Denver’s Industrial and Office Markets Strong in Q2 Denver’s Industrial and Office Markets Strong in Q2
View here According to  CBRE’s latest market update, strong population and job growth is supporting Denver’s industrial and office markets in the second quarter... Denver’s Industrial and Office Markets Strong in Q2

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According to  CBRE’s latest market update, strong population and job growth is supporting Denver’s industrial and office markets in the second quarter of 2017. Industrial remains the strongest — tenants have absorbed more space than they have let go for an unprecedented 29th consecutive quarter — more distribution centers and warehouses are needed due to an increase in online shopping.

 
Office Q2 Highlights
  • Over 4.5 million sq. ft. (MSF) of office space is currently under construction in metro Denver, 4.1 million of which is speculative construction
    • Of the 4.1 MSF of spec construction, 46 percent is already pre-leased
    • Suburban projects accounted for 2.7 MSF of spec construction with 43.3 percent pre-leased
    • Downtown projects comprised 1.4 MSF of spec construction with 51 percent pre-leased
  • Sublease availability in the downtown market declined 12.1 percent year-over-year
  • Investment activity remained stable with $476.8 million transacting in Q2 averaging $252.22 per sq. ft. (PSF), a 48 percent increase over Q2 2016
Industrial Q2 Highlights
  • Metro Denver industrial market continued its positive net absorption streak in Q2, marking the 29th consecutive quarter of positive net absorption 
  • Large Class A space continued to be in high demand while demand for smaller buildings less than 20,000 SF slowed due to high lease rates
  • Overall average asking lease rates remained flat but are expected to climb as more Class A assets are delivered
  • Construction activity surged ahead with 5.3 MSF underway, 2.5 MSF of which is speculative 
    • 1.4 MSF of spec space delivered in Q2, of which 79.2 percent was pre-leased 
  • Total combined owner/user and investment sales reached $269.1 million in Q2, up 12.4 percent compared to Q2 2016
Retail Q2 Highlights
  • Overall Denver’s retail market performed well in Q2, surpassing many expectations in the face of store closures
  • Average lease rates increased 1.6 percent quarter-over-quarter to $18.17 PSF; while this is the highest lease rate since Q1 2009, it shows that lease rates are starting to level out
  • Construction activity remains active with 1.1 MSF underway, a 5.7 percent increase from last quarter 
  • Over 371,000 SF of new retail space delivered in Q2, nearly a threefold increase compared to last quarter 
  • Total transaction volume exceeded $158 million with 24 properties trading hands, representing a 15.7 percent quarter-over-quarter increase in sales volume and a 9.3 percent increase in the price PSF

 

Image courtesy of Wikimedia.

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