CREJ - Office Properties Quarterly - December 2016
Colorado’s employment is expected to grow by 2.4 percent in 2017, adding a variety of jobs in almost every sector, according to the Colorado Business Economic Outlook Forum, put together by the University of Colorado Boulder’s Leeds School of Business research division. The forecast calls for a gain of 63,400 jobs in Colorado in 2017. All but the state’s natural resources and mining industry are predicted to see gains. Leading this growth is construction. The industry is expected to see 5.7 percent growth. Employment for residential, nonresidential 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 industry 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 overcompensate 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, activity remains busy in the downtown area, but it is not limited to the core. Interestingly, metro Denver’s suburban office construction activity is outpacing the development occurring downtown, CBRE’s Hilary Barnett points out in her article on Page 4. Other industries anticipated to enjoy three percent or higher employment growth include leisure and hospitality, 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 Richard Wobbekind with the CU Boulder’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 exceptional quality of life.” While all of this bodes well for the commercial office properties market – a diverse employment base helps create resiliency in our marketplace – it is important to acknowledge that more must be done to maintain these successes. Kelly Brough with Denver Metro Chamber of Commerce authors an article on Page 8 that 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 reconciled – 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 Colorado paradox will be critical in maintaining this reputation in the future, he writes on Page 18. Michelle Z. Askeland maskeland@crej.com