As we move into the spring of 2013 Denver is definitely recovering from the economic recession. This can be seen in the growth in population and jobs as well as the return to pre-slump housing prices and increased number of construction projects. Economist Kevin Thorpe presented the following statistics on Denver’s improved economy as part of Cassidy Turley’s May 2013 Commercial Real Estate Forecast.

Population growth:

The Denver metro area, including Aurora and Broomfield, is currently ranked at 19^th out of 382 metro areas for population growth, with a current population of 2.345 million.

Job growth:

The Denver metro went from severe job losses in 2009 and 2010 to an increase of 20,100 jobs in 2011 and 32,000 in 2012. This most recent growth is nearly double the historical average of 18,000 per year. This growth trend is continuing in 2013, with predictions that Denver will add another 35,000 to 40,000 jobs this year. Boulder and Denver are both in the top 15 U.S. cities experiencing employment gains, with 3 percent and 2.7 percent respectively. This is nearly twice the growth seen nationwide in the first quarter of 2013: 1.5 percent. Denver saw job growth in the following sectors: professional and business services, education and health, manufacturing, retail trade, financial activities, and leisure and hospitality. The only sectors that experienced losses were government (including federal, state and local) and information.

Employment:

Denver is ranked 6^th out of the top ten office markets in the U.S. Employment working with natural resources has seen a steady rise from 68,000 in 2011 to 76,000 in 2012. Denver has also seen an increase in employment by technical companies, from 33,900 in 2010 to 38,900 in 2012, while there has been a slight decrease in telecommunications employment, which dropped by 1,600, from 20,400 to 18,800.

Housing market:

Home prices in the Denver metro area have been slowly increasing since the beginning of 2009. By the end of 2012, they had returned to, or exceeded, the highs of 2005 to 2007. The median home price in Denver was $258,000. Residential permits for single- and multi-family are still down from the numbers in the early 2000s, but they are slowing recovering and are projected to continue rising in the next few years. Single-family permits are projected to increase more so than permits for multi-family buildings.

CRE Market:

Denver is currently 5^th in the nation for office rent growth, with a 6.2 percent increase in the past year. Landlords will continue to benefit from increased office rents, which are likely to increase another 5 percent by 2014. Denver is also experiencing its lowest vacancy rates since 2008, with 6.4 percent for industrial properties and 2.5 percent for big box properties.

This blog was written by Bob Amter, President of Montegra Capital Resources, LTD., a Colorado hard money lender.  [google_authorship] has been in the private capital lending business for 41 consecutive years.

Source:

Cassidy Turley 2013 Commercial Real Estate Forecast

Kevin Thorpe, Chief Economist