The commercial real estate market in the Montrose area has picked up this past quarter. I feel that this is primarily due to pent up demand, as well as the slight reduction in interest rates. Low end residential money continues to be strong, but anything over $600K and up is having more days on market and seeing more price reduction. There is still also of optimism for the Montrose Area.

Overall Market Tone

2024 transaction counts in Montrose were roughly flat with 2025 year-to-date for both commercial and residential. Renfrow expects a drop in Q1 closings, as there are few contracts in the pipeline and deals typically take ~60 days to close. Sales tax revenues through November were also flat, with concern they may soften as recent volatility works through.

Leasing Environment

Commercial leasing has softened; several letters of intent and long-term leases were pulled back after the Telluride ski area “crash.” Some tenants shifted from planned long-term leases to month‑to‑month just to keep space filled until the outlook is clearer. The overall sentiment is being driven by fear and uncertainty, with a lot of local rumor and “sky is falling” chatter around airlines, water, and fires.

Key Economic Concerns

• Water shortages: region at lowest on record, major cutbacks for agriculture; this, plus the loss of a key fire‑related tenancy, raises fears of a bad fire season.
• Loss of a planned Colorado fire helicopter facility (20‑year lease) at a major industrial building after state politics intervened.
• Local anxiety about air service and carriers, though airport board messaging suggests new airlines will backfill capacity.

Recent Wins

• Completion of a new Amazon distribution center in Montrose (~20,000 sq ft), viewed as a significant winfor the area despite Amazon being a challenging counterparty.
• Ongoing Telluride‑linked demand (e.g., Telluride Express) still creates some regional opportunity.

Notable Investment Opportunities

Former Walmart / current Office Depot ~22,000 sq ft on South Townsend. Asking ~$2.34M (~$100/sq ft), at a 7% cap rate.
High‑bay, former Walmart with loading dock; very low basis for that quality of box in this market. Office Depot is now privately owned, locally strong for 25+ years; current term is a 3‑year lease with a 3‑year option. There were three offers in December, but none have re‑engaged post‑volatility.

LP Manufacturing Facility – Approx. 75,000+ sq ft on 15+ acres. Asking $1.5M (well under replacement cost, “cheapest building in the state” on $/sq ft basis). Previously lined up to be a state fire helicopter facility with a 20‑year lease before being killed at the state level. Needs $500K–$1M in capex to reconfigure/modernize, but offers significant upside with the right tenant.

Daily Press / WIP Communications Office Building ~9,300 sq ft high‑quality office on 2 acres. Asking $1.7M. Former print/office hub for a major regional communications/printing firm; very good office build‑out at relatively low price.

Telluride Express Sale‑Leaseback

• Owner‑user willing to do a 10‑year sale‑leaseback at a 7% cap.
• Purchase price target: $2.8M.
• No personal guarantee, but long operating history and regional brand recognition (serves Aspen–Telluride corridor).

John Renfrow’s Perspective / Guidance

Pricing is starting to come down as more inventory hits and sentiment weakens. For long‑term users (10+ years), many of these assets are seen as attractive; short‑term flippers are more exposed. There is likely opportunistic upside for capital coming out of stronger markets (e.g., Telluride) that can tolerate near‑term volatility.