With the first batch of retail marijuana land-use applications submitted to the city of Durango last week, marijuana businesses were forced to disclose their planned locations.
So far, it appears the retail marijuana industry’s impact on commercial real estate may be modest. Of the four applicants, three chose to locate their retail operations at the same location as their dispensaries.
Only one, The Acceptus Group, applied for a separate location: 965½ Main Ave., a second-floor unit in the heart of Durango’s commercial downtown.
The others would be located at existing dispensaries at 1111 Camino del Rio, 48 East Animas Road (County Road 250) and 72 Suttle Street in Bodo Industrial Park.
Don Ricedorff, a real-estate agent with The Wells Group in Durango, said he’s had several inquiries from marijuana businesses interested in a downtown location. In one case, a landlord decided against hosting a marijuana shop, fearing it wouldn’t be a good fit with neighbors.
Ricedorff recommended any landlord considering leasing to a marijuana operation first seek a legal opinion. Marijuana remains illegal under federal law, he said. “I don’t know where that puts the landlord,” Ricedorff said.
In other communities, warehouse demand has proved to have arguably the strongest impact locally. Growers need warehouses or other large, commercial buildings for their marijuana plots.
Legal marijuana has driven demand on Breckenridge’s Airport Road, said Jack Wolfe, owner of Wolfe and Co. Commercial Real Estate in Breckenridge. Airport Road serves a similar function to Durango’s Bodo Industrial Park.
Wolfe said the owner of a CrossFit space approached him looking for a new location. The CrossFit owner complained a neighboring marijuana business had gone to his landlord and offered to pay higher rent for his location.
Marijuana businesses “can pay more, and are paying more, to buy and lease space,” Wolfe said.
Breckenridge’s Town Council is considering whether to allow a retail marijuana shop to stay downtown after its current lease expires. The shop could be grandfathered in or kicked out. The council also could open up downtown to pot shops en masse, a move that Wolfe said could drive rents even higher.
“I think it’ll have a dramatic impact on lease rates, if not values,” he said.
Pueblo County has seen strong demand for warehouse space. It’s not for local consumption – growers from the Front Range have established operations in Pueblo County to supply their shops elsewhere, said Dan Molello, a commercial broker with Jones-Healy Inc. Realtors in Pueblo.
“That has had a pretty big effect on the industrial market here as far as demand for industrial space,” Molello said.
In Denver, demand for warehouses has driven up costs. Some growers this spring were paying $18 per square foot in some instances, and the industrial vacancy rate fell to 3.1 percent, The Denver Post reported.
A Denver commercial property agent did not return a call seeking comment.
The effects of The Acceptus Group’s proposed downtown location remains to be seen. The space is located above The Jewelry Works, and next door to Subway.
The space is owned by Denise L. Elliott, a local insurance agent, and William Whitney. Elliott did not return a message seeking comment, and Whitney declined to comment when reached.
