In January 2014, Denver ranked #11 in Markets to Watch in the annual Emerging Trends in Real Estate report from PricewaterhouseCoopers LLP and Urban Land Institute. At that time, the outlook for investment, development, and homebuilding was good. How will 2014 end for this residential and commercial real estate market?
Asking prices for multifamily, office, industrial, and retail spaces steadily increased through the year. Property sale prices ended higher in the fourth quarter, although only industrial sale prices didn’t suffer drops during the year. At the end of the year, demand is outpacing supply in all categories, especially multifamily units, opening the market for new construction.
Some of that new construction, in the area of multifamily (condo) construction, is hampered by Colorado’s construction defects law, which eases the path for litigation by homeowners over construction flaws. Builders claim the law has driven up insurance rates for new construction, making many condo projects no longer feasible to build. In Lakewood, more than 2000 new multifamily units are under construction, but they are all rental properties. These types of properties are still very much in demand; Forbes places the Denver metro at #6 in the fastest-growing cities list, up ten places from 2013.
Vacancy rates in all commercial categories are down, as expected in an area where demand outweighs supply. Retail (including restaurant space), office, and industrial construction should continue to grow in 2015.
The predictions for the commercial real estate market in Denver in 2014 do seem to have been realized, and the soaring projections for 2015 seem to be realistically optimistic in the Mile High City.
Recent Comments