denver office market...
TRANSCRIPT
Denver Office Market ActivityBy Lauren Douglas Director of Research
As the second quarter of 2010 comes to a close, it is clear that the worst is behind us both in terms of the local economy and the demand shock that created a significant downturn in the Denver office market. The fundamentals of the office market have shown steady, albeit slow, improvement particularly in the core Central Business District (CBD) and Southeast Suburban (SES) submarkets. In 2Q10, the overall market posted positive absorption, decreased vacancy, increased leasing activity and stable rental rates. 2Q10 absorption was 498,432 square feet, which brings year-to-date absorption to 708,485 square feet. Overall vacancy decreased slightly from 20.00 percent at 4Q09 to 19.74 percent.
The CBD ended the quarter with solid absorption of 184,480 square feet, bringing year-to-date absorption to 277,054 square feet and is poised for greater expansion in the latter half of the year as Xcel completes its move into 1800 Larimer and numerous GSA tenants move into short-term leases while the Byron G. Rogers Federal Courthouse undergoes extensive renovations. Vacancy stands at 19.07 percent.
The SES submarket also expanded this quarter, posting absorption of 146,228 square feet, which was due mainly to this quarter’s large move-ins by Catholic Health Initiatives and Baxa Corporation. Vacancy is 20.06 percent, which is down from 20.21 percent at 2Q09.
Throughout 2009, median asking rates decreased. However, most submarkets posted little or no change from 4Q09 to 2Q10, indicating that rental rates are stabilizing.
As a result of the frozen capital market and subsequent limited inventory, Denver’s investment sales market stopped short in 2009, remained sluggish in 1Q10 and improved slightly in 2Q10. Year-to-date sales total 1,483,503 square feet with a total volume of $192,622,301.
The development pipeline has diminished to just under 350,000 square feet under construction and two projects, 1800 Larimer in the CBD and the new FBI Headquarters in the Northeast submarket, were delivered this quarter. The only major project under construction is Central Park Tower in the Northwest submarket.
Ross Research believes that in 2Q10, the trends of positive absorption, increased leasing activity and signs of an improving labor market signal that the market is on the path to recovery.
Requirements for Sustained Industrial Market Growth
Jeff McClintock and Matt McClintock
From tax write-offs to home-buyer housing incentives, we’ve seen a lot of effort to improve our economy over the past few months. Some of it has helped the industrial market; some hasn’t affected it at all. There’s no doubt, however, that for sustained
improvement in the industrial sector, two things need to happen: 1) increase in consumer spending, and 2) increase in home building.
Consumer spending, which relates directly to creation of jobs and consumer confidence, accounts for over 70 percent of the U.S. Gross Domestic Product (GDP). Tight credit, flat wages and a 9.5 percent unemployment rate continue to keep the lid on consumption. Government stimulus in the form of temporary tax reductions, tax credits for first time home-buyers, incentives for buying energy-efficient products and cash-for-clunker programs all
attribute to upward blips in consumption, but long-term sustained consumption growth requires job growth. Get unemployment down to 7 percent or less and consumer confidence and spending are sure to pick up dramatically.
Home building accounts for about 15 percent of the GDP. In the industrial market, however, the percentage of warehouses used for distribution of products for the home building business is even greater. Again, with an improving job market, new home sales and home construction will increase significantly.
Denver is nicely positioned to take immediate advantage of an improving job market, ultimately sustaining the industrial market growth that is already underway. The Federal Reserve stated that industrial production rose 1.2 percent in May; and factories, the single biggest contributor to industrial activity, stepped up production 0.9 percent — the third straight monthly increase. Whether this growth continues remains to be seen, but the groundwork is in place, with all signs pointing up.
-4,000,000
-2,000,000
0
2,000,000
4,000,000
5.00%
10.00%
15.00%
20.00%
25.00%
20012002
20032004
20052006
20072008
2009
Supply Absorption Vacancy
2Q10
Vaca
ncy
Source: Ross Research Services
Squa
re F
eet
Office Market Balance
Jeff McClintock
Matt McClintock
IEWVC o M M e R C I A L R e A L e S TAT e q U A R T e R L y
Volume 15
Number 3
july 2010
Frederick Ross company
market perspective
IEWV �
commer cial real estate
Frederick Ross company
IEWVIn this issueOffice market activity ............................ 1
real estate transactions ..................... 3
real estate Opportunities .................... 4
apartment market activity..................... 6
people .................................................. 7
industrial market activity....................... 8
retail market activity ............................ 8
the vieW is the region’s most comprehensive commercial real estate newsletter for over a decade.
OtheR ROSS puBlIcAtIOnS:
the ross Hot sheet highlights significant current leasing opportunities.
the ross transactions in review highlights recent ross transactions.
ross publishes quarterly market reports for office, industrial and retail markets in Denver and Boulder.
contact the editor to subscribe to ross publications.
© 2010 Frederick ross companyall rights reserved
Frederick ross company 1800 Larimer street, suite 1700
Denver, colorado 80202
phone 303.892.1111 • fax 303.892.6338 email [email protected]
www.frederickross.com
editor rachel chin email [email protected]
Commercial real estate transactions are complicated. This is the time for more, not less. You need the power and the pull of the full-service leader. Frederick Ross Company.
There are times when more is simply better.
Brokerage • management
research • marketing
Financial analysis • consulting
Development/capital
THE ROSS HOT SHEETHot Sheet listings represent select Ross opportunities. Contact us for complete sale and lease listings.
W E E K O FNOVEMBER 17, 2008
PLUG-AND-PLAY SUBLEASE5970 Greenwood Plaza Boulevard, Greenwood Village8,000 - 18,475 RSF available immediatelySublease rate: $13.00/SFPhones, cabling and furnitureFlexible space confi gurationsBoard room for 12 people, training room for 20 people and large
eat-in kitchenElevator identitySublease term through March 31, 2011Common conference room in building
Contact Andrew Blaustein or Jamie GardQWEST BUILDING: 38TH FLOOR SUITE1801 California Street, Suite 3840, Denver, CO
2,011 SF available nowSublease rate: $24.00/SF full serviceSublease available now on 38th fl oorFurniture available1 large conference room6 offi ces including one large executive spaceKitchenetteContact Jane Rubley Grubich or Jon Tilton GRANITE TOWER: 20TH FLOOR SUITE1099 18th Street, Suite 2010, Denver5,822-RSF suite availableHigh-end fi nishes and furniture
in placeIncredible western viewsFirst class building upgrades and
renovations completedNEW Dazbog Coffee now open on-siteConvenient CBD locationNearby amenities include The Ritz-Carlton Denver, FORZA Fitness and Performance Club and Elway’sCompetitive lease rateContact Nathan Johnson, Pete Staab or Jamie Gard
•••
•
•
•••
••
•
•••
•
••
••
•
••
•
HISTORIC OFFICE SPACE ABOVE JET1612 Wazee Street, Denver 2,685-4,045 SF suites and 150-300 SF executive suitesLease rate: $25.00/SF full serviceFun, creative atmosphere in the heart of LoDoHistoric space with lots of nearby amenitiesOn 16th Street Mall near Union Station
Contact Darrin Revious or Colleen Minde
SUMMIT SQUARE SHOPPING CENTER8410-8472 Federal Blvd., Westminster
1,200-1,473 SF availableInline lease rate: $15.00-17.00/SF NNNJoin Safeway, Wells Fargo, Baskin Robbins, Taco Bell, Blackjack Pizza and othersSignaled intersection with excellent visibility just north of Highway 36 and 2 miles west of I-25Free-standing pad building available 2009
Contact Tom Mullinix or Bob Bramble
2.045 ACRES AVAILABLE FOR SALENWC Atchinson Way and East Quincy Avenue, AuroraSale price: $800,000($8.98/SF)Great traffi c countsIdeal for offi ce, bank, restaurant,daycare or multi-family
ContactPete Wycoff
•
•
•••
••
•
•
•
•
•
•
RETAIL
OFFICE
LAND
EAST BANK SHOPPING CENTER
e QUIncY AVe
S PA
rker
rd
S At
cHIn
Son
WAY
SIte
OFFICE
SUBLEASE
SUBLEASE
ENTITLED AND READY FOR DEVELOPMENT
VISIT www.frederickross.com or CALL 303.892.1111Information contained herein, while not guaranteed, is from sources we believe reliable.
ONCOR INTERNATIONAL
THE ROSS HOT SHEETHot Sheet listings represent select Ross opportunities. Contact us for complete sale and lease listings.
W E E K O FNOVEMBER 17, 2008
PLUG-AND-PLAY SUBLEASE5970 Greenwood Plaza Boulevard, Greenwood Village
8,000 - 18,475 RSF available immediatelySublease rate: $13.00/SFPhones, cabling and furnitureFlexible space confi gurationsBoard room for 12 people, training room for 20 people and large eat-in kitchenElevator identitySublease term through March 31, 2011Common conference room in building
Contact Andrew Blaustein or Jamie Gard
QWEST BUILDING: 38TH FLOOR SUITE1801 California Street, Suite 3840, Denver, CO
2,011 SF available nowSublease rate: $24.00/SF full serviceSublease available now on 38th fl oorFurniture available1 large conference room6 offi ces including one large executive spaceKitchenette
Contact Jane Rubley Grubich or Jon Tilton
GRANITE TOWER: 20TH FLOOR SUITE1099 18th Street, Suite 2010, Denver
5,822-RSF suite availableHigh-end fi nishes and furniture in placeIncredible western viewsFirst class building upgrades and renovations completedNEW Dazbog Coffee now open on-siteConvenient CBD locationNearby amenities include The Ritz-Carlton Denver, FORZA Fitness and Performance Club and Elway’sCompetitive lease rate
Contact Nathan Johnson, Pete Staab or Jamie Gard
•••
•
•
•••
••
•
•••
•
••
••
•
••
•
HISTORIC OFFICE SPACE ABOVE JET1612 Wazee Street, Denver
2,685-4,045 SF suites and 150-300 SF executive suitesLease rate: $25.00/SF full serviceFun, creative atmosphere in the heart of LoDoHistoric space with lots of nearby amenitiesOn 16th Street Mall near Union Station
Contact Darrin Revious or Colleen Minde
SUMMIT SQUARE SHOPPING CENTER8410-8472 Federal Blvd., Westminster
1,200-1,473 SF availableInline lease rate: $15.00-17.00/SF NNNJoin Safeway, Wells Fargo, Baskin Robbins, Taco Bell, Blackjack Pizza and othersSignaled intersection with excellent visibility just north of Highway 36 and 2 miles west of I-25Free-standing pad building available 2009
Contact Tom Mullinix or Bob Bramble
2.045 ACRES AVAILABLE FOR SALENWC Atchinson Way and East Quincy Avenue, Aurora
Sale price: $800,000($8.98/SF)Great traffi c countsIdeal for offi ce, bank, restaurant,daycare or multi-family
ContactPete Wycoff
•
•
•••
••
•
•
•
•
•
•
RETAIL
OFFICE
LAND
EAST BANK SHOPPING
CENTER
e QUIncY AVe
S PA
rker
rd
S At
cHIn
Son
WAY
SIte
OFFICE
SUBLEASE
SUBLEASE
ENTITLED AND READY FOR
DEVELOPMENT
VISIT www.frederickross.com or CALL 303.892.1111Information contained herein, while not guaranteed, is from sources we believe reliable. ONCOR INTERNATIONAL
Transactions ReviewAUG-SEPT 2009
STEEL COMPANY PURCHASES AURORA FACILITY FOR NEW PLANTOmaha-based steel company, Drake-Williams Steel, Inc. (DW Steel) purchased a 52,000-square-foot facility last month with plans to open its first ever Colorado manufacturing plant. The
industrial property, situated at 20400 East 26th Avenue in Aurora, has 12 acres of fenced yard and sold for $3 million. Ross represented DW Steel in this
industrial transaction.Ross representatives: Tyler Reed, Chris Nordling, Pete Wycoff
OSWEGO CREATIVE TO OPEN NEW OFFICE IN GOLDENOswego Creative, a full-service advertising and marketing agency, recently purchased 1000 10th Street in Golden with plans to occupy next year. Shallow Bay Properties, LLC sold this 5,967-square-foot office building for $825,000.
Ross represented the buyer in the office transaction.
Ross representatives: Roger Simpson, Jared Leabch
SUNNY MTN STORAGE BUYS DENVER WAREHOUSE FOR $2.15 MILLIONSunny Mountain Storage LLC of Denver
recently purchased the warehouse at 3770 E. 40th Ave. in Denver. The 90,000-square-foot building sold for $2.15 million.
Ross represented the buyer in this industrial transaction.Ross representative: Peter Beugg
POLICY STUDIES SIGNS NEW LEASE AT HINES BUILDING, NOW 85% LEASEDPolicy Studies Inc., a leader in administrative case management services for government-funded health and human services organizations, recently leased 75,474 square feet of office space in Denver’s newest Hines development at 1515 Wynkoop Street. The company
plans to move into its new office first quarter 2010.Ross is the exclusive marketing and leasing representative for 1515 Wynkoop Street, an 8-story premier office tower in LoDo. Ross representatives: Jamie Gard,
Nathan Johnson
MULTIPLE TRANSACTIONS FOR BANK OF THE WESTSeven transactions have occurred at multiple Bank of the West locations in Colorado and Wyoming. Medical leases:Two new leases at 1300 Jackson Street in Golden
Office renewals: Western Funding, Inc. at 7995 E. Hampden AvenueCBL & Associates Management, Inc
at 12000 North Washington Street in ThorntonThe Colorado Center for Addiction Recovery & Research at 7120 E. County Line Road in Highlands Ranch1130 Sheridan Avenue in Cody, WY Renewal and expansion:300 South Wolcott in Casper, WYRoss represented Bank of the West in all of
these office transactions. Ross representatives: Roger Simpson, Jared Leabch
•
•
•
•
•
•
MANVILLE PLAZA ACTIVITYTwo recent renewals occurred at 717 17th Street in downtown Denver. NICE, a leading multi-media company renewed its lease for 30,775 square feet; and CoBiz Financial, Inc. renewed its office lease for 23,773 square feet.
Frederick Ross Company is the exclusive marketing and leasing agent for Manville Plaza. Scott Garel, also of Frederick Ross Company, represented CoBiz in this transaction.Ross representatives: Jeff Castleton,
Jamie Gard, Scott GarelROTATING ENERGY SERVICES LEASES COMMERCE CITY SPACEDenver-based Rotating Energy Services
recently leased 11,400 square feet of industrial space in Commerce City. The energy company has already occupied its new space at 5303 Vasquez Boulevard.Ross represented the tenant in this
industrial transaction.Ross representative: Pete Wycoff
PARTECH RENEWS AT FLATIRON PARK WESTParTech, Inc., the industry leader in systemsand service solutions for the hospitality industry, recently renewed its 20,480-
square-foot office lease at Flatiron Park, 2425-2555 55th Street in Boulder.Ross and Dean Callan & Company
represented the landlord in this transaction.
Ross representatives: Joe Heath, Scott Garel, Don Misner
SALES LEASES
VISIT www.frederickross.com or CALL 303.892.1111Information contained herein, while not guaranteed, is from sources we believe reliable.
ONCOR INTERNATIONAL
inTransactions in Review listings represent select Ross transactions. Contact us for complete sale and lease listings.
Transactions ReviewAUG-SEPT 2009
STEEL COMPANY PURCHASES AURORA FACILITY FOR NEW PLANTOmaha-based steel company, Drake-Williams Steel, Inc. (DW Steel) purchased a 52,000-square-foot facility last month with plans to open its first ever Colorado manufacturing plant. The industrial property, situated at 20400 East 26th Avenue in Aurora, has 12 acres of fenced yard and sold for $3 million.
Ross represented DW Steel in this industrial transaction.
Ross representatives: Tyler Reed, Chris Nordling, Pete Wycoff
OSWEGO CREATIVE TO OPEN NEW OFFICE IN GOLDENOswego Creative, a full-service advertising and marketing agency, recently purchased 1000 10th Street in Golden with plans to occupy next year. Shallow Bay Properties, LLC sold this 5,967-square-foot office building for $825,000.
Ross represented the buyer in the office transaction.
Ross representatives: Roger Simpson, Jared Leabch
SUNNY MTN STORAGE BUYS DENVER WAREHOUSE FOR $2.15 MILLIONSunny Mountain Storage LLC of Denver recently purchased the warehouse at 3770 E. 40th Ave. in Denver. The 90,000-square-foot building sold for $2.15 million.
Ross represented the buyer in this industrial transaction.
Ross representative: Peter Beugg
POLICY STUDIES SIGNS NEW LEASE AT HINES BUILDING, NOW 85% LEASEDPolicy Studies Inc., a leader in administrative case management services for government-funded health and human services organizations, recently leased 75,474 square feet of office space in Denver’s newest Hines development at 1515 Wynkoop Street. The company plans to move into its new office first quarter 2010.
Ross is the exclusive marketing and leasing representative for 1515 Wynkoop Street, an 8-story premier office tower in LoDo.
Ross representatives: Jamie Gard, Nathan Johnson
MULTIPLE TRANSACTIONS FOR BANK OF THE WESTSeven transactions have occurred at multiple Bank of the West locations in Colorado and Wyoming.
Medical leases:Two new leases at 1300 Jackson Street in Golden
Office renewals: Western Funding, Inc. at 7995 E. Hampden AvenueCBL & Associates Management, Inc at 12000 North Washington Street in ThorntonThe Colorado Center for Addiction Recovery & Research at 7120 E. County Line Road in Highlands Ranch1130 Sheridan Avenue in Cody, WY
Renewal and expansion:300 South Wolcott in Casper, WY
Ross represented Bank of the West in all of these office transactions.
Ross representatives: Roger Simpson, Jared Leabch
•
•
•
•
•
•
MANVILLE PLAZA ACTIVITYTwo recent renewals occurred at 717 17th Street in downtown Denver. NICE, a leading multi-media company renewed its lease for 30,775 square feet; and CoBiz Financial, Inc. renewed its office lease for 23,773 square feet.
Frederick Ross Company is the exclusive marketing and leasing agent for Manville Plaza. Scott Garel, also of Frederick Ross Company, represented CoBiz in this transaction.
Ross representatives: Jeff Castleton, Jamie Gard, Scott Garel
ROTATING ENERGY SERVICES LEASES COMMERCE CITY SPACEDenver-based Rotating Energy Services recently leased 11,400 square feet of industrial space in Commerce City. The energy company has already occupied its new space at 5303 Vasquez Boulevard.
Ross represented the tenant in this industrial transaction.
Ross representative: Pete Wycoff
PARTECH RENEWS AT FLATIRON PARK WESTParTech, Inc., the industry leader in systemsand service solutions for the hospitality industry, recently renewed its 20,480-square-foot office lease at Flatiron Park, 2425-2555 55th Street in Boulder.
Ross and Dean Callan & Company represented the landlord in this transaction.
Ross representatives: Joe Heath, Scott Garel, Don Misner
SALES LEASES
VISIT www.frederickross.com or CALL 303.892.1111Information contained herein, while not guaranteed, is from sources we believe reliable. ONCOR INTERNATIONAL
inTransactions in Review listings represent select Ross transactions. Contact us for complete sale and lease listings.
OFF
ICE
MA
RKET
REP
ORT
First Quarter 2009
OFF
ICE
MA
RKET
REP
ORT
First Quarter 2009
IEWV �
Transactions
united launch Alliance relocates and expands headquarters with transactions totaling more
than 440,000 square feet
Southpark Office campus building sells for $875,000A Denver investment group recently purchased the office building at 8151 Southpark Lane in Littleton from Compass Bank. This 10,298-square-foot medical office building, located in the Southpark Office Campus sold for $875,000.
Newly constructed, this single-story, stand-alone office/medical building in Southpark office campus provides multiple features that attracted the buyer, including a “Core and Shell” build-out, which allowed the buyer to finish space to individual specifications. Located on a high visibility corner location at the intersection of Southpark Lane and West Canal Court, this property provides excellent exposure to tenants.
Steve Roesinger and Wade Fletcher of Frederick Ross Company represented the seller in this transaction. Contact them for more information.
Rivet Software moves headquarters to DenverRivet Software, Inc., the premier provider of standards-based business reporting and analytics for financial communications, recently relocated its headquarters. The dynamic and fast-growing software company now occupies 31,819 square feet in the office building at 4340 South Monaco Street in Denver.
Rivet is the leading XBRL compliance and financial reporting provider in the world, serving more Fortune 500 companies in meeting their SeC filing needs than any other company. Tom Lee, Dann Burke and Jon Tilton of Frederick Ross Company are pleased to have represented Rivet in this transaction. Contact them for additional information.
World-renown space rocket company United Launch Alliance, LLC recently leased over 440,000 square feet of office space for its new Centennial-based headquarters. These transactions effectively relocate and combine the current ULA offices scattered across the Denver Metro area, consolidating them into just one neighborhood. Multiple leases include 144,202 square feet at 9501 East Panorama Circle; 106,213 square feet at 7630 South Chester Street; 34,401 square feet at 7670 South Chester Street; and 167,917 square feet at 7958 South Chester Street.
Centennial- based United Launch Alliance is scheduled to phase its workforce into the new Centennial offices by the end of 2011. Nathan Johnson, Pete Staab, Tom Lee and Jeff Castleton of Frederick Ross Company negotiated the above listed transactions on behalf of the landlords. Contact them for more information.
9501 East Panorama Circle
7630 South Chester Street
7670 South Chester Street
7958 South Chester Street
IEWV �
Rare opportunity to purchase commercial property in StapletonProfessional office/retail space is now available for sale in one of Stapleton’s most recognized office buildings. Located at 2373 Central Park Boulevard in Denver, this property offers multiple office/retail condo units for sale, with high-density residential surrounding the site. Boasting great architectural style and strong identity, the property is conveniently located just 10 minutes from downtown and 20 minutes from Denver International Airport.
Stapleton is the nation’s largest urban redevelopment. Contact Pete Wycoff, Pete Staab or Austin Kane of Frederick Ross Company for additional information on this Stapleton property.
a n n O u n c e m e n t s . . . r e c e n t a n n O u n c e m e n t s . . . r e c e n t a n n O u n c e m e n t s . . . r e c e n t a n n O u n c e m e n t s . . . r e c e n t a n n O u n
2nd Quarter 2010 Market Reports now Available!
“Boulder market posted month over month declines in unemployment during every month in 2010.”
BOulDeR
“Denver retail sales in March, mark the fourth consecutive month of year-on-year growth.”
RetAIl
“The East submarket was the strongest performing metro Denver submarket.”
InDuStRIAl
“Midtown continues to boast the market’s lowest vacancy rate, at 11.80 percent.”
OffIce
to obtain your copy:Contact your Ross broker, Visit us on-line at www.frederickross.com, orContact Lauren Douglas, Director of Research, at [email protected] or 303.260.4364.
•••
a n n O u n c e m e n t s . . . r e c e n t a n n O u n c e m e n t s . . . r e c e n t a n n O u n c e m e n t s . . . r e c e n t a n n O u n c
We’ve MOveD!Frederick Ross Company recently moved to 1800 LARIMER: the first new downtown Denver office highrise in over 25 years, and the first LEED Platinum highrise in downtown Denver.
Please note our new company office address:
Frederick Ross Company 1800 Larimer Street, Suite 1700 Denver, CO 80202
opportunities
IEWV �
completely redeveloped office space in the highlands District Renovations are complete and all-new office space is now available for lease at 2901 West 19th Avenue in Denver. Designed by cutting edge Denver architects Bothwell Davis George, this 13,000-square-foot, two-story office building is located near Mile High Stadium, with amazing Denver skyline views. The property offers great access to Interstate 25, Highlands, LoDo and the Central Business District, along with an excellent parking ratio and building signage.
Multiple suite options exist at this newly-renovated property. Contact Frederick Ross Company’s Keith Krombach for more details.
prime cherry creek north location in Denver’s premier retail districtProminently located in the center of the exclusive 16-block Cherry Creek neighborhood, 210 St. Paul Street in Denver now offers 9,790 square feet of 1st floor retail or office space available for lease. This Class AA, first-floor space showcases store fronts on both 2nd Avenue and St. Paul Street, providing ultimate traffic and pedestrian exposure. Situated just one block north of Cherry Creek Mall, the property offers 26 dedicated on-site covered parking spaces and excellent demographics.
Join Neiman Marcus, Macy’s, Saks Fifth Avenue, Nordstrom, and other great national and regional tenants in the area! Contact Susan Karsh, Frank Griffin, Pete Staab or Austin Kane for more information about this property.
net leased investment opportunity just off of I-70 in DenverTwo multi-use industrial properties are now available for sale at 4930 and 4950 Colorado Boulevard in Denver. Just north of Interstate 70, these net leased buildings offer an excellent investment opportunity, with credit tenants and annual rent increases.
4930 Colorado Boulevard is 20,399 square feet on a 1.68-acre site. It includes a retail bank and drive through facility plus warehouse storage used to store excess furniture & equipment for all Denver U.S. Bank locations. Price: $1,936,048.
4950 Colorado Boulevard is 44,800 square feet on a 2.41-acre site. This is a warehouse/manufacturing building. Price: $1,871,016.
Jeff McClintock and Matt McClintock of Frederick Ross Company are the listing brokers for these properties. Contact them for more information.
OPPORTUNITIESopportunities
IEWV �
1800 Larimer Street, Suite 1700, Denver, CO 80202 • 303.260.4400 • [email protected]
market perspective
It’s official, the Denver apartment market is heating up and showing no signs of cooling down any time soon! This is the news that investors have been waiting to hear for nearly a decade. Over the past ten years, apartment owners have seen concessions increase to a high of 17.4 percent in 2003, while vacancies rose to 14.4 percent during the same year. For many, the road to recovery has been
frustratingly slow, and although the light at the end of the tunnel seemed close, it remained out of reach.
Today, Denver’s apartment owners are singing a different tune as the apartment market as a whole is showing exceptional strength. Since the beginning of 2010, the
market has absorbed 4,875 units, representing 26 percent of the total number of vacant units across the metro area and the second largest first half absorption total on record. Vacancy rates have fallen to 6.1 percent during the second quarter of 2010, the lowest second quarter vacancy rate since 2001, and a decrease of 33 percent over 2009.
Given this drastic decrease in vacancy rates over the course of the first half of the year, rents
have responded with positive growth. Second quarter market rents increased to an average of $1.06 per square foot, while concessions fell by 5.5 percent over the previous quarter to an average of 9.1 percent. As a result, real effective rents grew by 3 percent, which when annualized equates to a growth rate of 12 percent over a 12-month period.
The long term outlook for Denver’s apartment market is positive. Demand for rental housing throughout the metro area is at a historic high and the level of available units is dwindling fast. In addition, the current construction pipeline is minimal and financing for new development remains nearly impossible. This will continue to keep new additions to the supply extremely limited for the next three years and insure that rents will continue to climb.
Denver’s Apartment Market is hOt, hOt, hOt!!!By Andy HellmanApartment Realty Advisors
“Demand
for rental
housing
throughout
the metro
area is at
a historic
high.”
Andy Hellman
Retreat at City CenterAurora, Colorado
$22,500,000 | 225 Units
Aspen CourtColorado Springs, Colorado
$1,430,000 | 61 Units
r e c e n t t r a n s a c t i O n s . . . a r a r e c e n t t r a n s a c t i O n s . . .
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 2Q'10
effective Rent Growth
Source: AAMD
10.0%
5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2Q '88
2Q '89
2Q '90
2Q '91
2Q '92
2Q '93
2Q '94
2Q '95
2Q '96
2Q '97
2Q '98
2Q '99
2Q '00
2Q '01
2Q '02
2Q '03
2Q '04
2Q '05
2Q '06
2Q '07
2Q '08
2Q '09
2Q '10
Absorption Vacancy
Units
Ab
sorb
ed Va
cancy
Absorption vs. vacancy
Source: AAMD
Uni
ts A
bsor
bed
Vaca
ncy
Apartment Realt y advisors a Frederick R oss Company
IEWV �
IndUStrIAl brokerS
Jason B. Addlesperger [email protected] D. Foster [email protected] K. Lee [email protected] Y. McClintock [email protected] Y. McClintock [email protected] A. Nordling [email protected] L. Wycoff [email protected]
InVeStment brokerS
Wade R. Fletcher [email protected] J. “Packet” Lowrey [email protected] J. Roesinger [email protected] G. Tilton [email protected]
retAIl brokerS
Robert C. Bramble [email protected] O. Griffin [email protected] S. Karsh [email protected] J. Quinlan [email protected]
oFFIce brokerS
Andrew L. Blaustein [email protected] Robert H. Bruce [email protected] R. Burke [email protected] Jeffrey D. Castleton [email protected] A. Gard [email protected] Ben Gilliam [email protected] Grubich [email protected] R. Johnson III [email protected] A. Kane [email protected] A. Krombach [email protected] Thomas M. Lee [email protected] Jared Leabch [email protected] Robertson [email protected] E. Simpson [email protected] Peter M. Staab [email protected] Jonathan P. Tilton [email protected] Treter [email protected] P. Tromly [email protected]
mAnAgement
John P. Box [email protected] D. Thomas [email protected] Plunkett [email protected] McLachlan [email protected] Bergman [email protected]
APArtment brokerS
Doug Andrews [email protected] Cowan [email protected] Greene [email protected] Hawks [email protected] Hellman [email protected] Hunt [email protected]
Terrance Hunt [email protected] McKenna [email protected] O’Dell [email protected] Ozment [email protected] Wine [email protected]
For more than a century, Frederick ross company has provided unparalleled
commercial real estate services in the Denver region. Our locally-delivered comprehensive platform means one thing to our clients: confident decision making.
We provide customized solutions in:
BrokeragemanagementresearchmarketingFinancial analysisconsultingDevelopment/capital
the success of our clients is our paramount objective. Frederick ross company utilizes these services to capture value, minimize risk and maximize profits for its clients.
•••••••
apartment realty advisors (ara) is the largest privately held, full-service
investment advisory brokerage firm in the nation that focuses exclusively on the multi-housing industry. the combination of resources, unparalleled market expertise and nationwide presence in the multi-housing marketplace resulted in an average annual production volume of $5.9 billion in real estate transactions since 2003. apartment realty advisors of colorado, a Frederick ross company, has been the top colorado apartment brokerage for seven of the last eight years. For detailed information on ara’s extensive multi-housing investment services, visit www.arausa.com.
a F r e d e r i c k R o s s C o m p a n y
PEOPLE
IEWV �
Denver Industrial Market Activity
Denver Retail Market ActivityBy Lauren Douglas Director of Research
As the national and local economies improve, albeit slowly, the retail market showed signs of stabilizing in the first half of 2010, logging moderate positive absorption, decreased vacancy, and stable rental rates. Improving consumer confidence, pent up demand and stable consumer prices have sparked a cautious recovery in consumer spending. However, job creation and income growth are necessary to sustain this trend.
2Q10 absorption was positive, at 373,853 square feet, bringing year-to-date absorption to 755,659 square feet, and overall vacancy decreased to 9.19 percent, down from 9.57 percent at 4Q09. Median rental rates were stable.
The development pipeline has diminished to 515,000 square feet under construction, including the 415,000-square-foot IKEA that broke ground this quarter. Two single-tenant projects, totaling 230,500 square feet, were completed in 2Q10. Investment sales remain weak with 2Q10 sales totaling 592,437 square feet for a volume of $63,660,435.
Ross Research believes that in the first half of 2010, the occurrence of positive absorption, signs of an improving labor market, and increased retail sales and consumer confidence signal that the retail market is stabilizing.
Industrial Market Balance
Source: Ross Research Services
Squa
re F
eet
Vaca
ncy
0
2,000,000
4,000,000
6,000,000
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
Absorption VacancySupply
20012002
20032004
20052006
20072008
2009
2Q10
For more Denver market information, please contact Lauren Douglas at [email protected].
Retail Market Balance
Source: Ross Research Services
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
Absorption VacancySupply
20012002
20032004
20052006
20072008
2009
2Q10
Squa
re F
eet
Vaca
ncy
By Sue Selle Analyst
The metro Denver industrial market showed solid signs of recovery during second quarter with positive absorption, lower vacancy and stabilized asking rates. The market’s uptick in activity is expected to continue through the balance of the year, ending 2010 with positive absorption.
The overall Denver industrial market posted positive absorption of 502,174 sf in 2Q10, which brings year-to-date absorption to 417,148 sf. The Industrial/Warehouse sector was the driving force behind the increased activity this quarter, absorbing 512,651 sf of space. The R&D/Flex sector recorded flat activity in 2Q10 with absorption of negative 10,477 sf. The East submarket, which is situated along the Interstate 70 Corridor, was the strongest performing metro Denver submarket during 2Q10 with 440,426 sf of absorption.
Vacancy stood at 7.90 percent in 2Q10, and dipped below eight percent for the first time since 2Q09 when the rate was 7.93 percent. Vacancy for Industrial/Warehouse space
declined from 6.96 percent in 2Q09 to 6.74 percent in 2Q10. Vacancy for R&D/Flex space continued to increase, jumping from 14.19 percent in 2Q09 to 15.32 percent in 2Q10. Although rental rates remain soft, asking rates have stabilized in most submarkets compared to the sharp declines realized during 2009.
M ARKET ACTIVIT Y