Page 24 —
COLORADO REAL ESTATE JOURNAL
— April 6-April 19, 2016
Finance
T
he national economy
continued to make
strides in 2015, a trend
that has carried over well into
2016. Economic expansion
remained on course despite
gross domestic product growth
h a v i n g
slightly soft-
ened through
the
first
three quar-
ters of 2015.
A
strong
fourth quar-
ter made up
for the first
nine months
of the year,
resulting in
annual GDP
growth of 2.4
percent for 2015, which was
identical to 2014.
The labor market has been a
particularly bright spot in the
economy, with the unemploy-
ment rate having dropped to
4.9 percent as of January, 90
basis points below the level
seen a year earlier and 490
basis points below the level five
years ago. Additionally, Feb-
ruary posted another healthy
increase in employment, with
242,000 nonfarm payroll jobs
added, resulting in an aver-
age of 228,000 jobs per month
over the past three months.
Strong GDP growth, coupled
with healthy employment
gains and several other factors,
have brought continued eco-
nomic success on the national
level, benefitting commercial
real estate fundamentals across
the country.
In 2015, the metro Denver
area remained on the rise as it
continued to realize robust eco-
nomic and population growth,
while having one of the low-
est unemployment rates in the
nation. Denver’s unemploy-
ment rate dropped to 3 per-
cent as of January, ranking it
the second lowest among large
metropolitan statistical areas
and well below the national
unemployment rate of 4.9 per-
cent. The unemployment rate
is at its lowest level since May
2001 and well below the peak
of 9.1 percent in 2010. Denver’s
job market remained intact
through the recession com-
pared to those of most metro-
politan areas, boding well for
commercial real estate inves-
tors and owners.
The large influx of out-of-state
residents coming to the city for
jobs and a high quality of life
have helped propel Denver’s
housing market and funda-
mentals as a whole. The greater
metro Denver area, including
the Boulder MSA, had a popu-
lation of 3.07 million based on
July 2014 estimates from the
U.S. Census Bureau, ranking
it 18th among the nation’s 20
most populous MSAs. From
2010 to 2014, the population
grew by 7.6 percent, the third
highest rate of growth among
the top 20 MSAs and the high-
est outside of Texas. Since 1960,
Denver’s population has more
than doubled and is projected
to climb to 4.3 million by 2040.
This represents a net growth of
more than 39 percent, or a 1.5
percent increase in population
per year on average, which is
in line with recent growth.
While metro Denver as a
whole has been performing
remarkably well, as evidenced
by its economic standing, the
current status of the oil and gas
industry still creates heartburn
for commercial investors and
property owners in the Mile
High City. A recent increase
in layoffs and office closures
has occurred over the last 12
months, bringing additional
space to the market. While
layoff announcements and
offices going dark are never
a good thing, the events that
have occurred in metro Denver
aren’t as damaging as they ini-
tially seem.
The Worker Adjustment and
Retraining Notification Act
is a United States labor law
that protects employees, their
families and communities by
requiring most employers with
100 or more employees to pro-
vide a 60 calendar-day advance
notification of planned closings
and mass layoffs of employees,
as defined in the act. WARN
Act filings provide meaning-
ful visibility into major layoffs
within Colorado, which can be
broken down by industry and
geography. In 2015, there were
6,634 WARN Act layoffs with
43 percent occurring in trade,
transportation and utilities, fol-
lowed by 21 percent in mining,
logging and construction.
Geographically, Denver saw
2,497 layoffs, which was 38 per-
cent of the total and is in line
with the state’s population dis-
tribution. Further research on
Denver reveals that the great-
est loss of employment was
found in trade, transportation
and utilities, which represent-
ed 1,521 layoffs, or 61 percent
of Denver’s total employment
loss. This was largely driven
by Frontier Airlines having
laid off 1,152 employees. Min-
ing, logging and construction
industries within Denver saw
a total of 559 layoffs, repre-
senting only 22 percent of the
metro’s total.
So far in 2016, there have
been approximately 2,100 lay-
offs, according to WARN Act
filings reported through Febru-
ary. A majority of these layoffs
came fromprofessional services
firms in Boulder and in south-
east Denver, and were also
predominantly office consoli-
dations. As of February, there
were no WARN Act reported
layoffs from the energy sector,
but this situation continues to
evolve as new announcements
make the headlines. While the
impact of both Encana and
Anadarko’s anticipated layoffs
is still to be determined, any
additional downsizing within
Paul Donahue
Real estate analyst,
HFF, Denver
For Company Profiles, Contact
se Visit
Commercial Real Estate
Lenders
Directory
COMMERCIAL REAL ESTATE LENDERS DIRECTORY
If you would like to include your firm in this directory,
please contact Jon Stern at 303-623-1148
@
Arbor Commercial Mortgage, LLC
Bank of America Merrill Lynch –
Commercial Real Estate
Bank of Colorado
Bank of the West
Berkadia Commercial
Mortgage, LLC
Bloomfield Capital Partners, LLC
Capital Source
CBRE|Capital Markets
Chase Commercial Term Lending
Colorado Business Bank
Colorado Lending Source
Commerce Bank
Commercial Federal Bank
Essex Financial Group
Fairview Commercial Lending
FirstBank Holding Company
Front Range Bank
Grandbridge Real Estate Capital LLC
Hunt Mortgage Group
JCR Capital
Johnson Capital
JVSC-CBRE Capital Markets
KeyBank N.A., Key Commercial
Mortgage Inc.
Merchants Mortgage and Trust Corp.
Midland States Bank
Montegra Capital Resources,
Private Lender
Mutual of Omaha Bank
NorthMarq Capital, Inc.
RNB Lending Group
TABS
TCF Bank
Terrix Financial Corporation
Trans Lending Corporation
U.S. Bank – Commercial Real Estate
U.S. Bank SBA Division
Vectra Bank Colorado, N.A.
Wells Fargo SBA Lending
Wells Fargo N.A. – Commercial
Real Estate Group
While metro
Denver as a
whole has been
performing
remarkably well,
as evidenced by its
economic standing,
the current status
of the oil and
gas industry still
creates heartburn
for commercial
investors and
property owners in
the Mile High City.
