CREJ - Office Properties Quarterly - April 2015
As we wrapped up this issue, several reports came out about the office market. One area in particular stands out, and that’s the employment numbers in Colorado. Employers in Denver are forecasted to add 43,000 workers during 2015, and office using payrolls will increase by 14,000 jobs, according to the Marcus and Millichap 2015 National Office Report. Denver is ranked the sixth-healthiest employment market in the country, according to the report. The Denver area currently has 3.6 percent unemployment, according to CBRE’s Denver 2015 Market Outlook. Make sure to read Patricia Silverstein’s article on Page 16 to learn more about the employment pool and its effect on the office market. With these numbers, one thing is consistently mentioned – the Denver office market is not reliant on the oil and gas industry. While the energy industry and its peripheral businesses are a large presence in Denver, there is a well-balanced blend of industries. In addition, we have a great generational blend. Millennials continue to pick Denver as the top location they’d like to live, and employers are taking note. “Denver continues to attract businesses due to its highly educated workforce,” said the CBRE outlook. “In 2013, 42.1 percent of the Denver region’s workforce had obtained at least a bachelor’s degree, compared to the national average of 29.6 percent. Further, Colorado is the second most educated state in the nation.” These positive trends undoubtedly are affecting the office market. At the end of 2014, the average asking lease rate was $23.15, the office market vacancy rate was 12.5 percent and there was 2 million square feet of office property under construction, according to the CBRE outlook. In response to this influx, there are 2.2 million sf of office space that will be brought on line this year, mainly downtown and in the Denver Tech Center, according to the Marcus and Millichap report. However, developers are cautious not to overbuild the market, which Tom Lee discusses on Page 9. I want to thank all the authors who took the time and energy to research and write for this issue. Please reach out to me if you have any thoughts on the issue, are interested in contributing or would like to make sure we cover something important in an upcoming issue. I look forward to hearing from you, and thanks for reading. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104