Good news for the Denver’s Commercial Real Estate market as the Q2 showed positive numbers. All three CRE submarkets showed positive results in the three segments.
- Denver’s Office Market:
The Denver office market continued to improve. For the previous 5 quarters more office space has been leased than has been vacated. Presently the Denver office market vacancy is at 14.8% for the second quarter and all indicators appear to indicate that the market is heading in a positive direction. Downtown and northwest area are some of the most expensive submarkets in the metro Denver area with average asking rate for downtown at $26.05 and northwest at $21.77 per square foot. The average asking lease rate is $20 per square foot for the overall market and 606,000 square feet more office space was leased than vacated.
- Denver’s Retail Market:
Denver’s retail market also continues to improve and presents growing signs for optimism. The retail sector in the Denver market continues to expand and all indicators point to a very positive outlook. For example, in the second quarter, Wal-Mart Stores, Inc. opened four new stores, creating approximately 400 jobs. Generally, many national tenants appear to be receptive to expanding in the Denver market. The underlying fundamentals of the Denver retail market are quite solid. Overall indicators, including total vacancy, lease rates and net rate absorption have fared well over the past year. Higher retail lease rates include the midtown submarket, including Cherry Creek at $27.22 per sq. foot and the Colorado Blvd. Corridor. The southeast submarket averages $18.90 but has an extremely low vacancy rate of 1.6%.
- Denver’s Industrial Market:
Industrial lease rates, while not increasing dramatically, are gradually improving in the Denver market. Tenant demand is currently at a three-year high for industrial space. Lease rates are rising and there are a number of build-to-suit projects online. Lease rates for industrial space increased $21 per sq. foot in the first quarter. The increasing build-to-suit market indicates a healthy industrial market and there are currently 841,000 industrial build-to-suit projects in the pipeline. Market wide, the Aurora submarket had the highest vacancy rate at 10.9%, while the central submarket posted the highest lease rate at $8.15 per sq. foot and also had one of the metro areas lowest vacancy rates at 2.7%.