the state of downtown denver: a vibrant and resilient

Produced by the Downtown Denver Partnership | downtowndenver.com

Year in Review

Rankings

Employment

Office Market

Talent

Development & Investment

Mobility

Residents

Retail & Restaurants

Public Realm

Tourism

Benchmarking

Impacts of COVID-19

pg. 03

pg. 14

pg. 05

pg. 16

pg. 24

pg. 07

pg. 18

pg. 26

pg. 10

pg. 20

Addendum

pg. 12

pg. 22

Table of Contents

3

This year’s State of Downtown Denver report tells the story of a thriving downtown. It’s the story we have been fortunate to be able to tell for the last decade, as our city has experienced unprecedented, record-breaking growth year-after-year.

To be reporting on numbers that tell a story of economic success amid a worldwide pandemic that has had dramatic economic impact might seem counterintuitive. Though the numbers in this report are recent, they are from a time that for many of us feels so far away.

Just as we have been proud to share the stories of our collective success through this and other reports in recent years, we remain proud to share this report, and we will continue to take pride in sharing the stories of our city.

Over the course of time, all great cities grow and slow, take on new life and characteristics, adapting and reacting to myriad factors – some of which can be controlled or guided and others (such a global pandemic) that simply cannot.

This year’s State of Downtown Denver offers us an opportunity to more deeply understand how we move forward and continue to build our city to be more resilient and more inclusive, and how we innovate to build a place for the future. It is a reminder of decades of intentionality and building with vision that led to economic strength and vibrancy. It shows us that great cities are resilient cities.

And, it is a reminder that this same intentionality and vision will help us return to the levels of success outlined in this report.

In these challenging times, the Downtown Denver Partnership remains deeply committed to building an economically healthy center city.

As you read this State of Downtown Denver report, I urge you to remember that just as our growth and successes are key to our story, so are our challenges. As we look back, we will see that the course of our city will be shaped by how we all respond, together.

Letter from Tami Door, President and CEO of the Downtown Denver Partnership

The State of Downtown Denver: A Vibrant and Resilient Center City


DENVER

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CENTRALBUSINESSDISTRICT

AURARIA

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GOLDEN

LA ALMA/LINCOLN PARK

TRIANGLE

25

Boundary Legend:Center CityNeighborhoodBoundary

DowntownDenver Boundary

All data in this report uses the Downtown Denver boundary, unless otherwise noted.

Boundary Map

Curtis P

ark

Skyline Park

Sonny

Lawson

Park

Benedict

Fountain

ParkPEPSI

CENTER

COLORADO

CONVENTION

CENTER

Gates Crescent

Park

Cherry Creek

Civic Center

Sta-

CivicCenter

Park

SunkenGardens

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MILE HIGHSTADIUM

ARAPAHOESQUARE

5

RankingsDowntown Denver is at the center of a top ranked city and state

Sources ( from top to bottom): U.S. Bureau of Labor Statistics, 24/7 Wall Street, The Motley Fool, Consumer Electronic

Show, FitSmallBusiness, The Wall Street Journal, WalletHub, Lending Tree, Apartment List, Moody’s

1ST Highest increase in personal income in 2019

Colorado

Best state for business

Best state for entrepreneurs and startups

Best state for promoting innovation

Best state for women entrepreneurs

3RD

1ST

3RD

1ST

Denver

3RD Hottest job market

Fastest growing city

Most popular city among millennial homebuyers

Most searched location for out-of-state movers

City best-positioned to recover from coronavirus

5TH

10Top

4TH

1ST


Downtown Denver

The vibrant and vital economic hub of the Rocky Mountain region

7

Employment

Downtown Denver added 6,563 new jobs last year, resulting in record high total employment of 145,077. This 4.7% job growth was fueled by a host of new company locations and major expansions--13 announcements in total. Key employment growth sectors include Professional and Business Services,

which makes up a third of all downtown employment, a growing high tech sector which has doubled since 2010 and represents 9% of all downtown jobs, and Oil and Gas which remains an important part of the downtown economy supplying 6.8% of the jobs.

Employment growth jumps 4.7% downtown

Source: Q3 2019 data, Colorado Department of Labor and Employment, Quarterly Census of Employment and Wages

150K

140K

130K

120K

110K

100K

90K

80K

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

145,077

NU

MB

ER

OF

JOB

S

Downtown Employment GrowthEmployment Growth by Area

Year over Year growth, Q3 2019

4.7%Downtown Denver

2.4%Colorado

2.6%Metro Denver

1.2%United States


Companies that have announced a headquarters relocation, new office, or expansion in Downtown Denver this past year include:

Relocations and Expansions

Bitly

Blitz

Concord

Facebook

Frontdoor

Lyft

PointsBet

Propeller

Robinhood

SalesForce

Silicon Valley Bank

Snapdocs

ViewRay

VF Corp

We chose Denver because it’s a talent hub, filled with diverse and entrepreneurial-spirited people. The culture of Denver aligns with many of our own operating principles, like empathy, innovation and pragmatism. We’re excited to be a part of the Denver community and to build a team here.”

Aaron King, Founder and CEO, Snapdocs

9

Downtown Denver’s Diverse EconomyDowntown Denver has enjoyed extraordinary economic growth over the past 10+ years that has resulted in unprecedented economic diversification. Professional and Business Services, a broad category made up of accountants, lawyers, scientific researchers and marketing specialists, provides over one third of all jobs. Oil and Gas remains a strong component, with nearly 7% of downtown employment. Importantly, high tech jobs have more than doubled since 2010 and now make up about 9% of all downtown employment. Add to this a mix of hospitality, finance and retail jobs and it is easy to see the positive impact of this new economic diversification.

7%Oil and Gas - 7%

• The Oil and Gas industry remains an important part of the Denver economy, employing nearly 10,000 people and leasing approximately 4.3 million square feet of office in Downtown Denver.

• The industry’s share of the economy has declined over the past two decades, with the percentage of downtown employment decreasing from a high of 9.1% in 2014 to 6.8% currently.

• Recent turmoil in the industry suggests further office consolidation and employment losses is likely throughout 2020.

High Tech - 9%

• There are over 13,000 high tech jobs in downtown, the share of which has increased from 5% in 2010 to 9% in 2019.

• High tech jobs are found across all industries, specifically in Professional and Business Services, Financial Activities, and Information.

• Innovation drivers in downtown include: The Commons on Champa , Denver Startup Week, United States Patent and Trademark Office Rocky Mountain Regional Office, and nearly 50,000 college and university students on the Auraria Campus.

32%Professional and Business Services – 32%

• Professional and Business Services is by far Downtown Denver’s largest industry sector, with twice the total employment as the next largest sector, Leisure and Hospitality. This broad category of jobs includes lawyers, accountants, scientific research, and advertising.

• Over the past two years, almost half of all new downtown jobs are in this sector.

• National research shows this sector is expected to be the most resilient to the recession.

Downtown Employment by Industry

Source: Q3 2019 data, Colorado Department of Labor and Employment,

Quarterly Census of Employment and Wages

32% Professional & Business Services

18% Government

15% Leisure & Hospitality

12% Financial Activities

7% Natural Resources & Construction

4% Wholesale & Retail Trade

4% Information

8% Other


Office MarketOver $1.3B invested in the office market

Absorption and Deliveries

Office Market Fundamentals

Driven by demand for space from existing companies expanding (e.g. 2U, KPMG, Salesforce) and new companies moving to the market (e.g. Checkr), the downtown office market remained strong with stable average lease rates ($35.32 per square foot) and vacancy rates (10.3%). A positive 400,000 square feet was absorbed in 2019, bringing the total absorption in 2018 and 2019 to nearly

2 million square feet; however, according to CoStar, net absorption in 2020 is projected to be negative for the first time since 2016. The office investment market reflected the strong performance, as existing players doubled down on their investments and new ones entered the market for a total of $1.3B in office investments.

Source: CoStar

Source: CoStar

14%

13%

12%

11%

10%

9%

8%

7%

6%

Direct Vacancy Rates

$35$33$31$29$27$25$23$21$19$17$15

Direct Average Lease Rates (per sf)

2019

Q1 20202011

2012

2013

2014 2015

2016

2017

2018

(Projected)

DeliveriesNet Absorption SF Total

2MM

1.5MM

1MM

500K

0

-500K

-1MM

2014 2015 2016 2017 2018 2019 2020 (projected)

11

Wells FargoAddress: 1700 Lincoln Stsf: 245,000

Whiting Petroleum Corporation Address: 1560 Broadway sf: 165,000

Checkr Address: 1621 18th St sf: 92,000

2U Address: 1200 17th St sf: 91,500

Noble Energy Address: 1625 broadway sf: 81,547

KPMG Address: 1225 17th Street sf: 70,000

Salesforce Address: 1225 17th Street sf: 64,097

Education First Address: 2375 15th Street sf: 60,000

Ibotta Address: 1801 California Street sf: 60,000

JP Morgan Chase Address: 1601 Market St sf: 56,791

Top 10 Office-Space Leases

Top 10 Office Buildings Sales

1200 17th StBeacon Capital Partners, Ivanhoé Cambridge$400,000,000

717 17th St Brookfield Properties $205,000,000

707 17th St Brookfield Properties $195,000,000

1560 Broadway Rising Realty Partners $143,000,000

410 17th St Rialto Holdings, LLC $127,250,000

1700 Broadway Beacon Capital Partners $78,000,000

1801 Broadway Novel Coworking $40,200,000

1200 Lincoln St The Nichols Partnership Inc $15,250,000

1614 15th St Urban Villages $10,040,000

1740 Broadway Beacon Capital Partners $7,150,000

1

2

3

4

51

3

4

5

6

7

8

9

10

67

8

9

10

We see Denver as an ideal real estate market to invest in. It’s a strategic location for domestic and international business, popular with millennials and supportive of a growing economy.”

Christopher Rising, CEO, Rising Realty PartnersSource: CoStar and JLL

1

2

3

4

5

6

7

8

9

10

1

2 3

45 6

7

8

9

2

10


Talent

All roads--and trains and bus routes and bike lanes- -lead to Downtown Denver, as the center city is the hub of one of the nation’s most highly educated workforces. Topflight talent continues to call the Denver region home, with a fast-growing workforce that is now 1.7 million people strong. The region produces great talent each year, thanks to the 11 four-year colleges and universities educating over 160,000 students annually.

Over the past five years, Metro Denver’s labor force has grown by almost 200,000 people. A recent analysis of U.S. Census data by CityLab found that Denver has had the fifth highest growth in the share of college-educated adults of any city in the country and the eighth highest share of adults with advanced post-graduate degrees.The Denver Metro Area’s unemployment rate was at a historic low of 2.3% at the end of 2019. As of March 2020, the unemployment rate has risen to 4.6% as a result of the economic recession.

Total labor force, March 2020 Unemployment rate, March 2020

Fast-growing region with 1.7 million workforce

Source: Bureau of Labor Statistics

Metro Denver Labor Force and Unemployment Rate

Gretchen Howard, COO, Robinhood

1,700,000

1,650,000

1,600,000

1,550,000

1,500,000

1,450,000

1,400,000

1,350,000

1,250,000

1,300,000

2010 2011 2012 2013 2014 2018 2019 20202015 2016 2017

10.00%

9.00%

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

0.00%

1.00%

The breadth of highly-skilled and diverse talent in Denver across both the [ finance and technology industries] make the city a natural fit for Robinhood.”

13

University of Colorado BoulderBoulder, Colorado

35,967

Colorado State UniversityFort Collins, Colorado

29,429

Metropolitan State UniversityDenver, Colorado

19,444

University of Colorado DenverDenver, Colorado

14,947

University of Colorado Colorado SpringsColorado Springs, Colorado

12,180

University of DenverDenver, Colorado

11,952

University of Northern ColoradoGreeley, Colorado

9,760

Regis UniversityDenver, Colorado

7,907

Christian UniversityLakewood, Colorado

7,625

School of MinesGolden, Colorado

6,263

University of Colorado Anschutz Medical CampusAurora, Colorado

4,000

Colorado CollegeColorado Springs, Colorado

2,114

Source: Metro Denver EDC

1

2

3

4

5

6

7

8

9

10

11

DENVER

COLORADO SPRINGS

GOLDEN

BOULDER

FORTCOLLINS

GREELEY

1

2

3,4

5

7

6

8

910 11

12

Number of Students Enrolled

12

Enrollment in Four-Year Colleges and Universities


Development & Investment

Over the last 10 years, Downtown Denver has experienced a historic development cycle, adding over 4 million square feet of office space, over 10,000 residential units, and over 3,500 hotel rooms. Investors continue to see the Downtown Denver opportunity, with 26 development projects under construction or planned - adding 1.5 million square feet of office, 4,500 residential units and 1,000 hotel rooms to downtown in future years.

Major infrastructure and civic projects are poised to lead the next wave of downtown development.

Future Public Sector Investment

16th Street Mall Reconstruction

Denver Art Museum North Building Project

CSU Spur Campus at National Western

Colorado Convention Center

Skyline Park

Larimer Street Bridge

Protected bike lanes on 18th, 19th &

26 projects under construction or planned

Denver is a vibrant and thriving city, and the ideal place from which to continue to grow our business across the west.”

Laura Newman, Golub & Co

Developments Completed or Underway in Downtown Denver

SQUARE FEET O

F OFFICE SPA

CE

SQUARE FEET OF OFFICE SPACE

93,000 SQUA

RE FEET

0 HO

TEL ROO

MS

1,469 RESIDENTIAL UNITS

$1.1B INVESTMENT

$637MM

INVESTM

ENT

14 PROJECTS UNDER CONSTRUCTION

13 P

ROJE

CTS COMPLETED

$778

MM

INVESTMENT

12 PROJEC

TS PLAN

NED

90,0

00 SQ

UARE FEET

QUA

RE F

EET O

F OFFIC

E SPACE

772

HOTEL R

OOMS

2,55

3 RE

SIDENTIA

L UNITS

930 HOTEL ROOMS

3,042 RESIDEN

TIAL U

NITS

1.4MM SQUARE FEET

$2.5BTOTAL INVESTMENT

Larimer

15

Denver’s Largest Developments Completed in 2019/2020

334 Condominium Units

Developer: East West Partners

First large condo project in Downtown Denver in a decade

382 hotel rooms

Developer: Stonebridge

Unique combination of Tru by Hilton and Home2 Suites by Hilton brands

135,000 square feet of office

Developer: Crescent Real Estate and Legend Partners

First major project to use cross laminated timber in Downtown Denver

Residential – The Coloradan

Hotel – 15th & Stout Dual Brand

Office – Platte Fifteen

Source: DenverInfill

Source: Stonebridge Companies

Source: Denverinfill


Mobility

There are more mobility options into the center city than any other location in the metro area. Since 2013, the share of employees choosing to ride their bikes to work has doubled. Currently, 9.2% of downtown commuters bike to work. And the City continues to make investments that support a multimodal transportation system in and around Downtown Denver. In 2019, the city began a rapid expansion of the bike

network that will add 125 miles of new bicycle infrastructure to Downtown and nearby neighborhoods to make it safer and more convenient for commuters and residents to get around by bike. In fall 2019, one lane of 15th street and 17th street were converted into bus only lane, improving transit efficiency on two major downtown corridors. Finally, the G-line from Wheatridge to downtown opened in April 2019.

Infrastructure helps to double bicycle commuting

Downtown Denver Bicycle Mode Share

For the recruitment and retention of our employees, it’s important to offer multiple commuting options in and out of our headquarter offices in the heart of downtown.”

Tom Pitstick, CMO, Gates Corporation

DENVERUNIONSTATION

CIVICCENTERSTATION

Passenger Rail Lines

Free MallRide andFree MetroRide

High-frequency Bus Routes

Regional Bike Connections

Legend

DENVERAIRPORT

train to

AURORAbus to

GOLDENtrain & bus to

BOULDERbuses to

ARVADA & WESTMINSTER

trains & buses to

LITTLETON & LONE TREE

trains & buses to

Transit43.3%

Drove Alone32.8%

Bicycled9.2%

Walked5.4%

Carpooled4.0%

Teleworked3.1%

Moped/ScooterMotorcycle

1.2%Lyft/Uber/Taxi

1.0%Vanpooled

0.1%

How Downtown Denver employees commute to work

4.3%2012

9.2%2019

17

Downtown’s Regionally Connected Mobility System

*Needs to be updated

DENVERUNIONSTATION

CIVICCENTERSTATION

Passenger Rail Lines

Free MallRide andFree MetroRide

High-frequency Bus Routes

Regional Bike Connections

Legend

DENVERAIRPORT

train to

AURORAbus to

GOLDENtrain & bus to

BOULDERbuses to

ARVADA & WESTMINSTER

trains & buses to

LITTLETON & LONE TREE

trains & buses to


Population growth continues in Denver, and more and more of these new residents are choosing to live downtown and in center city neighborhoods. The most recent census estimates put the City of Denver at 727,211 total residents, a net increase of almost 11,000 over the previous year. With this increase, about 60% came from net migration and 40% from natural increase.This continues a decade long trend of sustained population growth – with Denver adding over 120,000 residents since 2010.Our center city has benefited greatly from

this population growth and is projected to continue growing at a faster rate than the City and State as a whole.The multifamily market has been strong in recent years, with significant new deliveries, positive absorption, and steady rent growth reflective of population growth. Denver is starting to see a slight softening of this market in the downtown boundary and expects to see flat or negative rent growth and increased vacancy through the end of 2020, according to CoStar projections.

ResidentsThird fastest growing downtown in the US this decade

Downtown Denver

Center City

18,12412.7%7.3%

$1,235 $1,680 $2,498

492286

2,3651,395

41,1389.4%5.9%

$1,246 $1,528 $2,169

1,267246

2,9592,126

Total Inventory (units)Overall Vacancy

Stabilized VacancyAvg Rent - StudioAvg Rent - 1 BedAvg Rent - 2 Bed

2020 Estimated Deliveries 2020 Estimated Absorption

2019 Deliveries2019 Absorption

Multi-Family Market

Source: Costar. Rents shown are effective rents

19

Downtown & Center City Population Growth

City of Denver’s Growing Population

Source: Esri Business Analyst

(Projected)2010 2019 2024

Source: US Census

750,000

700,000

650,000

600,000

550,000

500,000

450,000

400,000

20,00018,00016,00014,00012,00010,0008,0006,0004,0002,0000

Total population Net population change

2010 2011 2012 2013 2014 2018 2019 20202015 2016 2017

Total PopulationTotal Households

Average Household Size

WhiteBlack

American IndianAsian

Pacific IslanderSome Other Race

Two or More Races

Hispanic Origin (Any Race)

Median AgeMale

Female

Bachelor’s Degree or HigherMedian Household Income

Center City Resident Demographics

Downtown Denver Resident Demographics

27,01217,1511.46 82%5%1%5%0%3%4%

12%

34.254%46%

73%$95,474

92,50253,6621.65 74%8%1%4%0%9%5%

24%

33.554%46%

62%$69,192

Source: Esri Business Analyst

10,946

727,211


Retail & Restaurants

Retail sales, measured by retail sales tax collections, remained strong heading into 2020. Retail sales were 8.2 percent higher in 2019 compared to the prior year, the largest annual increase since 2014. Retail direct average lease rates were at $29.63 per square foot in Q1 2020, up 8.1 percent year over year and were significantly higher than the Metro Denver average of $18.26. Vacancy rates were also up slightly, rising 0.8 percentage points year-over-year in Q1 2020 to 3.5

percent. Downtown vacancy rates are still a full percentage point less than the Metro Denver vacancy rate of 4.5 percent. Much like their peers across the city, country, and worldwide, Downtown Denver’s restaurants and retailers will face significant challenges resulting from the COVID-19 crisis that is not reflected in these numbers. However, the success of 2019 and recent years provide hope for a successful long term recovery of the retail sector.

Retail sales up 8.2% in 2019

Annu

al L

abor

For

ce G

row

thRetail Sales Tax Collections

Source: City and County of Denver, Office of the Controller

2011 2012 2013 2014 2015 2016 2017 2018 2019

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000 $62,230,582

* Source: City and County of Denver, Office of the Controller

* Source: DDP

Average Daily Pedestrian Traffic on 16th Street Mall

Retail Sales Tax Collections

36,484

21

2019 Downtown Denver Retail and Restaurant Survey

The Downtown Denver Partnership surveyed over 100 retail and restaurant businesses. Key highlights include the following:

Over 80% of businesses said sales are growing or stable

Busiest three months:

• June, July August (restaurants)• July, November, December (retailers)

Busiest three days:

• Thursday, Friday, Saturday (restaurants)• Monday, Friday, Saturday (retailers)

Source: DDP

Key Retail Announcements & Openings:

• Ace Hardware • Choice Market• Fjallraven • Heydey Boutique • Platte Street Mercantile • Royal Robins• Urban Putt

Downtown Retail Customers

70%

60%

50%

40%

30%

20%

10%

0

Downtown employees Visitors from Colorado

Visitors from out of state Downtown Residents

Restaurant Retail Service Overall

Top two categories of customers, asked of a sample of downtown retailers


Public Realm

The public realm is where we get our first impressions of a city, where we experience social and economic interactions taking place between everyone on the street. From kayakers testing their river-boating skills in Confluence Park, to co-workers grabbing a beer for happy hour in Skyline Park, our public spaces Downtown offer a wide variety of experiences to everyone. Public space in Downtown

Denver offers our residents, visitors, and employees over 150 acres of parks and open space as well as unique public spaces like the 16th Street Mall. Future investments in public amenities, such as the Urban Forest Initiative and the 5280 Trail, are sure to create even more outstanding and inclusive public offerings in Downtown Denver.

Great public spaces create quality experiences

Urban Forest Initiative

16th St Mall 5280 Trail Bannock Street Expanding space for safe recovery

Work has begun on the first 142 trees of the Urban Forest Initiative that will add over 40,000 square feet of tree canopy downtown. This $7.5 million-dollar investment over five years will build the infrastructure for 500 street trees downtown and add over 150,000 square feet of tree canopy cover at completion, providing natural shade and greenery to our sidewalks and public spaces.

The 16th Street Mall reconstruction project completed its Federal Review process passing a major milestone and setting the stage to start construction in 2021. The new design will add more usable public space along the pedestrian and transit street for more opportunities to enjoy the outdoors.

Final design is underway on the 21st Street section of the 5280 Trail. This iconic 5.280-mile trail will transform the way we use public spaces, creating more than five miles of urban trails and linear parks through the heart of Denver.

One block of Bannock Street in front of the City and County Building is being transformed from an underutilized roadway into a versatile, year-round public gathering and event space.

Dining al fresco takes advantage of Denver’s weather to provide a safe return to of the restaurant dining experience. Through an Executive Order of the Mayor, Denver is allowing select street closures and expanded patio cafes to accommodate expanded restaurant and retail services.

23

*Needs to be updated


Tourism

Tourism is one of Denver’s top industries and economic drivers, accounting for more than 60,000 jobs in the metro area. And while Downtown Denver tourism enjoyed one of its most successful years ever in 2019, the industry has been disproportionately hard-hit by the COVID-19 pandemic. The closure of restaurants, museums and attractions, coupled with mass cancellation of concerts, festivals and events, means that nearly all of Denver’s demand drivers have been silenced. This has been paralleled in the meetings and conventions segment, which normally accounts for nearly $800 million in annual visitor spending, and has similarly ground to a halt.

Visit Denver, the city’s official marketing arm for leisure tourism and conventions, remains optimistic for a strong return to travel in the future, and is working hard to promote Denver’s ability to deliver safe, enjoyable visits and meetings that will help restore this critical source of economic impact.

Denver continues to generate strong tourism numbers, with 17.3 million overnight visitors who spent $5.6 billion in 2018, results that were on par with 2017. Day visitors to Denver spent an additional $919 million for total spending of nearly $6.5 billion. Since 2006, Denver has seen a 64% growth in leisure visits, versus 24% nationally (Source: Longwoods International Research). On the convention front, in 2019, Denver attracted nearly 400,000 meeting attendees who spent nearly $780 million, including 80 groups that used the Colorado Convention Center.

Record-breaking year halted by the pandemic

Denver International Airport Monthly Passenger Traffic (Originating and departing passengers only, does not include connecting passengers)

4,000,000

3,500,000

5,000,000

4,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

Jan-1

6

Mar-1

6

May-1

6Ju

l-16

Sep-1

6

Nov-1

6

Jan-1

7

Mar-1

7

May-1

7Ju

l-17

Sep-1

7

Nov-1

7

Jan-1

8

Mar-1

8

May-1

8Ju

l-18

Sep-1

8

Nov-1

8

Jan-1

9

Mar-1

9

May-1

9Ju

l-19

Sep-1

9

Nov-1

9

Jan-2

0

Mar-2

0

2019 was a record year for DEN with a total of 69,015,703 passengers travelling through the airport, a 7% increase in total passengers from 2018. Nearly every day in the summer of 2019 a new passenger record was set. Notably, international passenger traffic increased by 7.6% over 2018, serving an all-time high of nearly 3.2 million passengers. As the graph shows, passenger traffic at DEN plummeted during the COVID-19 crisis.”

25

$148.29

Revenue Per Available Room

Average Daily Room Rate

Hotel Occupancy

Source: Rocky Mountain Lodging Report Downtown Denver hotel submarket

$200

$180

$160

$140

$1202014

$187.09

2015 2016 2017 2018 2019

2014 2015 2016 2017 2018

85%

80%

75%

70%

65%

2019

79.3%


BenchmarkingMeasuring up among our peer cities

In addition to understanding how Denver is growing over time, to keep improving, Denver must consistently measure up against our peer and aspirational markets. How does Denver stack up against some of the best markets in the country? This past year, we have seen Denver rise as a place for starting and growing a business, while at the same time being one of the few metro areas to achieve inclusive growth. As Brookings Institution noted in their March 2020 release

of growth and inclusion metrics, only “a handful of very large metro areas— including Denver, San Antonio, and Raleigh, N.C.—bucked the trend by achieving strong progress across all five Metro Monitor dimensions from 2008 to 2018.” Looking at both the overall poverty rate and the racial gap in poverty rates, Denver made more positive progress than any of its peer or aspirational cities over the past decade.

Key Performance Indicators Among 15 Selected Metro Areas

1. Austin 33%2. Nashville 22%3. Dallas 20%4. Denver 20%5. Salt Lake City 19%6. San Francisco 18%7. Seattle 16%8. Portland 16%9. Atlanta 14%10. Phoenix 13%11. New York City 10%12. Minneapolis 10%13. Washington DC 8%14. Los Angeles 7%15. Chicago 4%

Job GrowthChange in Jobs2008 - 2018

Source: Brookings Institution

1. Austin 52%2. San Francisco 43%3. Seattle 42%4. Nashville 37%5. Denver 32%6. Dallas 29%7. Salt Lake City 28%8. Atlanta 25%9. Portland 24%10. New York City 21%11. Los Angeles 18%12. Minneapolis 18%13. Washington DC 17%14. Phoenix 16%15. Chicago 12%

Gross Metro ProductChange in GMP2008 - 2018


1. Austin 35%2. Chicago 18%3. Denver 12% 4. San Francisco 10%5. New York City 4%6. Dallas 2%7. Portland -2%8. Minneapolis -3%9. Washington DC -10%10. Salt Lake City -12%11. Seattle -13%12. Atlanta -15%13. Phoenix -17%14. Los Angeles -25%15. Nashville No Data

Young Firm Growth Change in jobs at young firms

2008 - 2018Source: Brookings Institution

1. Seattle 22%2. San Francisco 21%3. Austin 14%4. Nashville 12%5. Denver 10%6. Los Angeles 10%7. New York City 10%8. Atlanta 10%9. Washington DC 8%10. Salt Lake City 8%11. Portland 8%12. Chicago 8%13. Dallas 8%14. Minneapolis 7%15. Phoenix 3%

Productivty GrowthChange in output per job


27

1. San Francisco 29%2. Seattle 28%3. Portland 15%4. Austin 15%5. Salt Lake City 13%6. Nashville 11%7. Denver 11%8. Los Angeles 9%9. Atlanta 9%10. Dallas 8%11. Minneapolis 8%12. Washington DC 7%13. Chicago 6%14. Phoenix 6%15. New York City 3%

Wage Growth Change in average annual wage


1. Denver -5%2. Minneapolis -3%3. Chicago -3%4. Portland -2%5. Atlanta -2%6. Los Angeles -1%7. Seattle -1%8. Salt Lake City -1%9. Nashville -1%10. Austin -1%11. Phoenix 0%12. Washington DC 0%13. Dallas 1%14. San Francisco 1%15. New York City 1%

Decline in Poverty Rate

Change in relative poverty rate 2010 - 2018


1. Denver -5%2. Austin -4%3. Nashville -3%4. Atlanta -2%5. Portland -2%6. Seattle -1%7. Minneapolis -1%8. Phoenix 0%9. Chicago 0%10. Los Angeles 0%11. Dallas 1%12. Salt Lake City 1%13. San Francisco 2%14. New York City 2%15. Washington DC 3%

Change in Racial Poverty Rate Gap

Change in white/people of color relative poverty

rate gap, 2008 - 2018 Source: Brookings Institution

1. Chicago 155%2. Denver 151%3. Seattle 70%4. Dallas 67%5. Minneapolis 65%6. Washington DC 52%7. Los Angeles 46%8. Nashville 46%9. Portland 38%10. San Francisco 25%11. Austin 24%12. Salt Lake City 23%13. Atlanta 22%14. New York City 6%15. Phoenix -6%

Downtown Population Growth

Downtown Population Growth2000 - 2018


1. San Francisco $92.072. New York City $84.823. Washington DC $59.124. Austin $51.235. Seattle $45.196. Los Angeles $45.127. Chicago $45.088. Portland $34.089. Nashville $33.5110. Denver $31.7811. Atlanta $30.5012. Minneapolis $29.4513. Dallas $28.9814. Phoenix $28.2815. Salt Lake City $24.86

Office RentDirect Asking Rent psf, Q1 2020

Source: JLL

1. Salt Lake City 92. Nashville 343. Phoenix 354. Minneapolis 525. Dallas 636. Denver 637. Austin 698. Seattle 749. Atlanta 8210. Portland 8911. San Francisco 9712. Los Angeles 10313. Washington DC 12414. New York City 14015. Chicago 145

Least Traffic Congestion Annual Hours Lost in Congestion

Source: INRIX

Metro Population GrowthMetro Population Growth


1. Austin 106%2. Phoenix 89%3. Atlanta 72%4. Dallas 60%5. Denver 54%6. Nashville 52%7. Portland 46%8. Salt Lake City 45%9. Washington DC 35%10. Seattle 34%11. Minneapolis 29%12. San Francisco 17%13. Chicago 15%14. Los Angeles 14%15. New York City 12%

1. San Francisco $2,4632. New York City $2,1483. Washington DC $1,3684. Los Angeles $1,3685. Seattle $1,3596. Austin $1,1917. Portland $1,1238. Chicago $1,0989. Denver $1,07110. Atlanta $1,03411. Nashville $95212. Dallas $91613. Minneapolis $91514. Phoenix $88715. Salt Lake City $879

Apartment Rent Average price for a 1 bedroom apartment,

April 2020Source: Apartment List


DOWNTOWN DENVER BUSINESS IMPROVEMENT DISTRICT BOARD OF DIRECTORS 2020

Bahman Shafa, Focus Property Group, Chair

Austin Kane, Unico Properties LLC

David Kaufman, 910 Associates, Inc.

Sandrena B. Robinson, LBA Realty

Ron Fano, Spencer Fane LLC

Jon Buerge, Urban Villages Inc.

Gina Guarascio, JLL

Jennifer L. Hallinan DeLeon,

DOWNTOWN DENVER INC. BOARD OF DIRECTORS 2019-2020

DOWNTOWN DENVER PARTNERSHIP MANAGEMENT GROUP BOARD OF DIRECTORS 2019-2020Trinidad Rodriguez, D.A. Davidson & Co., Chair

* Indicates Downtown Denver Partnership Management Group Board Officer

Board Officers

DENVER CIVIC VENTURES BOARD OF DIRECTORS 2019-2020

Board Officers

Past Chairs Bruce Alexander, Vectra Bank Colorado

Ferd Belz, L.C. Fulenwider, Inc.

Gene Commander, Gene Commander Inc

Patty Fontneau, Benefit Exchangr & Tech Solutions, CIGNA

Jerry Glick, Columbia Group LLLP

Rus Heise, Heise Investments

Don Hunt, The Antero Company

Bill Mosher, Tramell Crow Company

Trinidad Rodriguez*, D.A. Davidson & Co.

Joe Vostrejs, City Street Investors LLC

Elbra Wedgeworth, Denver Health

Past Chairs Jim Basey, Citywide Banks

Brad Buchanan, National Western Center Authority

Stephen Clark, Clark Companies

Rob Cohen, The IMA Financial Group, Inc.

Dana Crawford, Urban Neighborhoods, Inc.

Cole Finegan, Hogan Lovells US LLP

Bob Flynn, Crestone Partners, LLC

Tom Grimshaw, Spencer Fane LLP

Walter Isenberg, Sage Hospitality

David Wollard

Gail Klapper, The Colorado Forum

Kim Koehn, K2 Ventures

David Kenney, The Kenny Group

John Moye, Moye White

George Thron, Mile High Development, LLC

Michael Bearup, KPMG LLP

Albus Brooks, Milender White

Jay Despard, Hines

Erik Carlson, DISH

Brian Chen, Beacon Capital Partners

Jamie Cohen, HomeAdvisor

Janine Davidson, Metropolitan State University of Denver

Lori Davis, Grant Thornton*

Andrew Feinstein, EXDO Development

Dorit Fischer Makovsky*, NAI Shames Makovsky

John Freyer Jr., Land Title Guarantee Company

Anita Graham, VF Corporation

Michael Hobbs, Independent Financial

Jim Holder, Holmes Murphy

Kathy Holmes, Holmes Consulting Group

Dorothy Horrell, CU Denver

Bruce James , Brownstein Hyatt Farber Schreck

Chris Jensen, JPMorgan Chase & Co.

Steve Katich, J.E. Dunn

Kevin Kelley*, Husch Blackwell LLP

Kim Kucera, CRL Associates, Inc.

Peter Lauener, McWhinney

Tom Lee*, Newmark Knight Frank

Nathan Lohmeyer, DaVita

Lee Mayer, Havenly

Matt Most, Ovintiv

Raju Patel, Bank of America

Tom Pitstick, Gates Corporation

Kevin Quinn*, Citywide Banks

Scott Reid, Bluprint

Gary Reiff, UC Health

Maja Rosenquist*, Mortenson

Elizabeth Salomon, Xactly Corporation

Peter Schippits, CBRE

Christopher Shears, Shears Adkins Rockmore Architects, LLC

Ellen Valde, PriceWaterhouseCoopers LLP

Hollie Velasquez Horvath, Xcel Energy Company

Paul Washington, Jones Lang LaSalle

Robin Wittenstein, Denver Health

Hanne Wolf, Liberty Global

Gary Yamashita, Sakura Square LLC

Mike Zoellner*, ZF Capital, Chair

Donna Blair, Continuum Partners LLC

Brianna Borin, Snooze an A.M. Eatery

Sarah Brown*, Semple Brown Design, P.C.

Jon Buerge, Urban Villages

Chris Crosby*, The Nichols Partnership, Inc.

Rhys Duggan, Revesco Properties

Brent Farber, Elevation Development Group, LLC

Greg Feasel, Colorado Rockies Baseball Club

Chris Frampton, East West Partners

Everette Freeman, Community College of Denver

Jon Gambrill, Gensler

Arjita Ghosh, Quizlet

Beth Gruitch, Rioja

Ismael Guerrero*, Mercy Housing

Amy Hansen*, Polsinelli

Katie Kramer, Boettcher Foundation

Greg Leonard, Hyatt Regency Denver at Colorado Convention Center

Traci Lounsbury*, elements

Dana Mack, Olsson

Scott Martinez, Martinez & Associates

Rob McColgan, Modern Restaurant Concepts

Pat McHenry, City Street Investors LLC

Erik Mitisek, highwing

Blair Nelson, 9NEWS

Cindy Parsons, Comcast

Sarah Rockwell, Kaplan Kirsch Rockwell LLP, Chair

Adam Sands, FirstBank

Gloria Schoch, VF Corporation

Bijal Shah, Guild Education

Mark Sidell, Gart Properties

David Sternberg, Brookfield

Mark Stiebeling, Grand Hyatt Denver

Rick Tucker, Hensel Phelps

Lindsay Whetton, TIAA

Ellen Winkler, INDUSTRY Denver

29

For More Information, Contact:Randy ThelenSenior Vice President, Economic Development 303.825.6791 [email protected]

Emily Brett Senior Manager, Economic Development 303.571.8216 [email protected]

Guided by the 2007 Downtown Area Plan, the 20-year plan for Downtown Denver, the Downtown Denver Partnership is leading a place-based economic development strategy to build one of the most vibrant center cities in the country. We work with businesses and investors already participating in the Downtown Denver market, as well as external parties exploring the opportunity, and provide personalized support, including:

• Customized research reports

• Strategic planning

• Site selection assistance

• Innovation and entrepreneurship programming

• Project support


1515 Arapahoe St. Tower 3, Suite 100 Denver, CO 80202 303.534.6161 downtowndenver.com

/DowntownDen

@downtowndenver

/downtown-denver-partnership

@DowntownDenver

State of Downtown Denver 2020 Addendum COVID-19 Response and Recovery Published: May 27th, 2020 The 2020 State of Downtown Denver was published in May 2020 in the midst of the COVID-19 pandemic and subsequent economic recession. At the time of publishing, much of the economic data typically used to measure the economic health of Downtown Denver (eg total employment, wages, retail sales) do not yet reflect the impact of the pandemic-induced recession. Throughout the State of Downtown Denver report, we have taken measures to provide consistent, reliable, and timely information. Wherever possible, we have provided the latest data points available. However, this does not tell the full story of the impact on downtown since the pandemic hit – or a full understanding of what’s to come. Before the COVID-19 crisis, the data shows that Downtown Denver was performing exceptionally well, enjoying record employment, record population, record retail sales, and record tourism. These strong results position us well to withstand the recession, similar to how the Denver region was among the first to recover from the Great Recession. In fact, Moody’s recently ranked Denver among the Top 10 US cities best positioned to recover. As we begin to recover, the Downtown Denver Partnership is committed to rebuilding our economy, to keeping people safe and healthy, and doing so while building a stronger and more inclusive community. In the coming months, the Downtown Denver Partnership will release economic updates that reflect the impacts of the current recession as we receive new data. In the meantime, this Addendum is offered to provide an early look at the impacts of the pandemic on Downtown Denver and how we are responding. Many data points included in this Addendum refer to the City and County of Denver, the Denver Metro area, or the State of Colorado, not downtown specifically, as reliable and timely data for downtown is not as readily available at this time. Stay closely engaged with the Downtown Denver Partnership for the latest data and analysis as we move through various phases of recovery.

Metric: Pedestrian Activity on the 16th Street Mall Geography: Downtown Denver Timeframe: February 1 2020 – May 25 2020 Source: IKE automatic sensors

Pre-pandemic, the 16th Street Mall was the busiest pedestrian corridor in the region, with an average of 20,000 pedestrians per block per day. Pedestrian traffic plummeted mid-March and by April traffic was down almost 80% from February levels. In May, pedestrian traffic has begun to pick up some but remains well below normal levels.

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Pedestrian Activity Index on 16th Street Mall

Metric: Retail and Restaurant visits Geography: City and County of Denver Timeframe: February 15 2020 – May 16 2020 Source: Google Movement Data

Pre-pandemic, retail sales tax collections were up 8.1% year-over-year, with restaurants up over 10%. Restaurants and bars were closed to dine-in service in Denver on March 17 and will be allowed to open with reduced capacity on May 27. Retailers were able to reopen with restrictions beginning on May 9. As of mid-May, Google data shows the retail and recreation category of activity is still down about 50% from baseline but beginning to rebound.

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Percent Change from Baseline Visits to Retail and Recreation Places

Metric: Restaurant Diners Geography: City and County of Denver Timeframe: February 18 2020 – May 25 2020 Source: OpenTable State of the Industry data

Pre-pandemic, the restaurant scene in Denver was thriving. Dinning in at restaurants was prohibited beginning on March 17, so obviously the OpenTable’s seated diners index went to zero. Restaurants will be permitted to begin reduced capacity dine-in service on May 27, so we will watch this index in the coming months.

-120

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Year-over-year Seated Diners at Restaurants

Metric: Work and Transportation Visits Geography: City and County of Denver Timeframe: February 15 2020 – May 16 2020 Source: Google Movement Data

Pre-pandemic, employment was at record levels in Downtown Denver with close to 150,000 workers. And over 43% of these workers chose to commute into Downtown Denver by transit. As offices begin to reopen, Google data shows a slight increase in workers returning to their offices. However, visits to transit stations are still down 63% from baseline.

-90

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Percent Change from Baseline Visits to Workplaces and Transit Stations

transit_stations workplaces

Metric: Unemployment Rate Geography: Metro Denver, Colorado, and United States Timeframe: January 2019 – March 2020 (Metro Denver)/April 2020 (CO and US) Source: Bureau of Labor Statistics

Metro Denver’s unemployment rate was one of the lowest of all metro areas, hitting 2.3% in 2019, more than an entire percentage point lower than the national rate. The April 2020 unemployment rate for Colorado was 11.3% and 14.7% for the nation, both of which are the highest numbers since records have been kept. The April Metro Denver unemployment rate will be released in early June; the March 2020 rate was 4.6%.

4.6

11.3

14.7

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Unemployment Rates - Metro Denver, Colorado, and United States

Metro Denver Colorado United States

Metric: Unemployment Insurance Claims Trend Geography: Colorado Timeframe: January 2008 – May 2020 Source: United States Department of Labor

Pre-pandemic, Colorado had consistent unemployment insurance claims of a 1,000 to 2,000 a week. Weekly new claims peaked the week of April 11, 2020 at 104,572, a stunning 45 times the weekly claims a month prior of 2,321. Before the COVID-19 crisis, the previous weekly high had been the week of 1/9/2010 when 7,749 people filed for unemployment in Colorado. These remarkable numbers reflect the unprecedented nature of this crisis. While weekly claims have continued at an extremely high rate, it does appear that unemployment claims have peaked.

*Note: for data continuity purposes, this data does not include gig workers who have been newly eligible for unemployment in this crisis and add another over ~60,000 to the jobless claims over the past three weeks

0

20,000

40,000

60,000

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Colorado - Weekly Unemployment Insurance Claims

2,321

19,774

61,83846,326

104,572

67,639

38,66228,360 22,732

0

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120,000

Colorado - Weekly Unemployment Insurance Claims -3/14/20 to current

Metric: Office Market Fundamentals Geography: Downtown Denver Timeframe: January 2015 – May 2020 Source: CoStar

Pre-pandemic Downtown Denver’s office market was solid with positive 2 million square feet of absorption in the past two years. As of May 2020, we are starting to see an increase in sublease vacancy as firms place unneeded office space on the market and negative absorption for the year.

10.6%

2.5% 0.0%

2.0%

4.0%

6.0%

8.0%

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12.0%

14.0%

Downtown Denver Office Market - Vacancy Rates

Direct Vacancy Sublet Vacancy

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Downtown Denver Office Market - Net Absorption (sf)

Metric: Apartment Market Fundamentals Geography: Downtown Denver Timeframe: January 2015 – May 2020 Source: CoStar

Pre-pandemic Downtown Denver’s apartment market was absorbing new product at a record pace and had shown three straight years of year over year rent growth. While vacancy rates remain stable, the second quarter 2020 is on track to be the first quarter with significant negative rent growth year over year in downtown since 2010. However, year to date absorption remains positive.

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Downtown Denver Apartment Market Fundamentals

Rent Growth Y/Y Overall Vacancy Rate Stabalized Vacancy

Metric: Downtown Denver Hotel Market Statistics Geography: Downtown Denver Timeframe: April 2019 and April 2020 Source: Rocky Mountain Lodging Report

Pre-pandemic, Downtown Denver’s hotels were enjoying record success as a core of Denver and Colorado’s growing tourism market. As convention, business, and leisure traffic ground to a halt in March, downtown’s hotels were met with unthinkably low occupancy. Many downtown hotels chose to close temporarily, with available room nights dropping by 100,000 from April 2019 to April 2020. The Average Daily Rate of hotel rooms that remained available in April dropped by over $100.

Downtown Denver Hotel Market Fundamentals

Available

Room Nights Occupied

Room Nights Occupancy % Average

Daily Rate REVPAR April 2020 147,374 14,014 9.5% $86.81 $8.25 April 2019 252,780 206,741 81.8% $189.06 $154.62

Metric: Development Pipeline Geography: City and County of Denver Timeframe: YTD April 2019 vs YTD April 2020 Source: City and County of Denver

While we are still waiting to see the full impact of COVID-19 on development activity in Denver, early data from the City’s Community Planning and Development department suggest we are starting to see a decrease in permitting of new projects. According to CPD “to date in 2020, issued permits have decreased by 11% from 2019 levels and the value of these permits (construction labor plus materials costs) is down 32%. 2019 was a record year for permit valuation, so some decrease in valuations was expected, but these numbers likely also reflect COVID-19.”

Development Permit Data 2020 YTD versus 2019 YTD

-11% permits issued -32% valuation permitted

the state of downtown denver: a vibrant and resilient

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