Downtown Denver reaches $2.5 billion in developments 2016
More than $2.5 billion in developments are either planned or under construction according to the latest report from Downtown Denver Partnership. As of mid-2016, there were 18 projects under construction while another 14 projects were in the planning stage. The $2.5 billion developments include 1,230 additional hotel rooms, 4,592 new residential units and 2.7 million square feet of new office space. Over the past two years, 24 companies have relocated or expanded into downtown Denver, which has pushed up the average lease rate for office space in the downtown area to $33.80 per square foot (gross) while lowering the vacancy rate to 9.3%.
However, the first quarter 2016 saw a negative absorption -70,839 in the CBD and LoDo area, which was mainly attributed to the energy sector which is experiencing a contraction because of the energy prices. Second quarter 2016 also appears to be a negative quarter also, with a total of -203,231 square feet QTD for the CBD and LoDo area. A total of 288,807 square feet of office space was delivered in 2015. The number of people living in the downtown area has also increased from 73,000 last November 2015 to 76,000 year-to-date. Both city leaders and real estate developers are contemplating what would be the next big development driver will be in the downtown Denver area and the answer may be Arapahoe Square, Five Points between Lawrence and Tremont streets and from 20th Street to Park Avenue. These areas have been targeted for redevelopment by the city and is an area of focus by the Downtown Denver Partnership.