Q4 2020 Commercial Market Report- The market trends continued through the end of the year with Retail suffering the most, followed by Office. The Denver Office Market (OM) has softened following 10-years of solid growth. Industrial continues to prosper during the pandemic era with the high demands of e-commerce. Denver’s history of being a very much desired market (competitive jobs, outdoorsy lifestyle, family-work balance, amazing weather) is forecasted to survive the pandemic storm, unlike other city markets. Even through this recession, the professional and business job market had a 1.2% job growth, which equated to 3,900 new jobs.
The pandemic shutdowns have had less of a negative hit on the industrial sector than in the retail or office. The e-commerce and 3PL tenants (storing or shipping businesses) continue to see an upward trend as consumers order more from home during the pandemic. Vacancies were below the long-term average even through the 2019 pandemic crisis with more than 6 million SF of deliveries. And another 6.2 million SF currently under construction. Rents are >60% above the peak of the previous cycle, which brought Denver to be the best performer in the nation. This past year’s rent growth did report to be moderate despite the trends of previous years. Investors in the IM remained enthusiastic about Denver’s sale record highs for the second year in a row. Pricing continues to rise, though at a more modest pace than in years past.
During these times entrepreneurs should look for opportunities in owner-occupied spaces that have done well in years past. The ideal seller is a retiree who is ready to execute his/her succession plan. With today’s economic state, you may win a better deal and the seller will still walk away on the upside as well. Interest rates are at an all-time low, which makes it an ideal time to lock in those fixed-rate SBA 504 commercial real estate loans. Some lenders are offering financing for up to 90% LTV (loan-to-value ratio) with 25-year terms. For more information on how to benefit from the current market, contact Transworld Commercial Real Estate at 720-574-2953 or visit transworldcre.com for more information.
For more information on how to benefit from the current commercial real estate market, contact Transworld Commercial Real Estate at 720-574-2953 or visit transworldcre.com.
Transworld is a leading commercial real estate firm in Colorado serving the Rocky Mountain Region. Over the past eight years, our team has completed more than 200 transactions totaling 2.5 million+ square feet in leasing and have completed in excess of $30 million in sales over 25 states in the retail, office, industrial, and flex commercial real estate markets. Through their business brokerage partner, Transworld Business Advisors – Rocky Mountain, Transworld also advises clients on business mergers & acquisitions.
* This Commercial Market Report was compiled with data provided by Transworld Commercial Real Estate and CoStar. Cover photo provided by Zoom.us.