L ast year was a year to remember. Office transaction volume exceeded $3 billion, driven by 14 downtown sales totaling $1.35 billion; a sub- stantial increase from 2017 when only seven transactions occurred, totaling $580 million. In December, 1601 Wewatta traded for $742 per square foot and under a 5 percent going-in yield. This record-breaking sale is 72 percent higher than the high-water mark in the last cycle, when 1800 Larimer traded for $430 per sf at a 6 percent cap rate in 2011. Denver has matured during this cycle, becoming a first-tier investment market with an increasingly diversi- fied economy. Colorado continues to receive very posi- tive press from repu- table publications including: No. 10 best market for com- mercial real estate investment (ULI), No. 1 overall economy (USA Today), No. 1 in small-business employment (Paychex), No. 2 city for job seekers (Nerdwallet) and No. 3 best place to live (Business Insider). This level of positive press encourages capital to invest in Denver. When the U.S. reports a positive gross domestic product in Sep- tember, we will officially achieve the longest-recorded economic cycle ever. Investors are cautiously optimistic about acquisitions. Buy- ers are focused on assets that will outperform in their competitive set, and they are willing to pay a premium for cashflow security. The majority of the workforce, includ- ing millennials, prefer to be located downtown and, thus, investment activity is focused in the central business district. In 2018, the total number of transactions metrowide was down roughly 8 percent. The southeast suburban submarket experienced fewer than 15 trades. However, there was a significant increase in Please see Page 15 March 2019 INSIDE Office market drivers PAGE 6 Solar upgrades PAGE 14 Project spotlight PAGE 12 A deep dive into how proximity to transit is impacting office fundamentals around Denver. The end of the year will usher in reduced tax credits and other incentives for solar. How a coworking-designed space was transformed for a single-tenant occupant. Patrick Devereaux Executive vice president, capital markets, JLL Capital pursues Denver, driving record pricing Rocky Mountain Photography With much of the workforce preferring to be located downtown, investment activity in the central business district is thriving and saw record pricing in 2018. Regional Transportation District