february 2015 downtown denver economic update
DESCRIPTION
Contains the latest available economic information about Downtown Denver.TRANSCRIPT
DOWNTOWN DENVER ECONOMIC UPDATEFEBRUARY 2015
This report contains the most recent economic indicators available for Downtown Denver and the Business Improvement District. According to the most recent indicators, Downtown Denver economic conditions continue to improve. Employment growth is strong, consumers are spending at a healthy pace, and the downtown commercial real estate markets reported rising average lease rates and declining vacancy.
Summary
EMPLOYMENT RETAIL SALES RESIDENTIAL REAL ESTATE OFFICE MARKET HOTEL MARKET
DOWNTOWN DENVER BID
Industry Share 2Q13 2Q14 Change 2Q13 2Q14 Change
Professional & Business Services 31% 35,625 36,972 3.8% 31,623 32,103 1.5%
Government 19% 23,430 23,053 -1.6% 20,999 20,718 -1.3%
Leisure & Hospitality 16% 18,870 19,523 3.5% 12,782 13,099 2.5%
Financial Activities 12% 14,435 14,658 1.5% 11,491 11,284 -1.8%
Natural Resources & Construction 9% 8,931 10,619 18.9% 8,654 9,793 13.2%
Information 3% 4,243 4,224 -0.4% 3,563 3,513 -1.4%
Wholesale & Retail Trade 3% 3,935 3,968 0.9% 2,951 2,943 -0.3%
Other Services 2% 2,743 2,732 -0.4% 2,236 2,346 4.9%
Education & Health Services 2% 2,687 2,705 0.7% 1,581 1,557 -1.5%
Transp., Warehousing & Utilities 1% 1,449 1,513 4.4% 1,351 1,393 3.2%
Manufacturing 1% 859 903 5.1% 113 121 7.7%
Total 117,206 120,871 3.1% 97,343 98,872 1.6%
Employment levels rose in both Downtown Denver and the Business Improvement District (BID) between the second quarters of 2013 and 2014, with employment levels rising 3.1 percent and 1.6 percent, respectively. The natural resources and construction supersector continued to report the strongest growth, generating an additional 1,700 jobs over-the-year in Downtown Denver.
109,000
111,000
113,000
115,000
117,000
119,000
121,000
2Q144Q132Q134Q122Q124Q112Q114Q102Q10
EMPLOYMENT
DOWNTOWN DENVER
HISTORICAL EMPLOYMENT
+3.1%
2Q 2014 Employment Trends
+3.7%
+3.4%
Downtown Denver
+2.0%
Metro Denver
Colorado
United States
Sources: Colorado Department of Labor and Employment, Quarterly Census of Employment and Wages; Colorado Department of Labor and Employment, Labor Market Information, Current Employment Statistics; U.S. Bureau of Labor Statistics; Development Research Partners; Downtown Denver Partnership.
Residential development in Downtown and its City Center neighbor-hoods continues at a brisk pace with 1,669 residential units created in 2014. Recently completed projects include 16M, AMLI at Riverfront Park, Verve, and Broadstone Blake Street. Skyhouse Denver, one of the tallest planned rental towers in Downtown’s history, recently broke ground and will add 354 new apartments to the Central Busi-ness District when the 26-story project is completed in the summer of 2016. Another new 34-story rental tower, The Confluence, recently commenced construction in the Central Platte Valley neighborhood and will add 288 new units when it is completed in 2017. On the for-sale front, there are 189 townhomes currently under construction or planned throughout the Downtown neighborhoods.
For more information about development in Downtown Denver, refer to the Quarterly Development Map Updates at www.downtowndenver.com/resources-downloads.
RESIDENTIAL DEVELOPMENT
City CenterNeighborhood
For-Sale Units
Rental Units
Number of Projects
Auraria - - -
Ballpark - 315 2
Capitol Hill 8 423 5
Central Business District - 776 3
CPV/Denver Union Station - 2,763 10
Curtis Park/Five Points 73 369 7
Golden Triangle 17 938 5
Highland 36 431 6
Jefferson Park 55 332 3
La Alma/Lincoln Park - 745 2
Lower Downtown - - -
Uptown - 372 1
Total 189 7,464 44
News & Rankings
• White Lodging announced plans for an 18-story, dual-brand hotel tower on 15th and California Streets. The two new hotels, an AC Hotel by Marriott and a Le Méridien, will open in 2017.
• Construction began on Skyhouse Denver, a 26-story luxury apartment building at Broadway and East 18th Avenue. The 354-unit apartment building will be completed in 2016.
• WorldRemit, a London-based financial services firm, chose to locate their North American headquarters in Downtown Denver.
• 1401 17th Street, an office tower in LoDo, was acquired by Chicago-based Zeller Realty Group for $75 million. Other recent office building sales include 700 Broadway, purchased by CBRE Global Investors, and 1901 Broadway, purchased by Velocis.
• A report by Coldwell Banker concluded that Denver is the best commercial real estate market in the U.S. The annual report examines vacancy and rental rates for office, retail and multifamily markets as well as population and unemployment.
• Travel and lifestyle website, Matador Network, named Denver the 7th best place for coffee lovers in the world.
• NerdWallet found Denver is the 5th best place for job seekers in 2015. The report analyzed job availability, workforce growth and affordability.
• Real estate blog, movoto.com found Denver to be the 6th most creative city in the U.S. The ranking was based on the level of arts employment as well as the number of art galleries, art supply stores and bookstores in each city.
About This Report
This report includes the most recent quarterly data available and covers economic conditions in three areas. The
first and smallest area, the Business Improvement District (BID), is the core of Downtown Denver, The second area,
“Downtown,” includes the BID as well as a few surrounding districts such as the Golden Triangle. The third area, City Center
Neighborhoods, includes the BID, Downtown, and surrounding residential neighborhoods such as Uptown and Highland.
Data in this report was provided by Development Research Partners. For questions or comments, please contact the
Downtown Denver Partnership Research Department at 303-534-6161.
Sources: Downtown Denver Partnership, Metro Denver Economic Development Corporation, Denver Business Journal, Denver Post.
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
RESIDENTIAL DEVELOPMENTS PLANNED OR UNDERWAY AS OF FEBRUARY 2015
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
Residential real estate indicators from the third quarter in Downtown Denver and the City Center Neighborhoods were mixed. Fewer homes sold in both areas due to record low inventory. In Downtown Denver, average sales price and price per square foot for homes sold also decreased. However, in City Center neighborhoods, the average sales price and price per square foot of homes sold increased.
RESIDENTIAL REAL ESTATE
DOWNTOWN CITY CENTER NEIGHBORHOODS METRO DENVER
3Q13 3Q14 Change 3Q13 3Q14 Change 3Q13 3Q14 Change
CONDOMINIUMS/TOWNHOMES
Total Homes Sold 174 153 -12.1% 399 353 -11.5% 4,163 4,683 12.5%
Ave. Sales Price $434,671 $420,983 -3.1% $316,033 $327,106 3.5% $201,016 $202,745 0.9%
Ave. Price/sf $370 $355 -4.2% $307 $310 0.9% $172 $174 1.3%
SINGLE FAMILY HOMES
Total Homes Sold 0 0 --% 109 91 -16.5% 13,382 13,514 1.0%
Ave. Sales Price N/A N/A --% $396,409 $445,676 12.4% $347,994 $363,838 4.6%
Ave. Price/sf N/A N/A 0.0% $276 $294 6.3% $190 $201 5.7%
ALL HOMES
Total Homes Sold 174 153 -12.1% 508 444 -12.6% 17,545 18,197 3.7%
Ave. Sales Price $434,671 $420,983 -3.1% $333,279 $445,676 5.4% $313,120 $322,381 3.0%
Ave. Price/sf $370 $355 -4.2% $299 $294 2.4% $187 $196 4.7%
Retail sales tax collections in Downtown Denver were 14.4% higher in the third quarter of 2014 compared with the prior year. Hotels & Other Accommodation Services, Downtown Denver’s second largest retail category, increased by over 30% for the second quarter in a row.
RETAIL SALES
DOWNTOWN BID
Industry Share 3Q13 3Q14 Change 3Q13 3Q14 Change
Restaurants 48% $4,670,185 $5,312,649 13.8% $3,755,297 $4,052,709 7.9%
Hotel & Other Accommodation Svcs. 19% $1,613,875 $2,135,642 32.3% $1,415,972 $1,733,628 22.4%
Clothing/Accessory Stores 7% $734,250 $724,522 -1.3% $729,861 $721,718 -1.1%
Miscellaneous Stores 6% $684,898 $714,677 4.3% $309,694 $320,934 3.6%
Manufacturing 5% $483,213 $509,897 5.5% $406,029 $411,967 1.5%
Information Producers/Distributors 3% $367,082 $379,268 3.3% $365,819 $375,355 2.6%
Motor Vehicles & Auto Parts 3% $379,657 $371,715 -2.1% $195,856 $171,022 -12.7%
Other Categories (under 3% each of total)
9% $774,452 $954,856 23% $461,310 $595,167 129%
Total $9,707,612 $11,103,226 14.4% $7,639,838 $8,382,500 9.7%
RETAIL SALES
HOTEL MARKETIndicators show the hotel market in Downtown Denver has been very strong as of the end of 2014. Occupancy rates, average daily room rates and RevPAR are all are higher than 2013 year-to-date levels. Also, retail sales tax collections from Hotel and Other Accommodation Services have been posting significant increases in recent quarters.
OCCUPANCY RATE AVERAGE DAILY ROOM RATE
REVENUE PER AVAILABLE ROOM
(REVPAR)
2014 Year-to-Date* 78.2% $171.86 $134.34
2013 Year-to-Date* 73.2% $158.64 $116.16
Change 6.8% 8.3% 15.7%
*Data through end of December 2014
The commercial real estate market improved in the Downtown Denver market area between the fourth quarters of 2013 and 2014. Downtown Denver reported declining vacancy rates in both the office and retail markets, where rates fell 2 percentage points and 0.4 percentage points, respectively. The average lease rate for office space in Downtown Denver rose 7.3 percent, while the average lease rate for retail space rose 39.1 percent.
OFFICE, RETAIL & INDUSTRIAL MARKETVACANCY RATE* AVG. LEASE RATE*
4Q13 4Q14 Change 4Q13 4Q14 Change
OFFICE
BID 12.4% 10.4% -2.0 $29.37 $31.45 7.1%
Downtown 11.7% 9.7% -2.0 $29.03 $31.16 7.3%
Metro Denver 11.2% 10.0% -1.2 $22.06 $22.87 3.7%
INDUSTRIAL
BID ** 0.0% 0.0% 0.0 - - -
Downtown 0.0% 1.3% 1.3 $11.04 $11.92 8.0%
Metro Denver 3.9% 3.0% -0.9 $5.07 $6.10 20.3%
RETAIL
BID 7.0% 6.5% -0.5 $20.99 $30.36 44.6%
Downtown 4.8% 4.4% -0.4 $20.13 $28.01 39.1%
Metro Denver 6.0% 5.6% -0.5 $15.40 $15.47 0.5%
HISTORICAL OFFICE VACANCY RATE HISTORICAL OFFICE AVE. LEASE RATE
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00
$32.00
4Q142Q144Q132Q134Q122Q124Q112Q114Q102Q104Q099.0%
10.5%
12.0%
13.5%
15.0%
4Q142Q144Q132Q134Q122Q124Q112Q114Q102Q104Q09
Sources: City and County of Denver Office of the Controller, Colorado Comps. Sources: CoStar Realty Information, Downtown Denver Partnership, Rocky Mountain Lodging Report.
* Vacancy and average lease rates are for direct space only. Retail and industrial rates are triple-net.
** The BID contains one industrial property, which is occupied.
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
Residential real estate indicators from the third quarter in Downtown Denver and the City Center Neighborhoods were mixed. Fewer homes sold in both areas due to record low inventory. In Downtown Denver, average sales price and price per square foot for homes sold also decreased. However, in City Center neighborhoods, the average sales price and price per square foot of homes sold increased.
RESIDENTIAL REAL ESTATE
DOWNTOWN CITY CENTER NEIGHBORHOODS METRO DENVER
3Q13 3Q14 Change 3Q13 3Q14 Change 3Q13 3Q14 Change
CONDOMINIUMS/TOWNHOMES
Total Homes Sold 174 153 -12.1% 399 353 -11.5% 4,163 4,683 12.5%
Ave. Sales Price $434,671 $420,983 -3.1% $316,033 $327,106 3.5% $201,016 $202,745 0.9%
Ave. Price/sf $370 $355 -4.2% $307 $310 0.9% $172 $174 1.3%
SINGLE FAMILY HOMES
Total Homes Sold 0 0 --% 109 91 -16.5% 13,382 13,514 1.0%
Ave. Sales Price N/A N/A --% $396,409 $445,676 12.4% $347,994 $363,838 4.6%
Ave. Price/sf N/A N/A 0.0% $276 $294 6.3% $190 $201 5.7%
ALL HOMES
Total Homes Sold 174 153 -12.1% 508 444 -12.6% 17,545 18,197 3.7%
Ave. Sales Price $434,671 $420,983 -3.1% $333,279 $445,676 5.4% $313,120 $322,381 3.0%
Ave. Price/sf $370 $355 -4.2% $299 $294 2.4% $187 $196 4.7%
Retail sales tax collections in Downtown Denver were 14.4% higher in the third quarter of 2014 compared with the prior year. Hotels & Other Accommodation Services, Downtown Denver’s second largest retail category, increased by over 30% for the second quarter in a row.
RETAIL SALES
DOWNTOWN BID
Industry Share 3Q13 3Q14 Change 3Q13 3Q14 Change
Restaurants 48% $4,670,185 $5,312,649 13.8% $3,755,297 $4,052,709 7.9%
Hotel & Other Accommodation Svcs. 19% $1,613,875 $2,135,642 32.3% $1,415,972 $1,733,628 22.4%
Clothing/Accessory Stores 7% $734,250 $724,522 -1.3% $729,861 $721,718 -1.1%
Miscellaneous Stores 6% $684,898 $714,677 4.3% $309,694 $320,934 3.6%
Manufacturing 5% $483,213 $509,897 5.5% $406,029 $411,967 1.5%
Information Producers/Distributors 3% $367,082 $379,268 3.3% $365,819 $375,355 2.6%
Motor Vehicles & Auto Parts 3% $379,657 $371,715 -2.1% $195,856 $171,022 -12.7%
Other Categories (under 3% each of total)
9% $774,452 $954,856 23% $461,310 $595,167 129%
Total $9,707,612 $11,103,226 14.4% $7,639,838 $8,382,500 9.7%
RETAIL SALES
HOTEL MARKETIndicators show the hotel market in Downtown Denver has been very strong as of the end of 2014. Occupancy rates, average daily room rates and RevPAR are all are higher than 2013 year-to-date levels. Also, retail sales tax collections from Hotel and Other Accommodation Services have been posting significant increases in recent quarters.
OCCUPANCY RATE AVERAGE DAILY ROOM RATE
REVENUE PER AVAILABLE ROOM
(REVPAR)
2014 Year-to-Date* 78.2% $171.86 $134.34
2013 Year-to-Date* 73.2% $158.64 $116.16
Change 6.8% 8.3% 15.7%
*Data through end of December 2014
The commercial real estate market improved in the Downtown Denver market area between the fourth quarters of 2013 and 2014. Downtown Denver reported declining vacancy rates in both the office and retail markets, where rates fell 2 percentage points and 0.4 percentage points, respectively. The average lease rate for office space in Downtown Denver rose 7.3 percent, while the average lease rate for retail space rose 39.1 percent.
OFFICE, RETAIL & INDUSTRIAL MARKETVACANCY RATE* AVG. LEASE RATE*
4Q13 4Q14 Change 4Q13 4Q14 Change
OFFICE
BID 12.4% 10.4% -2.0 $29.37 $31.45 7.1%
Downtown 11.7% 9.7% -2.0 $29.03 $31.16 7.3%
Metro Denver 11.2% 10.0% -1.2 $22.06 $22.87 3.7%
INDUSTRIAL
BID ** 0.0% 0.0% 0.0 - - -
Downtown 0.0% 1.3% 1.3 $11.04 $11.92 8.0%
Metro Denver 3.9% 3.0% -0.9 $5.07 $6.10 20.3%
RETAIL
BID 7.0% 6.5% -0.5 $20.99 $30.36 44.6%
Downtown 4.8% 4.4% -0.4 $20.13 $28.01 39.1%
Metro Denver 6.0% 5.6% -0.5 $15.40 $15.47 0.5%
HISTORICAL OFFICE VACANCY RATE HISTORICAL OFFICE AVE. LEASE RATE
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00
$32.00
4Q142Q144Q132Q134Q122Q124Q112Q114Q102Q104Q099.0%
10.5%
12.0%
13.5%
15.0%
4Q142Q144Q132Q134Q122Q124Q112Q114Q102Q104Q09
Sources: City and County of Denver Office of the Controller, Colorado Comps. Sources: CoStar Realty Information, Downtown Denver Partnership, Rocky Mountain Lodging Report.
* Vacancy and average lease rates are for direct space only. Retail and industrial rates are triple-net.
** The BID contains one industrial property, which is occupied.
DOWNTOWN DENVER ECONOMIC UPDATEFEBRUARY 2015
This report contains the most recent economic indicators available for Downtown Denver and the Business Improvement District. According to the most recent indicators, Downtown Denver economic conditions continue to improve. Employment growth is strong, consumers are spending at a healthy pace, and the downtown commercial real estate markets reported rising average lease rates and declining vacancy.
Summary
EMPLOYMENT RETAIL SALES RESIDENTIAL REAL ESTATE OFFICE MARKET HOTEL MARKET
DOWNTOWN DENVER BID
Industry Share 2Q13 2Q14 Change 2Q13 2Q14 Change
Professional & Business Services 31% 35,625 36,972 3.8% 31,623 32,103 1.5%
Government 19% 23,430 23,053 -1.6% 20,999 20,718 -1.3%
Leisure & Hospitality 16% 18,870 19,523 3.5% 12,782 13,099 2.5%
Financial Activities 12% 14,435 14,658 1.5% 11,491 11,284 -1.8%
Natural Resources & Construction 9% 8,931 10,619 18.9% 8,654 9,793 13.2%
Information 3% 4,243 4,224 -0.4% 3,563 3,513 -1.4%
Wholesale & Retail Trade 3% 3,935 3,968 0.9% 2,951 2,943 -0.3%
Other Services 2% 2,743 2,732 -0.4% 2,236 2,346 4.9%
Education & Health Services 2% 2,687 2,705 0.7% 1,581 1,557 -1.5%
Transp., Warehousing & Utilities 1% 1,449 1,513 4.4% 1,351 1,393 3.2%
Manufacturing 1% 859 903 5.1% 113 121 7.7%
Total 117,206 120,871 3.1% 97,343 98,872 1.6%
Employment levels rose in both Downtown Denver and the Business Improvement District (BID) between the second quarters of 2013 and 2014, with employment levels rising 3.1 percent and 1.6 percent, respectively. The natural resources and construction supersector continued to report the strongest growth, generating an additional 1,700 jobs over-the-year in Downtown Denver.
109,000
111,000
113,000
115,000
117,000
119,000
121,000
2Q144Q132Q134Q122Q124Q112Q114Q102Q10
EMPLOYMENT
DOWNTOWN DENVER
HISTORICAL EMPLOYMENT
+3.1%
2Q 2014 Employment Trends
+3.7%
+3.4%
Downtown Denver
+2.0%
Metro Denver
Colorado
United States
Sources: Colorado Department of Labor and Employment, Quarterly Census of Employment and Wages; Colorado Department of Labor and Employment, Labor Market Information, Current Employment Statistics; U.S. Bureau of Labor Statistics; Development Research Partners; Downtown Denver Partnership.
Residential development in Downtown and its City Center neighbor-hoods continues at a brisk pace with 1,669 residential units created in 2014. Recently completed projects include 16M, AMLI at Riverfront Park, Verve, and Broadstone Blake Street. Skyhouse Denver, one of the tallest planned rental towers in Downtown’s history, recently broke ground and will add 354 new apartments to the Central Busi-ness District when the 26-story project is completed in the summer of 2016. Another new 34-story rental tower, The Confluence, recently commenced construction in the Central Platte Valley neighborhood and will add 288 new units when it is completed in 2017. On the for-sale front, there are 189 townhomes currently under construction or planned throughout the Downtown neighborhoods.
For more information about development in Downtown Denver, refer to the Quarterly Development Map Updates at www.downtowndenver.com/resources-downloads.
RESIDENTIAL DEVELOPMENT
City CenterNeighborhood
For-Sale Units
Rental Units
Number of Projects
Auraria - - -
Ballpark - 315 2
Capitol Hill 8 423 5
Central Business District - 776 3
CPV/Denver Union Station - 2,763 10
Curtis Park/Five Points 73 369 7
Golden Triangle 17 938 5
Highland 36 431 6
Jefferson Park 55 332 3
La Alma/Lincoln Park - 745 2
Lower Downtown - - -
Uptown - 372 1
Total 189 7,464 44
News & Rankings
• White Lodging announced plans for an 18-story, dual-brand hotel tower on 15th and California Streets. The two new hotels, an AC Hotel by Marriott and a Le Méridien, will open in 2017.
• Construction began on Skyhouse Denver, a 26-story luxury apartment building at Broadway and East 18th Avenue. The 354-unit apartment building will be completed in 2016.
• WorldRemit, a London-based financial services firm, chose to locate their North American headquarters in Downtown Denver.
• 1401 17th Street, an office tower in LoDo, was acquired by Chicago-based Zeller Realty Group for $75 million. Other recent office building sales include 700 Broadway, purchased by CBRE Global Investors, and 1901 Broadway, purchased by Velocis.
• A report by Coldwell Banker concluded that Denver is the best commercial real estate market in the U.S. The annual report examines vacancy and rental rates for office, retail and multifamily markets as well as population and unemployment.
• Travel and lifestyle website, Matador Network, named Denver the 7th best place for coffee lovers in the world.
• NerdWallet found Denver is the 5th best place for job seekers in 2015. The report analyzed job availability, workforce growth and affordability.
• Real estate blog, movoto.com found Denver to be the 6th most creative city in the U.S. The ranking was based on the level of arts employment as well as the number of art galleries, art supply stores and bookstores in each city.
About This Report
This report includes the most recent quarterly data available and covers economic conditions in three areas. The
first and smallest area, the Business Improvement District (BID), is the core of Downtown Denver, The second area,
“Downtown,” includes the BID as well as a few surrounding districts such as the Golden Triangle. The third area, City Center
Neighborhoods, includes the BID, Downtown, and surrounding residential neighborhoods such as Uptown and Highland.
Data in this report was provided by Development Research Partners. For questions or comments, please contact the
Downtown Denver Partnership Research Department at 303-534-6161.
Sources: Downtown Denver Partnership, Metro Denver Economic Development Corporation, Denver Business Journal, Denver Post.
DOWNTOWN DENVER ECONOMIC UPDATE FEBRUARY 2015
RESIDENTIAL DEVELOPMENTS PLANNED OR UNDERWAY AS OF FEBRUARY 2015