CASPER, Wyo. — The Casper City Council is preparing to consider approving the purchase of the Casper Business Center, a downtown building that would become the new home of Casper Police Department headquarters.
City Council will make that decision during a special meeting Tuesday, April 26, about two weeks after the opening of the State of Wyoming’s new Thyra Thomson Office Building. That new state office building is shaking up Casper’s commercial real estate market as state agencies move out of other properties around the city.
“I can tell you that basically the relocation of multiple agencies around Casper to the new state office building is going to leave a hole,” BrokerOne Real Estate Principal Broker Randy Hall said Thursday.
The 127,000-square-foot building will contain 12 state agencies, with space to accommodate 350 to 400 people. That means state employees are leaving downtown offices such as the building at 101 W. Midwest Ave. (Wyoming Department of Workforce Services) and space at business parks outside of downtown, such as the Energy One building at 851 Werner Court.
The Energy One building is owned by Wyoming Financial Properties, a company that also owns the Casper Business Center. WERCS Group (Wyoming Financial Group) Chief Operating Officer Kyle Ridgeway said Thursday that state agencies moving out of Energy One have left that building largely vacant.
With state agencies vacating offices, Ridgeway said tenants at the Casper Business Center, which itself has been well below full occupancy “for quite some time,” have been offered opportunities to move into space at the Energy One building and other properties owned by Wyoming Financial Properties.
“Many of the tenants have moved or committed to move to Aspen Creek,” he said, referring to another building in the Werner Court area.
Finding high-quality office space
While state agencies moving out of a variety of properties across the city creates plenty of commercial retail space available to tenants at the Casper Business Center (who may be asked to move out if the city purchases the building), another question is whether there is high-quality office space available downtown as some tenants have said they would prefer to stay downtown.
Ide Land & Leasing Co. has already leased some space to tenants moving out of the Casper Business Center who assume the city’s purchase is a done deal, according to owner Bob Ide. His company owns a lot of downtown property, and Ide said Thursday there is office space available, but there may be a lack of what he termed “Class A” space available downtown.
Ide said the state office building is “without a doubt” affecting the market for commercial office space in the private sector.
Hall sees the state’s investing in Casper with the construction of the new state office building as “on one hand a blessing,” but he also notes the state leasing less space around town means it will likely be “a lot cheaper to rent than going out to build something new” over the next three to four years. Hall said there will be some lull in new construction over that time as the surplus of available commercial space leads to cheaper leasing options for businesses.
Cornerstone Real Estate Managing Partner Chuck Hawley said Thursday that in addition to the new state office building, the COVID-19 pandemic depressed the commercial real estate market to some degree, with some tenants choosing not renew their leases or choosing to downsize with employees working more from home.
However, he expects demand for commercial office space will return and the City of Casper’s interest in the Casper Business Center could offset some of the impacts to the commercial real estate market caused by the opening of the new state building.
City Manager Carter Napier said Thursday he thinks the development of the new state building gave the city more options to consider for housing police headquarters than might otherwise have been viable. While he declined to share the proposed price for the city to purchase the Casper Business Center, including the covered parking garage adjacent to the building, Napier said the city thinks it could be as much as 50% cheaper to buy an existing building than to construct a brand-new building to house police headquarters.
The city released results of a survey in spring 2020 that found about 61% of voters would support using “sixth cent” funding for a new police headquarters that would cost about $42.5 million to design, build and equip. With city staff reporting dramatic price increases for other projects in recent months amid record inflation, the price to build a new headquarters would likely be higher than that 2020 estimate.
Space for new businesses?
Could the surplus of available commercial office space attract new businesses to the Casper area? Ide expressed some optimism on the question, pointing to the Scottsdale Mint’s plans for the former Casper Star-Tribune building.
“Things come out of the blue that you don’t suspect,” Ide said, adding that when he bought the Ohio building about 25 years ag, it had been vacant for 10 years but it found new life after he redeveloped it.
While commercial office space may be available to attract new businesses to the area, there are questions about whether the shortage of available residential properties might dissuade companies from relocating to Casper. Hall said there appears to be an increase in people moving to Casper to work remotely as they may be able to find cheaper homes and sell their more expensive homes back in Colorado or the West Coast.
“I’ve talked to other brokers around town and that’s the general sense,” he said of the remote work trend.
On the other hand, with “very few homes” available in Casper, Hawley said the residential market might lead some companies away from relocating. He said big factors companies look at when considering relocating are whether there are an available workforce and available housing for employees.
“I think it is critical that we have enough supply [of residential real estate],” Hawley said.
Ide said he is less concerned about the shortage of residential properties, noting this didn’t prevent the Scottsdale Mint from choosing Casper despite the company bringing in 60 to 70 employees. Ide added his company and others are also in the process of developing new residential properties.
“I think that the free market will take care of that,” he said of demands for housing.
He acknowledged there is a lack of inventory, but said employees of companies really interested in relocating to Casper could temporarily rent until new housing developments are completed.
As to whether he’s concerned about commercial office space filling back up, Ide said he has been around Casper long enough to have some long-term optimism.
“You just have to be patient,” he said. “Things always change and you just have to have some staying power to ride out the lows.”
One further question briefly touched on by Hawley and Ide on Thursday relates to the retail store front. Hawley said there is plenty of medium and big box space available, but there is a lack of smaller retail store front space, the size of retail space he most frequently gets inquiries about.
Ide said his company doesn’t deal as much with such space, but added they are in the process of redeveloping a retail store front next to Chozen Yogurt downtown. He also noted his company was able to facilitate the build out of the first floor of the Mobil building downtown for First State Bank.
“You see a lot of things like that that just come out of nowhere,” he said of that bank’s interest in Casper. “There are always little outside deals that don’t get a lot of attention.”