CREJ

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Page 2 — Property Management Quarterly — April 2017
Letter from the Editor
I t can be helpful to have a quick
snapshot of how a specific
property market is performing.
In-depth articles about each
market are included in our other
quarterlies, Office Properties Quarterly,
Retail Properties
Quarterly and Mul-
tifamily Properties
Quarterly. However,
I thought it might
be useful to get a
brief overview on
market performance
through these first
few months of 2017.
• Office. Following
a strong 2016, this year is predicted to
offer more of the same as companies
expand and hiring remains stable.
While the end of 2016 and the begin-
ning of 2017 were relatively quiet, the
Denver office market has enjoyed a
seven-year expansion run, resulting
in a total of 8.4 million square feet
of absorption and a 594-basis point
plunge in vacancy, according to a
report from Newmark Grubb Knight
Frank.
This year will see healthy net
absorption that will keep Denver office
vacancy near historical lows even as
completions reach a cyclical high,
according to Marcus & Millichap.
Colorado will continue to see its
national reputation change from a
second-tier to first-tier market in the
eyes of national and international
investors. In fact, Denver advanced to
the No. 8 spot on a list of the best met-
ros for investment on this year’s CBRE
Americas Investor Intentions Survey.
• Multifamily. As homeownership
rates continue to fall, the apartment
market remains in demand. This
demand is caused by millennials and
baby boomers deciding for lifestyle
choices to be renters rather than
owners as well as a limited supply of
affordable for-sale homes for first-time
buyers.
Strong job growth will encourage in-
migration, which will help offset some
of the record-number of units com-
pleted this year and vacancy is expect-
ed to remain below early-2000 levels,
according to a report fromMarcus &
Millichap. However, the high number
of deliveries is causing some growing
calls for caution among those at last
month’s CREJ multifamily conference.
• Retail. The adage “retail follows
rooftops” is proving an accurate state-
ment, as retail activity is busiest in
and surrounding high-density popula-
tion areas. Repurposing of larger, big-
box vacant spaces will require creativ-
ity as consumers demand experiential
retail over many traditional outlets.
This year, builders will scale back
completions for a second consecu-
tive year. In 2016, 745,000 sf of retail
space was brought on line. This year’s
deliveries will be limited to mostly
preleased centers or single-tenant
buildings, according to Marcus & Mil-
lichap. As a result, tenant demand will
outweigh supply additions, pushing
vacancy below 5 percent and raising
rental rates. Last year, rates went up
3.6 percent, increasing the average
rental rate to $17.19 per sf, according
to the report.
303-623-1148, Ext. 104
CONTENTS
DENVER’S
PROPERTY MANAGEMENT
POWERHOUSE.
Leasing Advisory  Global Corporate Services  Investment Sales and Capital Markets  Multihousing  Consulting
 Program and Project Management  Property and Facilities Management  Valuation and Advisory Services
Dan Simpson, Director of Management Services
1800 Larimer Street, Suite 1700, Denver CO 80202 T 303.892.111
Newmark Grubb Knight Frank has built a reputation for delivering superior
operations and services for all classes of commercial properties, regionally
and worldwide.
Newmark Grubb Knight Frank provides property management for more than
210 million square feet in the U.S.