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Page 18 — Office Properties Quarterly — December 2016
W e’ve all seen the numbers;
Colorado’s population grew
by nearly 102,000 people in
2015. Denver is the fastest-
growing major Ameri-
can city after Austin, Texas, and
ranked No. 1 in U.S. News and World
Report’s 2016 Best Places to Live and
No. 1 on Forbes’ list of best places
for business and careers in 2016.
Despite our booming population,
our unemployment rates remain
among the lowest in the nation at
3.8 percent, more than a point below
the 4.9 percent national average,
according to Bloomberg data. And
the outlook remains rosy. The Mile
High City is expected to add 130,000
net new jobs by 2020.
So how do we keep the streak alive
and ensure that Colorado remains
a great place to live for all of our
residents, as well as a continued
draw for business and investment?
And from a real estate perspective,
we must consider how we can keep
pace and create conditions for sus-
tained growth in the market.
As we look at market dynamics
and metrics such as gross metropol-
itan product, population growth, net
migration, unemployment, personal
income growth and housing permits,
there are a few key factors Colorado
needs to address if we want to make
the streak stick.
Address the “Colorado Paradox”
Denver consistently ranks among
the top metro areas for attracting
well-educated workers from out of
state. We recently ranked 16th out
of 150 large cities in the WalletHub’s
“2015 Most and Least Educated Cit-
ies” report.
The problem is,
we’re not doing a
great job of sup-
porting that educa-
tional attainment
at home. While we
are in the top for
well-educated resi-
dents, we are 46th
in terms of the
percentage of those
born in Colorado
with bachelor’s
degrees or higher.
The fact that we attract well-edu-
cated workers but few of them are
actually educated in state is known
as the “Colorado paradox.”
The way we invest (or, more accu-
rately, don’t invest) in education
starting at the earliest levels may
have something to do with it. Colo-
rado ranks 47th in the preschool
poverty gap, according to stats from
nonpartisan educational activist
organization Great Education Colo-
rado. We rank a dismal 43rd in per-
pupil spending and 38th in spending
on education overall.
It’s not shocking then that the
Denver Business Journal reported
earlier this year that our state’s
public schools ranked 119 out of 150
large metro areas for school quality
and enrollment levels.
At the college level, the picture is
similar, and our booming economy
doesn’t seem to have translated into
education funding.
In fact, between 2008 and 2015,
per student appropriations fell 16.3
percent. Colorado currently ranks
46th in the nation in terms of state
funding support for higher educa-
tion, according to a study from the
Colorado-based State Higher Educa-
tion Executive Officers Association
and Illinois State University. Addi-
tionally, Colorado’s public colleges
and universities retain and graduate
students at below the national aver-
age rate, potentially indicating a
problem with college prep and readi-
ness among freshman.
Unless we address this paradox
and the pipeline problem we’re cre-
ating at home, it will be challenging
to continue to attract and retain the
educated millennial workforce, par-
ticularly as they look to raise fami-
lies of their own. From a real estate
perspective, this ultimately will
impact office-using jobs and leasing
volume.
• Continue fostering engagement. We
all know Colorado’s outdoor attrac-
tions are huge draws for tourists and
locals alike, but you may not have
guessed the state also ranks No. 1
in the nation for participation in
the arts, according to data from the
National Endowment for the Arts.
The industry represented $1.8 billion
in economic activity in 2015.
The impact of a vibrant arts cul-
ture can be hard to quantify in
terms of direct impact on the over-
all economic vitality of a city, but
we know that it can boost tourism,
build a sense of community, elevate
our national reputation and improve
quality of life among residents.
There also is strong evidence that
the young, well-educated workforce
who is attracted to Colorado is more
likely to value a vibrant cultural
scene. People ages 18 to 24 partici-
pate in the arts at higher rates than
older adults, according to the NEA
study, and higher levels of education
correlate with arts engagement.
Just as with education, in order to
ensure continued vitality, it’s impor-
tant that we look at how we’re sup-
porting culture and arts engagement
in the next generation. Children who
visited art museums are about five
times as likely to visit as an adult.
Supporting cultural engagement
and activity is part of creating a
great quality of life here in Colo-
rado now and for years to come. We
would be wise to remember that as
our population grows and continue
to support a robust arts and cultural
community.
• Invest in forward-thinking infra-
structure. Bloomberg recently cited
Colorado as a success story for infra-
structure spending. From Denver
International Airport to FasTracks,
from the National Western Center
to Brighton Boulevard, the state has
made and continues to make signifi-
cant investment in improving infra-
structure in Colorado.
Bottom line: If you build it, they
will come. Take Union Station, for
example. The initial $500 million
investment in the Denver Union
Station complex has yielded over $2
billion in private investment. That is
a massive multiplier that has led to
more jobs and an increase in com-
mercial space from apartments to
office buildings.
Recognizing the impact of infra-
structure investment, Gov. John
Hickenlooper recently said his
administration sees it as the central
element around which Colorado will
build its new economy.
Peter Merrion
Vice president,
JLL, Denver
Market Drivers