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June 2017 — Office Properties Quarterly — Page 9
estate business. Colorado added more
than 1.2 billion square feet of income-
producing property between 1969 and
2015, including apartments, hospitals
and other health treatment, hotels and
motels, office and bank buildings, stores
and restaurants, and warehouses.
The second chart illustrates the annu-
al amount of new construction on a per
capita basis (to account for the increase
in population) between 1969 and 2015.
The chart is divided into the same time
periods as the previous HHI graph.
The chart indicates substantial vola-
tility in Colorado’s income property
construction cycles with a significant
increase in construction activity follow-
ing tax reform in the early 1980s.The
construction activity during this time
was generated by altering deprecia-
tion rules for income properties from
40-year, straight-line depreciation to the
15-year accelerated cost recovery sys-
tem. By the mid-1980s there was a sig-
nificant decrease in construction activ-
ity – in part because of reverting back to
a longer-life, straight-line depreciation
schedule and falling oil prices when $60
a barrel in December of 1985 dropped to
$30 a barrel by February 1986. Another
significant decrease in the property con-
struction cycle happened between 1988
and 1991 during the savings-and-loan
crisis.
Our detailed analysis looked at how
Colorado’s economic diversity had
potentially affected the commercial
real estate and apartment construction
cycles. In the end, the data suggests that
any benefits associated with increases
in economic diversity have been over-
whelmed by other factors like economic
shocks and significant changes to
Federal tax policies from outside the
state.s
Colorado
CONGRATULATIONS
for acquiring the building formerlyknown as:
Atrium I
6061 South Willow Drive, Greenwood Village, CO 80111
SIGNIFICANT IMPROVEMENTS
PLANNED...
Additional Details
Coming Soon!
Jonathan Jones
303 283 4582
Cody Sheesley
303 309 3520
Colliers International
4643 S. Ulster Street, Suite 1000 | Denver, CO 80237
Colliers International is pleased to announce its appointment as the exclusive leasing
agents for this new acquisition.
University of Colorado
One way to measure economic diversity is through the Herfindahl-Hirschman Index, commonly referred to as HHI, a measurement that collapses
the percent of employment in each industry
sector to a single number.
University of Colorado
Annual amount of new construction on a per capita basis – to account for the increase in population – between 1969 and 2015.
Market Analysis