Last year was another banner year for commercial real estate development in Denver. In the metropolitan area, 19 properties sold for more than $100 million – for a total of $2.8 billion dollars in transactions. While certain segments like office and retail slowed to below 2015 levels, the market for apartments was strong and growing.
Included in the sales were several high-profile properties such as the $350 million sale of The Breakers, a 1,523-unit apartment complex. This represented a record price for an apartment complex in the Denver metro area. One the retail side, the Clayton Lane Shopping Center in Cherry Creek changed hands for $169 million. The $113 million sale of the CoBank building in January was notable as the first time Asian capital was spent in our state’s office market.
Overall, commercial real estate continues to trend upwards in Denver with some high-profile deals shaping up in the coming months.
2017 is all about E-Commerce
After many years of such rumors, e-commerce is poised to impact the Denver market in 2017. Jim Bolt, executive vice president of CBRE Industrial and Logistics in Denver, recently predicted in The Denver Post, “What we’ll see is bigger buildings announced for e-commerce users than we’ve ever seen in Denver before.” In fact, such properties could be in the one million-square-foot range. Any e-commerce company that hopes to deliver products in the Rocky Mountain area will need a brick-and-mortar presence in Denver.
This growth in e-commerce will come from the sturdy industrial market that just marked its 27th quarter in a row of positive growth in the final quarter of 2016. In fact, each of the three primary commercial real estate pillars – office, retail and industrial – ended 2016 in strong shape.
If Denver continues to do well in employment rates, expect to see ongoing growth in the world of commercial real estate. As top-end lease rates stayed flat at a $33.47 price per square foot at year end, Class A rates look to fall slightly in 2017 as middle and lower-end lease rates rise. Currently, Denver is experiencing one of the largest spreads of rental rates of any large metro area in the United States. 2017 should see a narrowing of that spread.
Jon Weisiger, senior vice president of CBRE Retail, predicted – also in The Denver Post – that 2017 will be “another good year for retail.”
If you’re considering an investment in commercial real estate in the Denver market, and looking for a commercial real estate broker in the area, give Unique Properties a call. We are a leader in the market, serving all areas of investment properties, including office, industrial, retail, multi-family and land. Whether you’re looking to buy or sell, Unique Properties has an investment expert that will bring you to the closing table!