Colorado economy? (Denver: sales, real estate, lease)

[polo1000rr]

Hi all!
I have already read a ton of great info from this forum so thanks!

My wife and I are looking to move to Colorado. Haven't decided where quite yet but we have done a lot of research. We have a construction company down here Texas) and will be wanting to continue operation there. In your opinion where do you see the most opportunities for growth and or building. Mainly commercial and industrial. Also we have two girls 9 and 6 so schools are a big deal also. I am really interested in the outskirts of Denver.
Anyways thanks for any input. Hope to enjoy your beautiful state soon!!

[CosmicWizard]

polo1000rr wrote:

In your opinion where do you see the most opportunities for growth and or building.

In the current economy.....Texas!

[CAVA1990]

Originally Posted by polo1000rr

Haven't decided where quite yet but we have done a lot of research. We have a construction company down here Texas) and will be wanting to continue operation there. In your opinion where do you see the most opportunities for growth and or building. Mainly commercial and industrial.

Aren't there some leading indicators you follow in your industry to determine that? I'm reminded of an office furniture executive who could figure out how much business there would be in a paricular city just by counting the number of constructions cranes he saw. Perhaps there's something like that which would lead you to the answer? Think about what generally precedes commercial and industrial construction. Government legislation or contracts? In any case, I would think everything on the horizon would be concentrated around the one big city of Denver so if you're going to move to anywhere to CO with your business that would be the place. Personally though I doubt you'll find much activity concentrated anywhere in the near future in the U.S.

[jazzlover]

There is not even enough work to keep the locals in business these days--pretty much all across Colorado. Despite all the bluster otherwise, Colorado is not an especially friendly state for "brick and mortar" industry. Location, governmental policy, and numerous other factors all play a part in that. If fuel prices explode, and I predict that they will, you can add lack of economical transportation alternatives to the problems. For its location, Colorado used to have a fairly substantive heavy industrial presence. Most of those operations are gone or have severely scaled back their Colorado operations in the last couple of decades.

Colorado is a poor choice to locate a business such as yours in this current economic environment, and I don't see that changing for a long time, if ever. Truth is, Colorado is beginning to revert back to what it was for many decades from 1893 until around World War II: a nice place to live but a lousy place to make a living.

[sunsprit]

As a vendor to your industry, I've been seeing the collapse of it along the Front Range over the last 18 months.

I've spent as much time going to auctions ... either "going out of business" or "gone out of business" in the trades (welding and machine shops, electrical contractors, plumbing & heating contractors, HVAC contractors, and so forth) as I've spent calling on prospects and bidding projects. A former employer, a long established rep agency in the lighting business with excellent competitive lines ... tells me that his business has been flat (after a serious decline) for the last 24 months. We used to get FAX'ed in RFP's all day long, and struggled to keep up with the BIDS; now he gets several projectg BID requests a week. I've watched a number of WD's in the business fold up in the last year. I watched several coatings WD's shut down their remote outlets to concentrate only on their main store. Two sizable regional asphalt paving contractors folded this year, too. You can check out the recent industrial auction history on websites like Roller & Co, which may also be an indicator of how upside down construction is in this area right now.

For the most part, it seems like the spate of hospital construction of the last decade has ended ... the only remaining industrial and commercial activity I see going on right now is Gov't projects.

With the closure of so many new car dealerships in the last two years, there's a huge surplus of those types of commercial properties; there's whole automotive sales complexes (multi lines, several dealerships) that are now empty. A quick tour of Denver's retail/industrial/commercial properties will show a significant vacancy rate right now. It's pretty overbuilt for the current demand. That includes heavy manufacturing facilities, with a number of specialized plants now vacant such as certain glamour industries (such as IT chip plants) along the Front Range have scaled back or closed.

FWIW, I know some GC's that are in a holding pattern right now, hoping that their last spec projects will sell or lease before the construction loans get to be too much to carry. Similarly, a fair number of residential GC's and Sub's are looking at virtually no work ... and they could be bidders on other projects if need be, changing gears simply to keep busy and cash flow at this time ... ain't happening. There's a lot of tradespeople that have simply left the area due to lack of work, too.

I hate to be all "doom and gloom" in this posting, but there simply isn't a lot of activity in this area right now in your business line. Regional Power plants, for example, that had been approved over the last few years ... aren't being built now (after all that expense to get the permits) because of the uncertainty of the regulatory costs ahead from the current administration. A friend with a three-generation crane service company has auctioned off his equipment, laid off his employees, and now keeps only a core group of workers for facilities maintenance contracts ... a small fraction of the business his company was doing for decades.

What few projects I've had in the last 24 months (yes, I do some smaller scale industrial contracting, too) ... I've been able to get my labor staff from Labor Ready, at under $13/hr. I've seen qualified tradesman in many skills working for whatever hours and the minimal pay they could get, just to survive here. When you're seeking help and former $25-35/hour journeyman/operators are on the call list for minimum wage, you know that the construction trades are in the dumps right now around here.

[davidv]

Originally Posted by sunsprit

For the most part, it seems like the spate of hospital construction of the last decade has ended ... the only remaining industrial and commercial activity I see going on right now is Gov't projects.

If 60,61, and 101 pass, gov't construction will grind to a halt as well.

[naturegirll]

All these people who show up on this forum, wanting to move to CO, and I think "too bad none of them ever mention coming to start a new business there"....and then one does, and that ends up

[wanneroo]

Construction companies and contractors are a dime a dozen in CO, partly because everyone and their brother wants to live there.

I have several relatives in the real estate biz in Colorado, commercial/industrial/gubment and residential, and all have gone from grand heroic champions in 2005-2007 with sizable incomes, to now surviving on a small fraction of that scalping whatever scraps of income they can find in the market. Oh how the mighty have fallen.

Basically Colorado ended up with a massive oversupply of all types of real estate and then combined with a shrinking economy, the market is catered for and no need for nothing new. In my opinion, also having known a few prominent RE developers in CO, certain segments of the market might be flat line for 10-20 years.

If you have a prosperous biz in Texas, I'd keep it and sack away the profits and if you have to, buy a 2nd home property in the mountains or something for vacation. Texas I'd say in this market is one the few places worth doing business in right now.

I wouldn't dissuade you but just know the shark tank right now you'll be jumping into and if I was in your shoes, I'd have the capital to back it up.

[CAVA1990]

Originally Posted by naturegirll

All these people who show up on this forum, wanting to move to CO, and I think "too bad none of them ever mention coming to start a new business there"....and then one does, and that ends up

You really need new businesses that will sell goods and services produced there to folks outside of Colorado, bringing incremental cash into the economy. To paraphrase Mark Twain, you'll never get rich doing each others' laundry.

[naturegirll]

Originally Posted by CAVA1990

You really need new businesses that will sell goods and services produced there to folks outside of Colorado, bringing incremental cash into the economy. To paraphrase Mark Twain, you'll never get rich doing each others' laundry.

Some of that would be nice, but diversity should include being able to sustain local/in state needs as well......maybe part of the lessons learned in the current economy will be to start buying from the USA and not so much from China/other countries....(not to mention that bartering will be easier locally).....

Anyway, the more people who have the spirit to start a small business will start a trickle of change that starts locally and ripples outwards....if it's a well planned/useful business, that is.....some of the "big boys" today, got started in prior downturns, so it's not impossible to accomplish......

As long as people switch their attitudes of business, from "what's in it for me" over to "where can I adjust to fill a need".....