Obtaining commercial space for real estate in Denver is a tall order based on the persistent competition for several years. Since 2017, the commercial real estate has exhibited remarkable yields that have attracted and retained investors, and this means that the market could soon be a battleground in its own right.
Office properties have demonstrated impressive returns based on the 22 properties sold within the first three months of 2018. According to CBRE, such sales culminated to a staggering $152 million deal with the Denver Tech Center pulling in $977.9 million. Sale prices commanded $316.58 per square foot, which saw a 29-percent increase from office deals made in the last quarter of 2017.
Mixed-use retail, additional space for restaurants, and smaller stores that fill the ground for urban apartment and office buildings remain in demand. Denver developers have obtained an approximate 1.2 million square feet of retail space under construction with 313,000 square feet already accounted for. This saw a nine percent increase compared to similar figures last year. The acquired retail space under construction was regarded as the highest amount since 2009. Lease rates also increased by 4.4 percent over the previous year.
New Construction Sales
New commercial construction, which was a major real estate driving force, accounted for over five million square feet of additional space created in just the industrial sector alone. This was arguably a significant improvement since 2001. Also, 2017 saw massive sales of high-profile, newly constructed office. These sales also contributed to the infusion of substantial new capital that has never been in the Denver market before.
Total construction investment accounted for $2 billion in 2017, a 7.1 percent increase since last year. With an extra 4.5 million square feet of construction projects still in the pipeline and 51.6 percent of that pre-leased, it’s evident that there’s tenant demand and incoming capital will significantly alter the commercial real estate market in Denver.
Industrial lease rates are on the rise, coupled with minimal progress in new construction. Approximately three-quarter of the current pipeline is earmarked around Denver International Airport and on the northern part of the metro area. Such an intensive project can be attributed to the overwhelming purchase of goods online, which necessitates the construction of more warehouses and distribution centers. Residential real estate also accounted for significant growth to keep up with the rising populations flocking Denver for employment and investment opportunities.
The Colorado commercial real estate market is booming, and investing now gives you an opportunity to be a part of the amazing transformations. For real estate brokerage in Denver, contact Unique Properties to learn more about the opportunities and how we can help you.
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