They’re under contract to purchase some buildings, interesting. Okay, so we’ll see how that goes.

Heidi Schamber: So that trend continues.

Nate Litsey: It does for sure. Another trend that we certainly continue to see is the redevelopment of existing commercial buildings into residential buildings. A good example would be the Sturtz and Copeland site. They were a flower shop and florist. They were off of what Valmont just East of 28th for 20-30 years, a long time. They owned that building and then they basically sold the business and sold the building. They’re going to turn it into a residential apartment building. Sturtz relocated to actually kind of by our friends, Voodoo Donuts. At Arapahoe Plaza right next to it. So that’s kind of interesting. Some other deals similar, at the corner of Spruce and Folsom, you can picture that on the east side. There’s Hoshi Motors. There’s a thrift store. All the way down to 27th Street.

Nate Litsey: That’s all going to go away. That’s been known by family here in town for decades, at least 30 years. It will be redeveloped into 63 apartments.

Heidi Schamber: Is there going to be retail on the first floor?

Nate Litsey: I don’t know out there, you don’t have to include retail. You know, if you’re on Pearl Street, you’re forced to do ground floor retail. But out there, I think you get to choose.

Heidi Schamber: Feel like I thought I saw that, but it could go through many renditions.

Nate Litsey: Yeah, for sure. So that continues. There’s actually another one really just to the north of that, also on Folsom, much smaller. It was used to be a little apartment building getting redeveloped into what?

Heidi Schamber: Townhouses

Nate Litsey: Townhouses

Heidi Schamber: They look nice. Who’s doing that?

Nate Litsey: That is Patrick Brown

Heidi Schamber: Patrick. Yeah.

Nate Litsey: Packing them in like that. That’s what the market wants.

Heidi Schamber: Right. That’s pretty cool. All those that you specifically just mentioned are pretty much downtown. I mean in an extended downtown. So that’s ideal living and that’s what people are looking for convenience-wise. They can either jump on a bus. They can also walk or bike. They’re kind of in the action.

Nate Litsey: Exactly. It’s a good spot. And you know, I’ve talked to a few residential brokers who, who are selling those types of units and asking them who buys these, who’s your target audience. A very large one is people who do not live in Boulder, but love to be here for four months a year. We own this place, we don’t have to do any maintenance, we can lock the door and never worry about it again – and when we want to go to Boulder, well it’s there waiting for us. To me that’s an interesting trend in Boulder.

Heidi Schamber: Yeah! I like that. It makes sense.

Nate Litsey: It does. You know, it’s a great place and it’s certainly very popular with tourists and if people can buy something here. Why would they not?

Heidi Schamber: Right. People want to be here, or their kids go to school here. That’d be a perfect option to just have a place to stay in town.

Nate Litsey: So lots going on in Boulder!

Heidi Schamber: There’s so much going on. I feel like it’s exciting and we’re blessed that we get to do this here in this market. I wouldn’t really want to be doing it anywhere else and Nate. You’re the best. Thank you so much for joining us for the second quarter update.. Please tell us please tell us youe’ll come back for the third.

Nate Litsey: Yeah, ok!!

Heidi Schamber: If you, the listeners have any questions or if you’re interested in learning about something for the next quarter, email it to us and we’ll try to get some information before that. That’s a wrap, thanks so much.

Nate Litsey: Thank you!

Nate Litsey: Thank you!

If you are looking into leasing – from retail, office, to warehouse – and aren’t sure where to start, do not hesitate to reach out to Market Real Estate. We are just a call away and love helping business owners begin a new chapter of their story.