CREW Denver Holds Mid-Year Economic Forecast

Patty Silverstein

On July 14 CREW Denver held its Mid-Year Economic Forecast and happy hour at the University of Denver Knoebel Events Center. Patty Silverstein, president and chief economist of Developmental Research Partners, gave her economic forecast for 2021 which included trends in the commercial real estate and construction industry. Silverstein shared a presentation about tracking the great divide and how the U.S. has experienced what some economists have called a “K-shaped recovery,” a term that illustrates how different parts of the economy have recovered at different rates, times, or magnitudes.


Source: U.S. Bureau of Economic Analysis

The Global Situation

  • COVID-19 infected 187 million people across globe, resulting in 4 million deaths (7/13/2021
  • Federal budget deficit increased from $1T in 2019 to $3.1T in 2020. Expect $3T in 2021.
  • 2021 Total Debt held by public = $23T (103% of GDP)
  • The Federal Reserve has maintained the federal funds rate to a range of 0 to 0.25 percent
  • Drop in GDP in 2020 was steep, but not as bad as declines in 1930s and 1940s

Labor & Employment 

  • Labor force nearly recovered and unemployment moderates by mid-2021.
  • While people are getting back into the workforce, there is still a lack of job security. It will take time to see how this plays out.
  • All states lost jobs but they have all increased YOY. Colorado is currently ranked #30 when it was ranked #5 pre-covid due in part to the hard hit on the hospitality and leisure industry.
  • 5% of jobs in Colorado are recovered with Colorado Springs leading job growth and Greeley being the hardest hit. Boulder is also lagging in job growth.
  • Natural Resources & Mining offered the highest weekly wage in Metro Denver in 2020 while leisure and hospitality offered the lowest.
  • Even the high wage industries lost jobs.
  • Metro Denver is expected to add about 50k jobs by the end of the year.

Colorado Commercial Real Estate

Denver Office Market shifts due to remote work. Source: CoStar Group Inc.


  • 2Q 2021 Total Space= 199.5 MSF
  • Vacancy Rate = 12.3%
  • Lease Rate = $29.29/sq. ft.
  • YOY Change Lease = +3%
  • Under Construction = 1.75 MSF
  • Completions = 1.47 MSF
  • Silverstein expects to see office vacancy rates go back down due to the return of social collaboration in the office.


  • 2Q 2021 Total Space=
  • 237.5 MSF
  • Vacancy Rate = 6.4%
  • Lease Rate = $8.84 NNN
  • YOY Change Lease = +1.3%
  • Under Construction = 6.26 MSF
  • Completions = 3.27 MSF


  • 2Q 2021 Total Space=
  • 176.2 MSF
  • Vacancy Rate = 5.1%
  • Lease Rate = $18.91 NNN
  • YOY Change Lease = +3.3%
  • Under Construction = 1.12 MSF
  • Completions = 0.26 MSF
Metro Denver Building Permits. Source: U.S. Census Bureau, Building Permits.

Consumer Activity

  • Millennials are Colorado’s largest generation at 1.36M, own 8% of assets, owe 27% of liabilities, $6.0T Net Worth.
  • Boomers own 50% of assets, owe 30% of liabilities, $61.9T Net Worth.
  • National Consumer spending patterns shifted dramatically due to COVID
  • High touch industries experiencing steep declines in consumer spending.
  • Non-store retailers, gardening, food & beverage stores saw increases in consumer activity in 2020.
  • Denver metro area showed a “good distribution of spending.”
  • Apartments experienced approximately 3% increase in rentals
  • 2020 saw a 1.5% increase in building permits and a large uptick is expected in 2021 (up to 25%).

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