A new decade is upon us, and it is an appropriate time to remind ourselves to take the long view when it comes to commercial real estate investment. But for those determined to find faster growth, changing market conditions may be fertile ground for upside opportunity.
Change is certainly in the air at Coldwell Banker Commercial. We say goodbye to our great friend and colleague Rodney Krebs, who is retiring after several decades of serving clients well. Rodney is the pillar of the commercial real estate community, and we are proud to carry on his legacy of best practices and genuine care for our customers.
The other exciting news is that Coldwell Banker DuFour Realty is under new ownership. The company has been purchased by Steve Craft of Coldwell Banker C & C properties in Redding, who also owns Coldwell Banker Ponderosa Realty in Paradise, and is on track to grow the brand throughout the region and even into Oregon. Craft has ownership and partnership interests in Coldwell Banker offices in Roseville, Grass Valley and Medford Oregon, and we can now offer you even greater networking and marketing resources.
Now for market conditions. There are signs the market is softening. In Chico, the Sierra North Valley Realtors Multiple Listing System (MLS) reports 30 Sales for a total volume of $24.7 million in 2019. This is significantly less than in the previous year, when the MLS reported 38 Sales for a total volume of $34.7 million.
Costar, which tracks MLS and non-MLS properties shows a similar trend, with 165 sales transactions in 2019 for a total volume of $140 million, compared to 195 sales for a total of $219 Million the previous year.
The amount of vacant space is also going up. After trending down in Chico for several years, the vacancy rate hit a low of 1.6% in December of 2018, the final spaces being leased up in the aftermath of the Camp Fire population and business surge. But that influx appears to be working its way through, and the current vacancy rate has spiked at 4.6%. Contact us for retail, office or industrial specifics.
There are also a lot of healthy economic signs. Meriam Park (www.MeriamPark.com) is well underway and changing the way we develop. The nearby Stonegate project is closer to final regulatory approval and will come on line soon with more than 400 new homes. Eaton Road has been connected, opening up a major arterial route in North Chico, relieving congestion on East Avenue. Residential development in this area is booming, increasing demand for retail and business services. Watch for a new neighborhood commercial center at the corner of Eaton and Floral, and a massive apartment complex already under construction across the street.
Hundreds of multi-family units are being built throughout the city, but demand remains reportedly strong. By some estimates, the population in Chico is still at least ten thousand people higher than before the Camp Fire (95,000), and recovery efforts continue to have a major economic impact on the region.
Like cities across the U.S., Chico is not immune to national and global trends. Such issues as the Amazon effect on brick and mortar retail, new technology, a booming stock market, social issues, and an election year may pose a bit of uncertainty. But these conditions may also prove to be fruitful for the bold, and un-concerning to the disciplined.
Through good times and bad, we at Coldwell Banker Commercial are here to serve you. Please feel free to contact me to discuss your goals. Happy New Decade!
Mike Donnelly
530-896-3126