2017 was a year of commercial real estate growth for metro Denver, says CBRE
–By Kelcey McClung – Reporter, Denver Business Journal, Jan. 9, 2018
New commercial construction was a big component of 2017 for metro Denver, with over 5 million square feet of new space delivered in just the industrial sector alone, the highest amount since 2001. That’s according to a new report from CBRE Group Inc. (NYSE: CBG). According to the fourth quarter report for CBRE, most of the new commercial construction in metro Denver is taking place in the Airport and North submarkets.
The year 2017 also saw a lot of high-profile sales of newly constructed office space, said Jenny Knowlton, CBRE’s vice president with capital markets, institutional properties in Denver.
“From 1401 Lawrence to the Triangle Building, Granite Place, the Arrow Building, INOVA and more, we’ve never seen this many new-construction deals sell, which in turn set several records for the city on a price-per-square-foot basis,” Knowlton said. “These sales also attracted significant new capital to Denver that have never owned property in our market before.”
The research showed that of the 4.5 million square feet of office space under construction in Denver last year, 51.6 percent of it is pre-leased, indicating tenant demand. Some other metro-Denver highlights from the report:
• Over 1.6 million sq ft of retail space was under construction in the 4th Qtr — the highest since 2009.
• 4 million sq ft of new industrial projects remain under construction.
• Direct asking lease rates increased to a record high of $26.54 per sq ft.
• Total office investment sales for 2017 hit $2 billion, a 7.1 percent increase from last year.
• Lease rates in retail space were up 4.4 percent year-over-year.