Recently, some top realtors from Cassidy Turley discussed how they see the current trends and their future expectations for the Denver commercial real estate market.  In their unanimous view, Denver appears to be on the fast track to significant recovery for the rest of 2013, which should further accelerate into 2014.

According to Cassidy Turley’s Senior Vice President, Mike Kboudi, a land specialist, Denver’s real estate land market is seeing a dramatic rise in interest in finding land for new housing construction.  Building permits are up to 7,500 and new residential builders are flocking to the area. Overall increases in speculative industrial construction, new office development, and downtown multi-family buildings indicate that the land market for the Denver metro area is no longer distressed.  This is a significant change from the past few years and one that land owners will welcome with enthusiasm.

Vice President Jason Ells, who specializes in northern Colorado stated that he anticipates a significant  increase in future construction (including multi-family, commercial and industrial projects) which is estimated to total more than  $1.5 billion in the next two years. In addition, there were 6,600 new jobs created in northern Colorado area last year, dropping regional unemployment levels down to 5 percent, and another 3,000 to 4,000 jobs are projected to be added this year. Ells forecasts that these rising employment rates combined with the increase in new construction projects indicate the return of the landlord/seller market in northern Colorado.

An analysis of the Denver retail market by Senior Vice President David Fried reveals that dining and entertainment are now the major drivers of the local retail sector. This is supported by the prediction made by Chainlinks Retail Advisors that “40 percent of new tenancy in 2013 will be attributable to food users.” Online e-tail sites are the biggest threat to this continued growth in the bricks and mortar retail sector because of their convenience and ability for shoppers to access and shop any time, any where.

The Denver industrial market is particularly strong at the moment according to Senior Vice President Alec Rhodes. This is due to many factors, including historically low vacancy rates, increases in lease rates and sale prices, and a decrease in distressed assets. The market is largely driven by companies dealing in four industries: food and beverage, manufacturing, technology, and construction and building supply. Rhodes predicts that the industrial market and build-to-suit activity will remain steady with increasing lease rates and a decrease in landlord concessions as well as a continued rise in investment activity and demand.

Senior Vice President Doug Wulf stated that Denver’s office market has shown strong white collar growth with over 25,000 new office jobs created in the past three years. He also says that the growth of Colorado-based companies equals that of out-of-state companies. In Denver, tenant growth among existing oil and gas companies is slowing while increases are being seen in companies specializing in healthcare, technology, finance, engineering and back room services (such as accounting, data storage, payroll, etc.). Wulf predicts that while growth may slow slightly he anticipates continued upward trends in office rents.

On the whole, the forecasts from the Cassidy Turley executives are optimistic and predict a steady recovery for Denver’s real estate market, both residential and commercial.

The main take away from their forecast is how well the Denver metro area is doing compared with the rest of the country. Indeed, as we suspected, Denver is a good place to be for the next few years. Find out more about our Denver hard money loans.

This blog was written by Bob Amter, President of Montegra Capital Resources, LTD., a Colorado hard money lender.  [google_authorship] has been in the private capital lending business for 41 consecutive years.

Source:

Cassidy Turley 2013 Commercial Real Estate Forecast