DENVER | Main Development Thread #6

[TakeFive]

Originally Posted by DenverInfill

A Tale of Two Cities

Cushman & Wakefield, year end reports for 2014:

Metro-wide Office Vacancy: Phoenix = 21.9%, Denver = 11.5%

Focusing just on the downtown sub-markets:

Phoenix "CBD" (Downtown + Midtown):

Overall vacancy: 23.0%.
Under construction or completed in 2014: 0 sf
Overall Net Absorption in 2014: -86,576

Denver "Urban Core" (CBD + Midtown):

Overall vacancy: 10.8%
Under construction or completed in 2014: 1,162,934 sf
Overall Net Absorption in 2014: 539,128

That's quite an amazing difference between the two cities. Oh, and Denver's average downtown office rental rates are about $9 - $10/sf higher.

http://www.cushmanwakefield.com/~/media/...ix_Americas_MarketBeat_Office_Q42014.pdf
http://www.cushmanwakefield.com/~/media/...er_Americas_MarketBeat_Office_Q42014.pdf

LOL, Yup.

Though the distortion there is that "Midtown" has buildings (not all) that are 40-60% vacant. And the problem is... you'll love this, that in addition to being dated, there's not enough parking to suit what tech minded companies are looking for with their efficient use of space. That despite the fact that light-rail goes right by their front doors, LOL.

CBD is a much better story. The (2) new towers are leased up for the most part. Older buildings though have more vacancy.

The similar to Cherry Creek/Colorado Blvd. new buildings at the upscale area of 24th Street and Camelback has been a problem for both Midtown and the CBD. LoDo would be reflected in Old Town Scottsdale where several Silicon Valley companies have recently expanded (Camelback and Scottsdale Road).

Downtown Phoenix has always been a bit of a stepchild sadly. On the bright side there is renewed urban interest in historical neighborhoods. Things have improved over the last decade but the pace is slow. Downtown hotels & restaurants did enjoy tripling their income over Super Bowl week. There are other Green Shoots so at least there is optimism within the urban community.