CREJ

Page 4 — Office Properties Quarterly — September 2018 www.crej.com Market Update ABBY PATTILLO 303 283 4579 abby.vollmer@colliers.com KATY SHEEHY 303 283 4563 katy.sheehy@colliers.com ROBERT WHITTELSEY 303 283 4581 robert.whittelsey@colliers.com No warranty or representation is made as to the accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. 5299 DTC BLVD | GREENWOOD VILLAGE, CO 80111 Rejuvenate. Recreate. Collaborate. PRE FON SPA ...where your employees want to go! Within steps, your employees will enjoy the various restaurants and amenities surrounding Prentice Point - the most walkable amenity friendly building in the Denver Tech Center! Colliers International is pleased to announce it has been selected as the exclusive Leasing Team by SteelWave. Maintaining momentum: 2018 economic update A s of August, the current eco- nomic expansion has been underway for 110 months, the second-longest expan- sion since tracking began in 1854. The longest expansion was from March 1991 to March 2001, a period of 120 months. Most analysts expect that the U.S. economy will maintain its current momentum through 2019, resulting in this eco- nomic cycle ultimately being the longest in U.S. history. After posting a 2.2 percent increase in the first quarter of 2018, U.S. gross domestic product growth accelerated to a 4.2 percent annual- ized rate in the second quarter. GDP is expected to maintain momentum in the last half of the year, with an average 2.9 percent increase in 2018 and 2.7 percent increase in 2019. Of the four components of GDP, consumer spending has been the key to growth. The Consumer Con- fidence Index tends to be a reason- able indicator of future consumer activity. The January-July average Consumer Confidence Index for the U.S. was 7.7 percent higher in 2018 compared with the same time last year. The average Mountain Region Index, which includes Colorado, was 1.4 percent higher. The high index levels reflect confident consumers who are spending at a steady pace. • Residential real estate. A chal- lenge for many of the 3.2 million people who live in the seven-county metro Denver area remains the cost of housing. The rapid increase in home prices combined with limited inventory of for-sale homes is mak- ing it difficult for some households to move into a homeownership position. As of sec- ond-quarter 2018, the Boulder metro- politan statistical area had the sixth- highest median home price of the 178 MSAs tracked by the National Association of Realtors. The Den- ver MSA ranked as the 13th most expensive mar- ket. While home price increases are moderating, the median home price in the Denver MSA is expected to reach $444,600 in 2018, a 7.2 percent increase over last year. In comparison, the nation- al median home price is expected to be $261,000, a 4.9 percent increase over 2017. Builders continue to add new housing units throughout the Den- ver metropolitan area. Following a 7.1 percent increase in single- family detached building permits issued in 2017, permits are up more than 18 percent through June compared with the same period in 2017. Metro Denver is expected to record approximately 12,850 single- family detached permits in 2018, a 12.6 percent increase and the highest number since 2006. On the other hand, the number of permit- ted multifamily units has declined sharply by 30.5 percent as of June, making 2018 the second consecu- tive year of decrease in permits. • Employment. Nearly 1.7 million jobs are located in metro Denver. Employment in metro Denver is expected to increase by 2.6 percent in 2018, representing the addition of 42,000 jobs. Through the end of 2018, the other services supersec- tor is expected to be the only one to shed jobs. Natural resources and construction; transportation, warehousing and utilities; and lei- sure and hospitality are expected to be the fastest-growing super- sectors. Professional and business services and leisure and hospitality are expected to be responsible for nearly 40 percent of the job growth in 2018. Looking ahead to 2019, the employment growth rate in metro Denver is likely to fall slightly to 2.1 percent, primarily due to the lack of labor. While companies continue to struggle to find more workers due to an unemployment rate averag- ing 2.8 percent in metro Denver in 2018, more employment opportuni- ties and rising wages have boosted Colorado’s labor force participation rate. In July, Colorado’s not season- ally adjusted LFPR reached its high- est level since 2011, rising to 69.9 percent. In comparison, the LFPR in Colorado had peaked at 72.9 per- cent prior to the Great Recession in 2007. If businesses were equally successful in attracting workers from the sidelines, an increase in the LFPR to 72.9 percent would rep- resent the addition of over 130,000 more workers throughout the state, which would provide the fuel for a higher employment growth rate. Please see Silverstein, Page 27 Patricia Silverstein President and chief economist, Development Research Partners Development Research Partners Metro Denver employment growth by supersector