Q & A: Colorado Cannabis Commercial Real Estate with Avalon Realty Advisors

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PHOTO Credit: Veronica Carpio via Jason Thomas Facebook account

Jason Thomas of Avalon Realty Advisors is not your average real estate broker. He is a pioneer in the marijuana version of the Dotcom Boom in what’s commonly being referred to as ‘The Green Rush’. At the center of it all in Denver and surrounding areas, Jason and his partner Val Lundlie are locating properties for those interested in space for legal large scale grow operations due to the high demand for cannabis that the state is seeing in its first year of recreational sales. In addition to seeing great success with his business, Jason is also a member of Law Enforcement Against Prohibition (LEAP), a nonprofit reform group that includes police officers, judges, prosecutors and other criminal justice professionals who offer expert commentary to further the cause of ending the current drug war. Avalon Realty Advisors is the perfect example of a solid business that weaves advocacy into its working days, offering the market what it demands and being conscientious about doing so.

What is your history with Law Enforcement Against Prohibition (LEAP)?

I became a member of LEAP in 2001 and have been very active in speaking out against our decades old drug policies. During the campaign for Amendment 64 (Colorado’s marijuana legalization initiative), I was an integral part of advocating for its passage through educating Colorado voters about marijuana legalization and the significant benefits to Colorado communities.

How did you become involved with commercial real estate and business consultants who specialize in the Medical and Recreational Marijuana industries?

I’ve been in commercial real estate since 1997, starting as a temporary secretary, then became a marketing director, leasing and sales broker, asset, property and construction manager, strategic advisor and personal investor. Since joining the cannabis industry in 2009, I’ve been able to understand and synthesize the laws, rules and regulations of the industry to successfully navigate its business challenges, especially as they relate to facilities. As a result, I’ve been able to bring my commercial real estate and industry experience together in ways than any other broker or real estate advisor working in the industry can.

Jason Thomas and Val Lundlie

Jason and Val at their premier Client Appreciation Party in Denver this past spring. Photo credit: Ladybud Magazine

What kind of services does Avalon Realty Advisors provide its clients?

We provide commercial leasing and sale brokerage, construction management, brokering the purchase and sale of existing cannabis companies, sourcing investment capital and strategic advisory.

How is business going since you debuted?

Business has been incredible since launching Avalon in 2013. With the unprecedented leasing and sale activity for cannabis grow facilities, we’ve been able to achieve very early success and have completed numerous complex transactions.

You recently referred to the cannabis industry as being quite similar to the Dotcom Boom, can you explain what you mean by that?

During the Dotcom Boom, office space was absorbed at a velocity and price appreciation, we’re currently experiencing in the cannabis industry. Vacancy rates in “tech submarkets” dipped below 1% and vacancy rate for Class A office and office/flex properties neared 3% market wide. Currently, cannabis real estate vacancy rates are around 2%, with market-wide vacancy at 5% or less. Additionally, investment capital has been flowing into Colorado’s cannabis industry the past six months in amounts proportionate to the scale of the Dotcom Boom. It is also important to note that the Dotcom phenomena went through a compressed real estate cycle, eventually leading to a market correction. I believe that the marijuana real estate sector is poised for a similar correction later this year, albeit with less impact on the overall Colorado economy than the Dotcom Boom.  

 In what publications have you appeared recently?

I’ve been featured in articles in the Denver Post, Fast Company and Fortune and have been on numerous radio programs The Bill Good Show, The Pat Thurston Show and on Denmark National Broadcasting

To which cannabis industry trade organizations do you have a membership? How has that been helpful to you?

We are members of the National Cannabis Industry Association, Marijuana Policy Project, the Denver Metro Association of Brokers and the Colorado Realtors Association. By being active members of these organizations, we are able to stay on top of the changing legal and business landscape of the cannabis movement, which allows us to quickly adapt to changing market conditions.

How much have prices inflated from when you started Avalon Realty Advisors since its inception?

Since January 2014, industrial real estate pricing for sale and lease have increased two to three fold or more. These properties were generally constructed from the 1940s to 1970s and typically lease for around $5.00 per square foot, triple-net and sell for $40.00 to $55.00 per square foot to mainstream companies. Due to the incredible demand and a lack of appropriately located properties, those same properties are now leasing for $12.00 to $14.00 per square foot, triple-net and are selling in the $80.00 per square foot range. 

How has legalization benefited your business and personal life?

The legalization of marijuana for responsible adult use has opened the door for hundreds of new businesses and for the expansion of hundreds more, providing us with the ability to a vast array of clients, from local entrepreneurs to institutional investors. Without legalization, the marijuana industry would have continued to gestate, but at a much slower pace. As a result of the industry’s torrid expansion, our company has experienced great success in a short amount of time. Personally, legalization of marijuana has benefited me through knowing that marijuana is no longer looked down upon as just a “drug” and an illegal substance, but a plant with far reaching medicinal properties and applications. As someone who uses cannabis medically and recreationally, legalization has removed some of the stigma for me and many others who choose cannabis over other traditional medicines and other harmful substances like alcohol.  

Do you have plans to expand beyond Colorado?

Jason Thomas 2

“As someone who uses cannabis medically and recreationally, legalization has removed some of the stigma for me and many others who choose cannabis over other traditional medicines and other harmful substances like alcohol.”

Yes, we are in discussions with several groups that are expanding throughout the country and expect to consult in geographic areas that are capitalizing on the “green rush.” We anticipate working in Florida, Illinois, New York and possibly Canada very soon. With the growth of the industry over the years to come, and possibly become the Nation’s first the cannabis industry real estate brand.

What kind of properties do you have available at the moment?

We don’t generally list properties to sell or lease, but rather, we use our real estate relationships and sources to locate properties that are both “on” and “off” market. Again, this is an area that sets us apart from our competition; that of having deeper relationships with the right market segments and the tools to be successful.