CREJ

Page 2

— Office Properties Quarterly — December 2016

CONTENTS

Letter from the Editor

4 6 8 10 12 14 16 18 20 22 24

olorado’s employment is

expected to grow by 2.4 per-

cent in 2017, adding a variety

of jobs in almost every sec-

tor, according to the Colorado

Business Economic Outlook Forum,

put together by the University of Colo-

rado Boulder’s Leeds School of Busi-

ness research division. The forecast

calls for a gain of 63,400 jobs in Colo-

rado in 2017. All but the state’s natural

resources and min-

ing industry are pre-

dicted to see gains.

Leading this

growth is construc-

tion. The industry

is expected to see

5.7 percent growth.

Employment for res-

idential, nonresiden-

tial and nonbuilding

(such as roadways, bridges and dams)

construction will grow from 157,000

jobs to 166,000 jobs.

While many in the real estate indus-

try are expecting to see a decrease in

multifamily construction next year,

following years of busy activity, the

Leeds report predicts that single-

family home construction will over-

compensate for any fall in multifamily

construction. In fact, single-family

permit growth is anticipated to exceed

the national average by 8 percentage

points.

In terms of office construction, activ-

ity remains busy in the downtown

area, but it is not limited to the core.

Interestingly, metro Denver’s suburban

office construction activity is outpac-

ing the development occurring down-

town, CBRE’s Hilary Barnett points out

in her articl

e on Page 4.

Other industries anticipated to enjoy

three percent or higher employment

growth include leisure and hospital-

ity, education and health services, and

financial activities.

“Colorado will continue to rank

among the top 10 states nationally

for employment growth in 2017, a

six-year standing,” said economist

RichardWobbekind with the CU Boul-

der’s Leeds School of Business. “And

it is poised for continued long-term

growth, boasting a skilled workforce

and high-tech, diversified economy;

relatively low cost of doing business;

global economic access; and excep-

tional quality of life.”

While all of this bodes well for the

commercial office properties market –

a diverse employment base helps cre-

ate resiliency in our marketplace – it is

important to acknowledge that more

must be done to maintain these suc-

cesses.

Kelly Brough with Denver Metro

Chamber of Commerce authors an

article on

Page 8 t

hat highlights how

Denver is succeeding in attracting

employers. She also addresses some

of the challenges the city needs to

prioritize and fix in order to remain as

competitive as it is now.

While JLL’s Peter Merrion points out

an alarming truth the must be recon-

ciled – while we end up at the top of

the list in terms of educated workers,

a large number of those employees

are transplants. Addressing this Colo-

rado paradox will be critical in main-

taining this reputation in the future,

he writes o

n Page 18.

Michelle Z. Askeland

maskeland@crej.com Protect employment gains Suburb construction outpaces city activity Hilary Barnett Boulder’s office market continues in its own bubble Angela Topel Denver strong for business despite challenges Kelly Brough Why we are not buying office product in Denver Jason Shepherd Insights into financing Denver’s office market Jeff Halsey and Brady O’Donnell Is the co-working office space trend here to stay? Adam Sands Co-working space evolves to focus on community Chad Johnson Education, engagement keys to keep CO ‘sticky’ Peter Merrion Denver shores up in the face of lower oil prices Nicholas J. Pavlakovich Leasing to federal agencies just got easier James Randle Budgets drive how to ‘millennialize’ the office Abbey Lyon

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