- New Homes
- New Apartments
- New Medical Facilities
However, you will not notice new office buildings under construction.
What gives? I thought we had a booming economy. Why no new office buildings?
There are a couple of reasons. First, construction costs have sky rocketed. In ten years, construction costs have gone from about $200 per square foot to over $300 per square foot.
Rental rates have not increased at the same pace as construction costs so speculative investors can’t make their numbers work.
It’s too expensive to build compared to the rents that can be charged.
One reason why rental rates haven’t increased at high rate is property taxes. Property taxes on Class A office buildings have basically doubled in the last 10 years in many cases.
So, until rental rates catch up with construction costs, we won’t see many new office buildings under construction.
The good news is I-25 traffic relief is on the way. The bad news is we will have to live through three summers of construction before it’s done.
Did you know the 26 miles between Highway 14 in Fort Collins and Highway 66 in Longmont Interstate 25 serves more than 45,000 cars per day? Wow!
Part of that stretch of interstate will get a third lane starting this summer. Construction is set to begin next month that will add a third lane between Highway 14 and Highway 402.
The project is happening 14 years ahead of schedule thanks to additional funding from several sources including the Cities of Fort Collins and Loveland. The first step we will notice is construction on the I 25/Highway 34 intersection.
This is great news for our region that will bring much needed relief. We will all just need to be a little patient while the work is being done.