Denver, CO Economic Overview
The city of Denver, also known as the “Mile High City" due to its exact elevation of 5,284 feet, is located in north central Colorado, along the front range of the Rocky Mountains, and is home to roughly 700,000 people, within the city limits. Add to this the residents who are in the 12-city MSA and there is a total population of almost 3.5 million, making the area the 16th-most populous metropolitan area in the country. Denver is equidistant from the large mid-western cities of Chicago and St. Louis and the west coast cities of Los Angeles and San Francisco, which makes it a key trade point for the U.S. and a perfect hub for distribution and transportation. Excellent location is one of the reasons why the Denver commercial real estate market has remained so strong.
The Denver metropolitan area is the 18th-largest metro economy in the country, with an annual gross metropolitan product of nearly $158 billion. In 2016, U.S. News & World Report named Denver as the #1 Place To Live In The USA. By attracting a well-educated and energetic workforce, the economy that was once heavily dependent on the oil industry has now diversified its business base into alternative energy, aerospace, technology, healthcare, finance and telecommunications. Notable businesses located in Denver include AIMCO, the largest owner and operator of apartment communities in the U.S., Molson Coors Brewing Company, Newmont Mining Company, Lockheed Martin and United Airlines.
Denver, CO Commercial Real Estate Market
Denver's strong economy is attractive to national investors from both coasts, as well as international investors seeking to diversify risk, which has resulted in CAP rates being driven down. Government focus on the development of mass transit has increased real estate values, driven growth across the entire Front Range Urban Corridor, attracted diversified large and small business, increased job and population growth, and has ultimately moved Denver from a 2nd tier to a 1st tier market.
There is about 138 million square feet of office space in the Denver Metro Area and the region is currently undergoing a construction boom not seen since the 1990s. Developers are confident in their ability to leverage the region's focus on mass transit, with 75% of the new office developments being one-half mile or less from existing or planned light rail stations. In 2016, nearly 840,000 square feet of office product was delivered to the market and 5.1 million square feet of office space is still under construction as of mid-2017.
Population growth has driven up demand for retail space in Denver and vacancy rates down to about 5%. There is more than 198 million square feet of retail space in the MSA and investment activity in 2016 amounted to over $1.35 billion. Power regional and super-regional shopping centers are one of the hot spots on the retail front, with new delivery to the market of almost 89,000 square feet in 2016 and an additional 58,000 square feet under construction.
Thanks to Denver's centralized location with the Midwest business hubs of Chicago and St. Louis and the west coast commerce centers of Los Angeles and San Francisco, the industrial market in Denver has seen a high demand for space for warehouse and distribution use. The Denver industrial market has about 240 million square feet of space.
Denver, CO Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
Denver, CO Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Denver, CO Commercial Inventory Breakdown
Total: 60,080,576 SF
By square footage range:
- 50k to 100k SF: 5,685,684 SF / 9.46% of total office
- 100k to 500k SF: 36,134,167 SF / 60.14% of total office
- 500k to 1M SF: 13,317,808 SF / 22.17% of total office
- > 1M SF: 4,942,917 SF / 8.23% of total office
- Class A+: 9,011,369 SF / 15% of total office
- Class A: 32,948,989 SF / 54.84% of total office
- Class B: 15,232,221 SF / 25.35% of total office
- Class C: 428,641 SF / 0.71% of total office
Employment in Denver, CO
The unemployment rate in the Denver MSA is about 2.6%, roughly half of the national average. Population has consistently grown, with well-educated millennials attracted by job opportunity, an affordable cost of living and a quality of life that many believe is second to none. According to the BLS, the labor force is about 1.6 million workers. In 2015, Forbes magazine ranked Denver the #1 best place for business and careers.
As evidence that Denver's economic diversification from the fossil fuel industry is well underway, in 2016, the IT-Software industry posted the highest job growth gain, coming in at 9.4%. Other industry categories showing strong job growth were beverage production, investments, clean technology, healthcare & wellness, aviation, pharma, insurance, banking & finance, medical device manufacturing, telecommunications, and aerospace.
The largest employers in the Denver MSA (outside of federal, state and local government) are:
- University of Colorado educational systems;
- Denver Public school system;
- HealthONE Corporation;
- SCL Health System;
- Centura Health;
- Lockheed Martin;
- Kaiser Permanente;
- Denver Health;
- Comcast Corporation;
- Children's Hospital Colorado;
- United Airlines;
- University of Colorado Hospital;
- Wells Fargo;
- DISH Network;
- The IBM Corporation.
Clearly Denver's transition to a 1st tier market is well underway and the demand for retail, office and industrial space in Denver will continue to be strong.
Education in Denver, CO
The Denver metro area offers numerous educational opportunities with its colleges and universities. A few of the most popular are: Metro State College, Community College of Denver, Red Rocks Community College, Colorado School of Mines, University of Colorado at Denver, and University of Denver.
With primary, middle, secondary and charter educational facilities, the Denver Public Schools teach over 84,000 students each year, with a dropout rate of just under 6%.
DPS operates 176 schools and employs over 5,200 teachers, not counting administrative support staff. Also of note is the Boulder Valley School District RE-2 which has received top rankings at both the state and national level. The district educates 30,000 students each year and operates 56 schools over a 500 square mile area.
Commuting Time in Denver, CO
Denver is served by the main interstate freeways I-25 and I-70, along with the I-225, I-270, I-76 and numerous state routes. The surface streets in Denver proper follow a traditional grid system, and commute times average about 22 minutes.
But driving by car is not the only way to commute within the Denver MSA:
- With over 650 miles of bike paths an increasing number of people commute to work by bicycle, and Denver is rated the 3rd most bicycle-friendly large city in the U.S;
- Mass transit in Denver is managed by the RTD (Regional Transportation District) and operates more than 1,000 buses stopping at the 10,000 bus stops within the Denver-Boulder area;
- RTD also operates 9 rail lines serving 44 locations which are responsible in part for the booming commercial real estate market in the Denver MSA;
- Denver International Airport (DIA) is the 10th busiest airport in the world and the 4th busiest in the U.S. Denver International Airport is a major hub for United Airlines, the headquarters of Frontier Airlines, and is also the focus of Southwest Airlines.
- Total Population649,654
- Male Population(50.0 %) 324,730
- Female Population(50.0 %) 324,924
- Median Age34.10
- Average Household Income$79,959
- Median Household Income$53,637
- Median Income Under 25$30,237
- Median Income 25-44$61,418
- Median Income 45-64$58,388
- Median Income Over 65$38,118
- Belcaro Demographics
- Capitol Hill Demographics
- Cherry Creek Demographics
- City Park West Demographics
- Cole Demographics
- Cory - Merrill Demographics
- Country Club Demographics
- Downtown Denver Demographics
- Five Points Demographics
- Gateway Denver Demographics
- Goldsmith Demographics
- Hale Demographics
- Hampden Demographics
- Hampden South Demographics
- Highland Demographics
- Indian Creek Demographics
- Jefferson Park Demographics
- Lincoln Park Demographics
- LoDo Demographics
- Lowry Field Demographics
- Montbello Demographics
- RiNo Denver Demographics
- Southmoor Park Demographics
- Stapleton Denver Demographics
- University Hills Demographics
- Uptown Denver Demographics
- Virginia Village Demographics
- Washington Virginia Vale Demographics
Residential Rents in Denver, CO
When choosing the best place for a business, location research is very important – not only for the office, but also for the employees’ convenience.
Last year the residential rental market in Denver saw nearly 10,000 apartment units brought on line to meet the increased demand for housing, which also helped to slightly decrease rents. Still, the monthly rate for a one-bedroom apartment in Denver is about $1,400 and the rent for a two-bedroom apartment almost $1,800 per month. Developers and apartment investors in Denver continue to see opportunity due to its consistent population growth and job opportunities.
Denver, CO Average Rental Price, November 2018
- $ 1,509/mo
- Studio: $ 1,263
- 1 Bedroom: $ 1,362
- 2 Bedrooms: $ 1,692
Denver, CO Rent Trends
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