DENVER – CBRE Research has released reports on metro Denver’s office, retail and industrial sectors for Q4 2017 / year-end 2017. The Denver office market ended strong in the final quarter of the year, with occupancy of newly delivered Class A space as the driving force for positive net absorption of 254,358 sq. ft. Population and economic dynamics propped up retail demand in 2017 and the industrial sector continued its positive net absorption streak for the 31st consecutive quarter.
- Q4 demonstrated a balance of supply and demand for the end of the year.
- Of the 4.5 million SF of office space under construction, 51.6 percent is already pre-leased.
- Direct asking lease rates increased to a record high of $26.54 per SF.
- Total office investment sales volume received a huge bump in Q4. The $810 million transacting in the last quarter brought year-end totals to $2 billion, a 7.1 percent increase over last year.
- New construction/development was also a key theme in Denver’s retail market, which had 1.6 million SF underway as of the end of the year—the highest amount since 2009.
- Q4 saw 375,509 SF of positive net absorption, driven by fitness, entertainment and discount retailers.
- While lease rates were down quarter over quarter, they were up 4.4 percent year-over-year.
- Once again, new construction is a big story. 2017 saw 5.4 million SF delivered in metro Denver’s industrial market, the highest level since 2001 when 5.5 million SF of new industrial space was completed.
- 4.0 million SF of new industrial projects remain under construction at year-end.
- Most of the new construction is taking place in the Airport and North submarkets, primarily along I-25 and I-76.
- The industrial market recorded its 31st-consecutive quarter of positive net absorption in Q4 (almost half a million SF). Year-end net absorption hit 3.6 million SF.
Charts courtesy of CBRE Research, Q4 2107