Monthly Economic Indicators - Metro Denver Economic … · 2019. 10. 2. · According to Thumbtack,...

Monthly Economic Indicators

October 2019

Energetic Bodies. Energetic Minds.

www.metrodenver.org

Research Sponsor

www.pinnacol.com

Monthly analysis

of 18 key economic

indicators in

Metro Denver

Development Research Partners

www.developmentresearch.net

A CEO's Insights:Mentoring, October 2019

Mentors can be the key to a successful career. Yet Pinnacol’s recent research into Colorado workers’ attitudes, needs and aspirations uncovered that a whopping 70 percent of Colorado workers don't have a mentor. And less than half say their supervisor helps them manage their careers.

As Colorado’s job market remains tight, employers know the importance of taking advantage of any opportunity to attract and retain top talent, and developing the skills of those we employ. Yet while employees are clamoring for career guidance, sometimes there just aren't enough hours in the day for those of us in leadership positions to provide it.

Mentoring arrangements, though, don’t have to center around regularly scheduled meetings or significant time commitments. More casual approaches can yield big benefits for your employees – and, by extension, your company. For example:

1. Invite your team member to a professional functionChamber of Commerce events, EDC presentations and industry association meetings are all ideal opportunities to invite a junior-levelcolleague to join you. They'll build their own networks and develop an understanding of the issues your industry is wrestling with.

2. Focus on what they need mostIt's easy to picture mentoring as an amorphous commitment that entails you devoting yourself to answering “Big Questions" and offeringinput on your mentee’s latest dilemmas. But it can be just as effective to focus on just one key area where they struggle. Schedule an initialsession to set a very specific goal, and then focus future meetings on that one area. Stay in touch when you don't have time for even aninformal meeting by setting a Google Alert for the topic, like “effective presentations," and send related articles when they pop up. Yourmentee will appreciate that you are thinking about them, and you can offer a quick touch-base with minimal effort.

3. Combine mentorship with exerciseWe live in Colorado, after all. Most of us love to get out in the great outdoors and enjoy nature's playground. Replace a sit-down mentoringsession with a “sweatworking" activity. While you're walking, hiking or riding the chairlift together, you can share some of your own careertales and talk through issues they might be having with anything from job skills to client relationships.

4. Teach by exampleDoes your employee want to polish their meeting management skills? Invite them to sit in on your next client meeting and point out skillsyou've honed, such as engaging every attendee at the table or politely overcoming rejections. Recommend they take notes while theyobserve, then circle back to see what they learned and address any lingering questions. Do they want to hone their strategic planningacumen? Widen the net for your next strategy exercise to include people outside your executive team, and enable those other employees toengage fully in the work. We do this regularly at Pinnacol, and it’s added immeasurably to the quality of the insights and resulting plans.

Phil Kalin joined Pinnacol Assurance as CEO in 2013. He has served as the chief executive of both public and privately-backed companies, including large

hospital systems, as well as organizations focused on health care data, technology and education. He has been active nationally on health care topics related

to insurance, data analytics, technology innovation, cost improvement and risk mitigation. Phil is providing an informed opinion on what we see in the Monthly

Economic Indicators.

When you run a business, your team is one of your most important assets, and nurturing those relationships is key to building a high-performing team. You can enhance employee allegiance and business results with this type of low-key mentoring.

Metro Denver Economic Development Corporation | October 1, 2019 | Page 1

The Monthly Economic Indicators is a comprehensive analysis of economic conditions in the seven‐county Metro Denver area, or the region comprised of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties. There are two metropolitan statistical areas (MSAs) located within the Metro Denver region: the Boulder MSA (Boulder County) and the Denver‐Aurora‐Lakewood MSA (the Denver MSA) (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties). This report presents recent data and long‐term trends for the seven‐county region, MSAs, or counties, depending on availability. The analysis includes four main data sections: labor force and employment, the consumer sector, residential real estate, and commercial real estate.

Notable Rankings

According to Thumbtack, a San Francisco‐based company, Denver ranked No. 6 in the company’s “2019 Small Business Friendliness Survey”. The report surveyed over 5,000 small business owners, asking questions such as licensing requirements, tax regulations, and labor and hiring regulations. Denver received an “A” mark, with high ratings for employment, labor and hiring, government websites, ease of hiring, and training and networking programs. In 2018, Denver earned a C‐ ranking, with an F for government websites. Overall, the state of Colorado received an A‐ score, up from a C‐ overall in 2018.

According to the “State of Women‐Owned Businesses Report” by American Express, Colorado ranked No. 10 among states where women‐owned businesses wield the most “economic clout”. The metric factors in the combined growth rates of the number of women‐owned firms, their employee counts, and their revenue to measure the strength of women‐owned businesses by geography. According to the report, women‐owned businesses in Colorado grew 11.4 percent from 2014 to 2019, while Metro Denver reported an increase of 13.9 percent during the period. The report used U.S. Census Bureau’s Survey of Business Owners to arrive at the figures.

In a report by Reuters, Colorado ranked in the top 20 for “superstar cities”: cities who experienced high growth in an educated workforce, concentration of companies in a single industry, and a younger workforce attracted to the area, from 2010 to 2017. The report compared job growth and wages post‐recession and found that the top 20 cities accounted for 40 percent of the new jobs generated after the recession with a similar share for wages. Metro Denver accounted for 1.56 percent of the national private employment between 2010 and 2017, ranking No. 11.

According to the Urban Land Institute’s “Emerging Trends in Real Estate” report, Denver ranked No. 17 for overall real estate prospects. The report surveyed respondents and asked them questions about national and local real estate prospects, how investors are allocating their transactions, and how the flow of people shape the area. Denver ranked No. 8 last year, falling 11 spots this year. The report noted Denver had a strong growth trajectory combined with a good size but had hurtles to overcome such as rising costs in residential real estate and construction.

DLA Piper, a global law firm, ranked Denver as the second top U.S. city for CRE investment in the coming year. The report interviewed respondents on factors relating to the commercial real estate market, including questions regarding the 12‐month outlook on the market, regional factors, asset classes, and interest rates. Twenty‐five percent of respondents cited Denver as a top city they will be investing in the year ahead, behind Boston at 26 percent and ahead of Los Angeles at 24 percent.

According to U.S. News and World Report’s “2020 Best Public Undergraduate Business Programs”, the Leeds School of Business at the University of Colorado Boulder ranked No. 20, up from No. 22 the previous year. The report ranked schools based on the quality of business programs from deans and associate deans from 504 business programs across the country that are accredited by the Association to Advance Collegiate Schools of Business.

According to HSH.com’s “Home Price Recovery Index”, Metro Denver ranked first for areas that have recovered the most from the previous peak of housing prices. The report uses the Federal Housing Finance Agency’s (FHFA) Home Price Index to determine which housing markets have recovered using peak values reached before and after the recession. Metro Denver home prices were 91 percent higher compared with the previous peak before the recession, the largest movement in housing prices.


According to a report by the Accessibility Observatory at the University of Minnesota, Denver ranked fourth among the nation’s 50 largest metro areas for accessibility to jobs by bicycle. The report looked at bike routes, comparing cities based on their network of bike lanes and paths that are physically separated from motor vehicle traffic and ranking based on the stress and comfort levels of the networks.

National Economic Overview

Gross Domestic Product

The U.S. Bureau of Economic Analysis (BEA) released their third estimate of real gross domestic product (GDP) for the second quarter of 2019. The estimate remained consistent with the second estimate at 2 percent during the quarter.

U.S. GDP growth fell 1.1 percentage points from the first quarter of 2019 and was 0.6 percentage points lower than the same time last year. The third estimate that held GDP at 2 percent cited downward revisions in personal consumption expenditures and nonresidential fixed investment, which was offset by upward revisions to government spending and exports.

Interest Rates

The Federal Open Market Committee (FOMC) of the Federal Reserve decided to lower the federal funds rate to a range of 1.75 to 2 percent, the second consecutive decrease in the fed funds rate.

Committee members cited muted inflation pressures and weakening business fixed investment and exports as reasons for lowering the rate. As the labor market remains strong and unemployment remains low, global developments for the economic outlook remain uncertain. The downward shift supports the goals of sustained economic expansion and strong labor market conditions as the Committee continues to monitor financial and international developments in the economic outlook moving forward. A growing number of officials expect one more reduction this year based on economic projections released after the meeting.

The next FOMC meeting is October 29‐30, 2019.

Policy Watch

National & International

The United States and Japan signed a limited trade deal that will open Japanese markets to American farm goods,

including reducing barriers on beef, pork, wheat, cheese, almonds, wine, and other products. The deal also cuts

American tariffs on Japanese turbines, machine tools, bicycles, green tea, flowers, and other goods. While the deal

opens markets for both sides, it does not go as far as the Trans‐Pacific Partnership which covered a wider range of

industries and rules that govern trade. The trade deal comes during increasing trade tensions between China and the

U.S. that have hindered American farmers and manufacturers.

Local News

Adams County approved stricter regulations for oil and gas companies in the county, following a new state law signed

in April by Governor Jared Polis that allowed local governments to regulate oil and gas activity within their borders. The


new rules include doubling the state‐mandated distance between new wells and homes, as well as requiring companies

to submit an “alternative site analysis” to the county so they can evaluate drilling locations for impact to public health

and safety before a final site is approved. The decision, which passed 5‐0, also included concessions for oil and gas

production including dropping regulations requiring certain worker training standards.

State economic forecasts showed signs of weakening as business spending and exports declined more than expected

this summer. Trade tensions and slower growth abroad hindered economic activity and contributed to a 6.4 percent

drop in Colorado exports this year through July. Colorado farmers were most affected, with wheat exports declining 56

percent and corn exports down 44.5 percent. While there is continued worry about the economic outlook, the

economy remains relatively strong. Employment and wage growth in the state have remained strong and consumer

spending continues to drive economic activity, but the tighter labor market is also constraining business growth. Lower

housing and energy prices as well as lower interest rates are helping reduce inflation and maintain strong housing

demand, according to the Office of State Planning and Budgeting. However, business confidence has decreased, and

increasing uncertainty with the ongoing trade war is expected to slow growth further in 2020 and beyond. In total, risks

of a recession have increased during the forecast period amidst slower economic growth, according to the Colorado

Legislative Council.

The C‐470 Express Lanes project, which was supposed to be completed by August 1, will be delayed up to a year. The

project will add an express lane in each direction and new estimates put the completion date between December and

June 2020.

RTD announced the new N‐Line commuter train that will serve Thornton, Commerce City, and Northglenn will be

delayed further until May or August 2020. The line was originally supposed to open in 2018. The 18.5‐mile rail line will

be part of RTD’s FasTracks, the multibillion‐dollar transit expansion plan for Metro Denver and will be operated by RTD

itself rather than contracted out to Denver Transit Partners which currently runs the A, B, and G lines.

Economic Indexes & Notable Data Releases

National & International

The U.S. goods and services trade deficit decreased to $54 billion in July, down from $55.5 billion in June, revised. Exports in July were $1.2 billion more than June exports, reaching $207.4 billion, while imports in July were $261.4 billion, $0.4 billion less than June imports.

The Conference Board Leading Economic Index (LEI) was unchanged in August, remaining at 112.1 following a 0.4 percent increase in July. Housing permits and the Leading Credit Index offset weaknesses in the manufacturing sector and the interest rate spread. The trends of the LEI reflect trends in the economy, which is expanding at a slower rate primarily driven by strong consumer spending and strong job growth.

According to the Institute for Supply Management’s Manufacturing Index, the Purchasing Managers Index (PMI) was 47.8 percent in September, a decrease of 1.3 percentage points from the August reading of 49.1 percent. The level in September marked the second consecutive month of contraction after a 35‐month expansion period from August 2016 to July 2019. The reading reflects slower economic expansion in the wake of global trade tensions and decreasing consumer sentiment. Three of the 18 manufacturing industries reported growth in September: miscellaneous manufacturing; food, beverage, and tobacco products; and chemical products.

The Non‐Manufacturing Index (NMI) by the Institute for Supply Management decreased 1.4 percentage points to 53.7 in July, with economic activity continuing to grow for the 114th month but at a slower pace. Of the 15 industries included in the index, 11 reported increased employment, with the accommodation & food services and the utilities industries reporting the largest growth in July.


The Non‐Manufacturing Index (NMI) by the Institute for Supply Management increased 2.7 percentage points to 56.4 percent in August, marking the 115th month of economic expansion. Sixteen non‐manufacturing industries reported growth in August, with only one industry (wholesale trade) reporting a decrease over‐the‐month. The rise in the index reflects a rebounding from the two previous months of decreasing non‐manufacturing growth.

Local

The University of Colorado Boulder Leeds School of Business released its fourth quarter 2019 Leeds Business

Confidence Index. The index fell into negative territory ahead of Q4 2019, the first negative outlook since Q2 2011 and

registering the lowest index value since the end of the recession. The index was 46.9, a decrease of 3.6 points from the

previous quarter. All six individual components of the LBCI fell, with only the industry sales component remaining

above 50, which is considered positive. The report cited ongoing trade tensions, the additional interest rate cut, and

increased political strain in the Middle East as factors for the fall in confidence.

According to the regional Beige Book by the Kansas City Federal Reserve, economic activity grew slightly in July and

early August, with experts citing increased consumer spending and continued job growth, albeit at a slower rate, offset

by weaknesses in manufacturing and weak agricultural conditions. Wages were mixed across sectors, and input prices

rose slightly. The latest round of U.S. tariffs on China was cited as a reason for the weakening manufacturing sector and

a fall of commodity prices, with respondents expecting continued negative effects brought on by the trade war.

Labor Force and Employment

Employment in Metro Denver increased 1.9 percent between August 2018 and 2019, adding 32,300 jobs across all supersectors over‐the‐year. The Denver‐Lakewood‐Aurora MSA increased 1.9 percent, adding 29,600 jobs, while the Boulder‐Longmont MSA increased 1.4 percent, or 2,700 jobs, over the period.

Ten of the 11 supersectors reported increases over‐the‐year, with professional and business services reporting the largest increase (+4.4 percent or 13,800 jobs), followed by other services (+4 percent) and financial activities (+3.3 percent). The government supersector reported the only over‐the‐year decrease, falling by 0.4 percent.

Employment in Colorado increased 2.1 percent, adding 58,700 jobs over‐the‐year. Employment across the U.S. increased 1.4 percent during the period, rising by over 2 million jobs.


Nonfarm Wage & Salary Employment (000s, not seasonally adjusted)

Month of Month of Month of

Year‐to‐Date

Average

Year‐to‐Date

Average

Year‐to‐Date

Average

Annual Growth

Rate

Annual Growth

Rate

Aug‐19 Jul‐19 Aug‐18 YTD 2019 YTD 2018 % Change 2014 2009

Total 11‐County Metro Denver* 1,746.3 1,736.9 1,714.0 1,717.2 1,688.6 1.7% 3.7% ‐4.3%

Denver‐Aurora‐Lakewood MSA 1,547.7 1,538.8 1,518.1 1,518.8 1,495.6 1.6% 3.9% ‐4.2%

Boulder MSA 198.6 198.1 195.9 198.4 193.1 2.8% 2.5% ‐4.8%

Natural Resources & Construction 119.1 117.4 116.5 115.3 113.3 1.8% 12.1% ‐16.3%

Manufacturing 90.0 90.1 89.3 89.1 88.6 0.5% 2.2% ‐10.2%

Wholesale & Retail Trade 237.6 238.6 237.6 236.5 235.6 0.4% 2.9% ‐5.8%

Transp., Warehousing & Utilities 63.0 63.2 62.5 63.4 61.1 3.8% 3.6% ‐6.0%

Information 59.1 60.0 58.8 58.5 58.3 0.4% 1.3% ‐4.4%

Financial Activities 122.8 120.0 118.9 117.5 117.9 ‐0.3% 1.8% ‐4.4%

Professional & Business Services 326.7 326.2 312.9 318.3 305.1 4.3% 3.9% ‐6.2%

Education & Health Services 221.4 219.7 215.1 219.1 214.1 2.3% 4.8% 3.0%Leisure & Hospitality 200.9 201.9 198.3 192.4 191.0 0.7% 4.4% ‐3.4%

Other Services 67.2 67.0 64.6 66.7 63.8 4.6% 3.7% ‐1.8%

Government 238.5 232.8 239.5 240.5 240.0 0.2% 1.6% 1.5%

Federal Gov't 30.5 30.4 30.2 30.1 30.1 0.1% ‐0.8% 0.6%

State Gov't 58.3 57.1 61.0 62.4 64.2 ‐2.8% 1.7% 4.0%

Local Gov't 149.7 145.3 148.3 148.0 145.8 1.5% 2.2% 0.8%

Colorado 2,810.4 2,804.2 2,751.7 2,765.9 2,713.4 1.9% 3.5% ‐4.5%

United States 151,517 151,169 149,453 150,598 148,208 1.6% 1.9% ‐4.3%

*Includes the Denver‐Aurora‐Lakewood MSA (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties) and the Boulder MSA (Boulder County).

Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary (r) =revised

Metro Denver Industry Cluster Headlines

Aerospace

NASA ordered $4.6 billion in spaceship capsules from Lockheed Martin Space for missions returning U.S. astronauts to

the surface of the moon. The order includes the spacecraft that will be used in the next U.S. moon landing mission

scheduled for 2024. The contract secures three Orion capsules that will be built for the next three Artemis program

flights, with a follow‐up order scheduled in the 2022 fiscal year for the remaining three capsules.

Raytheon plans to exceed hiring expectations of 300 more jobs in the Aurora office, putting that number closer to 400‐

500 additional employees by 2022 or 2023. The Raytheon Intelligence and Information Services division currently

employs over 2,500 people in Aurora and will need to find additional space to accommodate the growing workforce.

The added growth comes after Raytheon merged with United Technologies, a deal which is supposed to close next

year, which will create the nation’s second‐largest military defense contractor. The company is the second‐largest

employer in Aurora.


Energy and Natural Resources – Renewable Resources

Xcel Energy Inc. announced it would complete the Cheyenne Ridge Wind Project by the end of 2020, a 100,000‐acre

site for 229 Vestas wind turbines. The project will be the second‐largest single‐phase wind project in Colorado and will

be constructed by Mortenson Co. Colorado currently ranks eighth in the county for installed wind capacity and

generates more than 17 percent of its electricity from wind power.

According to a report by Advanced Energy Economy, job growth in Colorado’s “advanced energy” industry, which

includes renewable energy, energy efficiency, electrified transportation, and biofuels, is expected to expand by about 9

percent this year, a rise of 5 percentage points from the previous year’s growth of 4 percent, while overall job growth

in the state was 2.4 percent. Nationally, job growth in the industry is expected to rise by 6 percent. In the energy

efficiency sector, which includes jobs such as construction and performing audits, employment grew 7 percent in the

state, compared with 3 percent nationally. Another area Colorado has excelled in is the hybrid, electric, natural gas‐

fueled, and other “advanced” vehicle sector, with 22 percent employment growth in 2018 compared with the national

average of 15 percent.

A separate report by Environmental Entrepreneurs suggested that Colorado’s clean energy industry is expected to grow

by 10.3 percent through 2019, compared with hiring growth of 4.8 percent in 2018. The “2019 Clean Jobs Colorado”

report estimated that the clean power industry employed 59,666 people in Colorado last year, of which more than half

worked in efficient lighting and heating, 7,775 worked for solar companies, and 7,318 worked for wind companies. The

4.8 percent growth in 2018 was twice as much as job growth in every other industry across the state. The expectation

comes amidst climate and clean energy bills passed by Colorado lawmakers and expectations to reduce greenhouse gas

emissions.

Another report by Environmental Entrepreneurs, “Energy Efficiency Jobs in America,” stated the number of Coloradans

working in energy efficiency grew by 7.2 percent in 2018, making up 22 percent of the state’s energy workers. The

report found that energy efficiency is the fastest‐growing segment in the U.S. energy industry and includes jobs such as

manufacturing and installation of high‐efficiency systems, controls, windows and insulation in residential, commercial,

and industrial buildings.

Financial Services – Investments

Charles Schwab plans to cut 600 positions, blaming falling interest rates and increased competition. The cuts will span

all staffing grades and locations across the company, although the impact in Colorado is unclear. Charles Schwab

currently employs 4,500 people at its Lone Tree campus.

Food and Beverage Production

Yasso Inc., the company that makes Yasso Frozen Greek Yogurt bars, plans to move its headquarters from

Massachusetts to Boulder. The company currently employs about 35 people, with half of them already working out of a

temporary office space in Boulder. The new headquarters will be 10,000 square feet at 1050 Walnut St. The company

plans on doubling its workforce over the next two years, hiring in positions including sales, marketing, finance, and

operations.

Healthcare & Wellness

According to the Census Bureau, 8.5 percent of the U.S. population had no health insurance in 2018, up from 7.9

percent the previous year. It was the first increase in those uninsured since the Affordable Care Act passed in 2010. The

Census Bureau figures pointed to declines in Medicaid coverage as a main factor in the uninsured rate. Experts also


pointed to the Trump administration’s efforts to undermine the law, including cutting back on advertising, enrollment

assistance, and programs that helped low‐income people learn about insurance programs.

According to the “2019 Colorado Health Access Survey” by the Colorado Health Institute, Coloradans are struggling to

keep up with medical bills and more describe having behavioral health problems and being unable to get treatment for

them. About 18.1 percent of Coloradans said they had trouble paying their medical bills, up from 14 percent in 2017.

About 6.5 percent of residents in the state did not have any health insurance in 2018, matching the record‐low level

reported in 2017. Of those uninsured, 89.6 percent reported cost as the reason for not being covered.

Employers across the U.S. are the main source for health insurance, covering about 153 million people. But higher

premiums and deductibles are pushing people out of affordable coverage. According to a report by the Kaiser Family

Foundation, the average premium paid by an employer for a family plan is $20,000 a year, with the worker contributing

about $6,000, which does not include co‐payments, deductibles, and other forms of cost‐sharing. Low‐wage workers

who do not qualify for Medicaid are finding it increasingly difficult to afford private insurance and many small

businesses have opted to increase deductibles instead of premiums.

IT‐Software

Snowflake, a Bay Area cloud‐based data warehousing company, plans to add 200 new employees to their office in

Denver by the end of 2020. The company currently employs 80 people in their downtown office on the 15th floor of

the WeWork inside the Wells Fargo Center on 17th Street and Broadway. The Denver office consists mostly of sales‐

focused employees.

Bitly, a tech company that provides custom links and link analytics, opened its new office at 1860 Blake St. The

company has reported steady growth since locating to Denver in 2014, growing from 2 employees in 2014 to seven a

year ago to 19 today, and plans on adding more in the near future. The new office hosts the company’s engineering

and product departments, with room for around 40 employees.

Fivetran, Inc, an Oakland‐based tech company, leased 16,000 square feet at STEAM on the Platte, a new office building

at 1401 Zuni Street in Denver. The company expects to increase its Denver team from 40 employees to more than 150

in the next three years. Fivetran specializes in data access, storage, and specialization and recently partnered with

Google to create a new Data Transfer Service for its BigQuery data analytics platform.

Robinhood, a Northern California fintech firm, is expanding to Denver and planning to add nearly 800 jobs as it sets up

a base for its customer‐experience team. The company allows people to invest in stocks, exchange‐traded funds, and

cryptocurrencies from its app to make trading more accessible. The new office will be its fourth‐largest office location.

Flowhub, a cannabis retail‐tech company, signed a three‐year lease for the entire ground floor (11,200 square feet) at

CommonGrounds at 1890 Wynkoop St. Flowhub develops software for ID verification, point of sale, inventory

management, and retail reporting. Flowhub currently employs 80 people and plans on growing to 120 in the near

future.

Other Industry Headlines

Endeavor Colorado, the state’s wing of an international nonprofit that supports entrepreneurs of companies dedicated

to helping improve their communities, launched at the Denver Startup Week. The organization currently operates in 65

cities serving 35 markets globally and the Endeavor‐backed entrepreneurs have built companies supporting 3 million

jobs. The company provides resources to entrepreneurs looking to scale up operations, including mentors, investors,

and peers.


Gymshark, a UK fitness apparel company, opened its North American headquarters in Denver, setting up a temporary

working space in CTRL Collective in the Dairy Block as they expand their team in Denver and find a more permanent

space for the company. Gymshark currently has a handful of employees working out of the space and expects to

increase to as many as 30 people in the first year and closer to 50 in the next few years.

Fantic USA, an Italian e‐bike maker, is moving its North American headquarters from California to Denver. The new

location will be along East Cherry Creek Drive. The company plans to hire around five workers this year with plans to

continue to grow in the coming years.

San Francisco‐based architecture and design firm Blitz opened an office in Denver at the Ctrl Collective co‐working

space inside the Dairy Block. The company hopes to grow to under 30 people in the next couple of years. The company

has clients that include Google, Microsoft, and Instacart.

New York‐based hospitality company Legends signed a multi‐year agreement to supply food and beverage service at

the Pepsi Center after the contracts for the previous companies expired. The company currently works with the Dallas

Cowboys, Oakland Raiders, Los Angeles Rams, and the New York Yankees. Legends plans to have guest chef nights,

rotating wines of the month, and a hot dim sum cart offered at the Pepsi Center as part of their goal to deliver more

upscale dining options.

Employment Outlook

The Manpower Employment Outlook Survey revealed that 17 percent of employers surveyed in the Denver‐Aurora MSA will hire more employees in the fourth quarter of 2019, a decline of 8 percentage points from the same time last year and 12 percentage points below the level from the previous quarter. This was the weakest hiring outlook reported since the fourth quarter of 2013 when just 15 percent of the employers planned to expand. Construction payrolls are expected to decline, and the outlook for financial activities and transportation & utilities remains unchanged. All other sectors expect some hiring in the October – December period.

The U.S. employment outlook fell slightly, with 22 percent of companies surveyed expecting to hire, a decrease of 5 percentage points from the prior quarter and the same level compared with the prior year.

All 13 industries across the U.S. anticipate increased hiring intentions, with leisure and hospitality (+27 percent), professional and business services (+24 percent), and wholesale and retail trade (+23 percent) anticipating the largest workforce gains.


Employment Outlook Survey

Quarter 4 Quarter 3 Quarter 4 YTD YTD Ann Avg Ann Avg

2019 2019 2018 2019 2018 2014 2009

Denver‐Aurora‐Broomfield MSA Percent of Companies Hiring 17% 29% 25% 26% 27% 21% 11%

Percent of Companies Laying Off 4% 1% 7% 3% 4% 6% 12%

Percent of Companies No Change 79% 68% 68% 71% 67% 71% 74%

Percent of Companies Unsure 0% 2% 0% 1% 2% 2% 3%

United States

Percent of Companies Hiring 22% 27% 22% 24% 23% 19% 15%

Percent of Companies Laying Off 5% 3% 5% 4% 4% 6% 14%

Percent of Companies No Change 72% 69% 71% 71% 72% 72% 68%

Percent of Companies Unsure 1% 1% 2% 1% 2% 3% 5%

Source: Manpower Inc.

Unemployment

Unemployment in Metro Denver fell 0.1 percentage points between July and August. Over‐the‐year, unemployment fell 0.7 percentage points to 2.6 percent unemployment.

All seven counties in Metro Denver reported over‐the‐year decreases in the unemployment rate. Denver County reported the smallest decline, falling 0.6 percentage points, while the six other counties all fell 0.7 percentage points. In August, Boulder, Douglas, and Broomfield Counties reported the lowest unemployment rate of 2.4 percent, while Adams County reported the highest rate of 2.8 percent unemployment.

Labor Force Statistics (000s, not seasonally adjusted civilian labor force)

Aug 2019 (p) 2019 YTD AVG 2018 YTD AVG 2014 2009

Total Labor

Force Unemploy‐ment Rate

Total Labor Force

Unemploy‐ment Rate

Total Labor Force

Unemploy‐ment Rate

Ann AvgUnemploy‐ment Rate

Ann Avg Unemploy‐ment Rate

Metro Denver 1,853.5 2.6% 1,833.5 2.9% 1,796.0 3.0% 4.7% 7.3%

Adams County 276.9 2.8% 273.9 3.3% 268.6 3.4% 5.7% 8.5%

Arapahoe County 372.9 2.7% 368.3 3.0% 361.1 3.1% 4.9% 7.3%

Boulder County 198.1 2.4% 198.0 2.6% 192.5 2.8% 4.1% 6.1%

Broomfield County 40.9 2.4% 40.4 2.7% 39.6 2.8% 4.2% 6.9%

Denver County 424.5 2.7% 419.4 3.0% 411.0 3.1% 4.8% 8.1%

Douglas County 196.7 2.4% 194.1 2.6% 190.4 2.7% 4.0% 6.2%

Jefferson County 343.6 2.5% 339.5 2.8% 332.8 2.9% 4.6% 7.1%

Colorado 3,176.2 2.7% 3,146.6 3.1% 3,078.4 3.2% 5.0% 7.3%

United States 164,019 3.8% 163,194 3.8% 161,881 4.1% 6.2% 9.3%

Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary


Metro Denver added 35,003 people either employed or looking for work between August 2018 and 2019. The labor force rose across all seven counties, led by Denver County (+2.1 percent). Adams, Broomfield, and Jefferson Counties all reported increases of 2 percent. Boulder County reported the slowest growth, rising by 1.5 percent over‐the‐year.

Colorado reported an unemployment rate of 2.7 percent, falling by 0.7 percentage points from the same time last year. Colorado added 61,564 people to the labor force from August 2018 to 2019, an increase of 2 percent. The national unemployment rate was 3.8 percent, a fall of 0.1 percentage points from August 2018 and a fall of 0.2 percentage points from the previous month.

Weekly First‐Time Unemployment Insurance Claims

Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg2009 Aug‐19 Jul‐19 Aug‐18 2019 2018 % Change 2014

Metro Denver 893 899 888 1,007 975 3.3% 1,415 2,541

Colorado 1,635 1,699 1,585 1,900 1,874 1.4% 2,657 4,752

Note: Reference week data includes the 19th day of the month for all months except November and December, which include the 12th day of the month. Source: Colorado Department of Labor and Employment, Labor Market Information.

Between July and August, initial unemployment insurance claims in Metro Denver decreased 0.7 percent. The level in August was 0.6 percent higher than the same time last year. The average year‐to‐date total claims in Metro Denver increased 3.3 percent, the eighth consecutive month of increasing year‐to‐date monthly claims.

Colorado reported a 3.8 percent decrease in initial claims between July and August and a 3.2 percent increase over‐the‐year to 1,635 total claims. Year‐to‐date average monthly claims rose 1.4 percent, the third consecutive month of increasing average monthly claims.

Consumer Sector

Sentiment & Spending

The Consumer Confidence Index for the U.S. fell in September, down 6.8 percent from the previous month and down 7.5 percent from the same time last year. The Present Situation Index fell 7 points to 169, while the Expectations Index fell 10.6 points to 95.8 in September.

Analysts at The Conference Board stated that consumers were less optimistic about the short‐term outlook in September, with decreases in the outlook for the labor market and expectations of business conditions. Consumers were also less positive in their assessment of current conditions. The escalation in trade and tariff tensions in late August appeared to have rattled consumers, and the continued uncertainty could begin to diminish consumers’ confidence in the future.

Colorado is included in the Mountain Region Index and the area reported a 9.2 percent decrease in consumer confidence between August and September and a 14.3 percent decrease over‐the‐year. The Present Situation Index fell 1.7 percent over‐the‐month to 182.6, while the Expectations Index fell 17.3 percent to 95.9.


Consumer Confidence Index

Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg Sep‐19 Aug‐19 Sep‐18 2019 2018 % Change 2014 2009

Mountain 130.6 143.9 152.4 135.1 132.9 1.6% 89.2 49.7

United States 125.1 134.2 135.3 128.6 129.0 ‐0.3% 86.9 45.2

Source: The Conference Board. (p) = preliminary (r) = revised

National retail sales increased between June and July, with total retail sales rising 2.9 percent from the previous month. Ten of the 13 supersectors reported over‐the‐month increases in sales, with the largest increases in non‐store retailers (+8.2 percent), motor vehicles and parts dealers (+4.3 percent), and furniture and home furnishing stores (+4.3 percent). Sporting goods, hobby, book and music stores reported the largest decline, falling 1 percent over‐the‐month, followed by general merchandise stores (‐0.6 percent). The food services and drinking places supersector reported no growth during the period. National retail sales beat economist’s expectations, with consumer spending looking strong amidst heightened uncertainty and deteriorating confidence in the face of trade tensions.

Retail sales activity increased 4.9 percent over‐the‐year, with 11 of the 13 supersectors reporting increases. Non‐store retailers reported the largest over‐the‐year increase of 17.7 percent, followed by miscellaneous store retailers (+9.1 percent) and motor vehicles and parts dealers (+6.2 percent). Electronics and appliance stores reported the largest over‐the‐year decrease of 2.2 percent, followed by clothing and clothing accessories stores (‐0.5 percent).

National Retail Sales ($millions)

Source: U.S. Census Bureau.

Price Changes

The U.S. Consumer Price Index (CPI) rose 1.7 percent over‐the‐year to 256.6 in August. Seven of the eight components increased during the period, with the greatest increases in medical care (+3.5 percent), housing (+2.8 percent), and other goods and services (+2.3 percent). Transportation reported the only decrease in prices, falling by 1.1 percent over‐the‐year. CPI remained constant compared with the previous month.

The CPI for the Denver‐Aurora‐Lakewood area rose 2.1 percent, with seven of the eight components increasing between July of 2018 and 2019. The medical care component reported the largest increase (+3.1 percent), followed by housing (+2.9 percent) and other goods and services (+2.6 percent). Apparel reported the only decrease, falling by 1 percent during the period.

Month of Month of Month of YTD Total YTD Total YTD Total Annual Growth

Annual Growth

Jul. 2019 Jun. 2019 Jul. 2018 2019 2018 % Change 2014 2009

Total Retail Sales 533,058 517,984 508,010 3,530,495 3,423,402 3.1% 4.3% ‐7.4%

Motor Vehicles 110,373 105,818 103,894 722,862 703,066 2.8% 6.4% ‐14.5%

Furniture and Home 9,872 9,461 9,700 65,364 65,715 ‐0.5% 4.6% ‐14.2%

Electronics & Appliance 7,739 7,542 7,914 52,402 54,760 ‐4.3% 0.5% ‐9.5%

Building Materials 34,370 34,133 34,099 223,472 222,167 0.6% 5.5% ‐13.3%

Food and Beverage 66,974 64,768 63,862 445,889 433,236 2.9% 4.4% ‐0.2%

Health and Personal Care 29,320 28,602 27,934 204,354 196,449 4.0% 6.2% 2.5%

Gasoline Stations 46,412 44,841 46,327 296,128 294,162 0.7% ‐2.0% ‐22.3%

Clothing & Accessories 21,818 21,123 21,919 144,375 144,758 ‐0.3% 2.3% ‐5.2%

Sporting Goods 6,343 6,405 6,219 41,847 44,132 ‐5.2% 1.0% ‐4.1%

General Merchandise 58,046 58,422 57,145 394,443 388,039 1.7% 2.3% ‐1.0%

Miscellaneous Store 11,603 11,503 10,638 75,029 74,012 1.4% 3.1% ‐8.1%

Non‐Store Retailers 63,959 59,115 54,326 419,492 375,462 11.7% 8.7% ‐2.5%

Food Service & Drinking 66,229 66,251 64,033 444,838 427,444 4.1% 6.1% ‐0.9%


According to the AAA Daily Fuel Gauge Report, the national average fuel price for September increased 2.9 percent from August to $2.65 per gallon. The average fuel price decreased 7.7 percent over‐the‐year. The Metro Denver average fuel price increased 8.4 percent over‐the‐month to $2.65 and decreased 8.9 percent over‐the‐year from $2.90, down $0.26 from September last year.

Stock Market

All four stock market indices increased between August and September. The DJIA reported the largest over‐the‐month increase at 1.9 percent, followed by the S&P 500 (+1.7 percent), Bloomberg Colorado (+0.8 percent), and NASDAQ (+0.5 percent). The Bloomberg Colorado index reported the largest over‐the‐year increase of 9 percent, followed by the S&P 500 (+2.2 percent) and the DJIA (+1.7 percent). NASDAQ reported the only over‐the‐year decrease, falling by 1.1 percent.

Stock Market Indexes

Month of Month of Month of YTD Return YTD Return Ann Avg Return

Ann Avg Return

Sep‐19 Aug‐19 Sep‐18 2019 2018 2014 2009

Bloomberg Colorado 584.0 579.1 535.7 26.8% 7.7% ‐1.6% 46.2%

S&P 500 2,976.7 2,926.5 2,914.0 18.7% 8.4% 11.4% 23.5%

NASDAQ 7,999.3 7,962.9 8,091.5 20.6% 17.2% 13.2% 43.9%

DJIA (Dow Jones) 26,916.8 26,403.3 26,458.3 15.4% 6.5% 7.6% 18.8%

Sources: Bloomberg.com; Yahoo! Finance.

Travel & Tourism

The average hotel occupancy rate in Metro Denver decreased 3.4 percentage points from the previous month, falling to 85.7 percent occupancy in the month of August. Over‐the‐year, occupancy rose 0.5 percentage points. The average hotel room rate rose 1.4 percent over‐the‐year to $158.27 per night, an increase of $2.13 during the period. This was a 4.1 percent decrease from the previous month.

Metro Denver Hotel Statistics

Month of Month of Month of YTD Avg YTD Avg YTD Avg Annual Annual

Aug‐19 Jul‐19 Aug‐18 2019 2018 % Change 2014 2009

Percent of Hotel Rooms Occupied 85.7% 89.1% 85.2% 76.5% 75.9% 0.6% 75.8% 59.0%

Average Hotel Room Rate $158.27 $165.05 $156.14 $147.28 $145.39 1.3% $124.37 $106.85

Source: Rocky Mountain Lodging Report.

Spokespeople for Denver International Airport (DEN) reported that over 6.7 million passengers passed through the airport in July, an increase of 10 percent from the previous year, or an additional 614,122 passengers. This was the record for most passengers in a month in airport history. In addition, the level in July was 5.4 percent higher than the previous month.

DEN ranked among the top U.S. airports in a new study by airline data company OAG. DEN ranked No. 5 out of the top

25 U.S. domestic aviation markets with a “domestic connectivity index” of 194, a metric of the ratio of possible

scheduled connections to the number of destinations served by that airport.

Denver International Airport Passengers

Month of Month of Month of YTD Total YTD Total YTD Total Annual Annual

Jul‐19 Jun‐19 Jul‐18 2019 2018 % Change 2014 2009

Number of Airline Passengers 6,733,272 6,386,920 6,119,150 39,437,981 36,941,935 6.8% 53,472,514 50,167,485

Source: Denver International Airport, Traffic Statistics.


Residential Real Estate

The last major housing development in Parker has broken ground. The project will span 2,500 acres, adding nearly

7,000 residential units in the next few years near Crowfoot Valley Road for the Trails at Crowfoot development. The

project will consist of three developments. The Trails at Crowfoot will include 890 residential units, the Looking Glass

will have 2,490 units, and Anthology North will have 3,305 and at least 27 acres of commercial space. Residents are

expected to be able to move into the Trails at Crowfoot as early as January, with the other developments opening in

late 2020 and early 2021.

Oread Capital and Development LLC is planning a mixed‐use retail and residential development on a 150‐acre plot of

land at Federal Boulevard and W. 84th Avenue. Plans submitted to Westminster show as many as 2,350 homes in the

project referred to as Rose Hill. The plans are awaiting approval by the Westminster City Council.

The City of Lafayette approved plans for a new housing project at the southwest corner of Emma and 120th St. The

proposal calls for 400 homes, including 30 duplexes, 130 townhomes, 120 multi‐family, and 120 senior multi‐family

units, as well as 5,000‐6,000 square feet of community space. The Willoughby Corner project by the Boulder County

Housing Authority will help Lafayette reach its goal to have 12 percent of the city’s housing units permanently

affordable.

The Dinerstein Cos. plans to build 372 multi‐family apartments across seven three‐story buildings in the heart of

Longmont’s South Main Station development at the intersection of First Avenue and Main Street. The apartments will

be part of a larger mixed‐use project that will include both residential and commercial components. The project is

expected to take about two years to complete.

Flywheel Capital moved forward with plans to develop a 5.8‐acre city block at the I‐25/Evans Avenue interchange. The

developer plans to build a five‐story apartment complex which would have 361 apartments, 36 of which would be

income‐restricted. The company also plans to build a half‐acre “pocket park”, with 1.27 acres left for additional

development in the future.

Opus Development Co. submitted a site‐development plan to construct a 12‐story apartment complex north of Broncos

Stadium at Mile High that would have 277 units at 550 W. 19th Ave. The 1.65‐acre site is currently a gravel parking lot

owned by 19th and Clay LLC.

Washington‐based Holland Partner Group submitted an early‐stage development proposal calling for a 203‐unit project

at the southern end of the 1000 blocks of Santa Fe Drive and Inca Street. The proposal includes two five‐story buildings,

an 83‐unit western building with ground‐floor retail space and a 120‐unit eastern building. The company currently

owns 15 apartment complexes in the Denver area.

Nichols Partnership bought the former Art Institute building at 1200 Lincoln St. with plans to renovate the building into

155 microunits ranging from 300‐425 square feet each. The company was responsible for Turntable Studios near Mile

High Stadium and Cruise, a former medical office building near City Park.

Denver‐based ULC and Atlanta‐based Columbia Ventures submitted plans to build 150 income‐restricted residential

units and clinic and retail space at 4800 N. Vine St. The 2.5‐acre site would include 7,000 square feet of retail space and

24,000 square feet of clinic space used by Clinica Tepeyac, a safety net clinic.

The Quality Inn & Suites at E. 36th Ave. and Quebec St. will be converted into 139 micro‐affordable housing units in

Denver’s Park Hill neighborhood. The rooms are generally move‐in ready pending updating kitchens and a new

sprinkler system. The project proposed by the Colorado Coalition for the Homeless will attempt to curb Denver’s

increasing homeless population.


Boulder Housing Partners got approval to move forward with an affordable housing redevelopment effort at 2360 30th

St. in Boulder. The project, called 30Pearl, will include 120 units of permanently affordable rental housing mixed with

market rate housing, below market commercial space, and public benefits such as public art and a park.

Mill Creek Residential, a Dallas‐based multifamily developer, plans on developing 0.75 acres at 180 Madison St. in

Cherry Creek into a five‐story, 100‐unit apartment complex. The company currently operates numerous “Modera”

complexes in neighborhoods including LoHi, RiNo, Cap Hill, and Ballpark.

Crossing Pointe North, a multi‐generational community living development, will open the senior portion of the

development in October and will start constructing the larger section in the next three years at 104th and Colorado

Boulevard in Thornton. The 64‐unit senior housing section will feature one‐ and two‐bedroom apartments for low‐

income senior residents.

The Hospice of Saint John, once a hospice facility that opened in 1977 in Lakewood and shut down in 2013, will be

developed into an affordable housing facility for seniors within the next year. The new development will be called Eiber

Village at Garrison Station and will include 49 units. Everett Court Partners and Hartman Ely Investors will redevelop

the historic site.

Chicago‐based developer CA Ventures bought a 0.89‐acre plot of land at 2980 Huron St. and plans on building a 13‐

story apartment building. The land currently has a 31,875‐square‐foot warehouse on it.

McWhinney plans to purchase 2.4 acres of land at 35th Street and Brighton Boulevard next to Great Divide Brewing

Co.’s Barrel Bar. The plans call for some kind of mixed‐used, multi‐family project to break ground in the first half of

2020.

Home Resales

Metro Denver

Home sales in Metro Denver decreased 12.9 percent between July and August and increased 21.3 percent over‐the‐year. The decline in sales is happening despite 30‐year mortgage rates that are at 3.49 percent, the lowest rate since October 2016 according to Freddie Mac and the Denver Metro Association of Realtors “Market Trends Report”. The report cites economic uncertainty not bringing buyers back into the market.

Unsold homes on the market were 0.1 percent lower in August than in July but 13.6 percent higher compared with August 2018. There were 1,122 more unsold homes on the market in August 2019 compared with the same time last year.

The average sales price for single‐family homes increased 3.5 percent over‐the‐year to $518,415, an increase of $17,588 from the previous year but 3.6 percent lower compared with the previous month. The average sales price for condominiums increased 5 percent over‐the‐year to $315,427 and increased 1.7 percent from the previous month.

Previously‐Owned Home Sales Activity

Month of Month of Month of YTD Total YTD Total YTD Total Ann Total Ann Total


Home Sales (Closed) 5,378 6,173 4,433 38,724 36,984 4.7% 54,068 42,070

Unsold Homes on Market 9,350 9,359 8,228 9,350 8,228 13.6% 6,744 19,762

Average Sales Price‐Single Family $518,415 $537,762 $500,828 $520,384 $510,542 1.9% $363,604 $264,803

Average Sales Price‐Condo $315,427 $310,061 $300,471 $311,605 $300,145 3.8% $224,997 $159,628

Median Sales Price‐Single Family $441,200 $453,000 $428,000 $306,000 $219,000

Median Sales Price‐Condo $280,000 $284,950 $270,000 $180,000 $135,000

Source: Colorado Comps LLC; Denver Metro Association of Realtors; REcolorado.


National

According to the National Association of Realtors (NAR), total existing‐home sales rose 1.3 percent from July to a seasonally adjusted annual rate of 5.49 million in August, with three of the four major U.S. regions reporting increases in sales. Sales increased 2.6 percent nationally over‐the‐year from 5.35 million in August 2018.

Total housing inventory at the end of August decreased to 1.86 million, down from 1.90 million in the previous month and down 2.6 percent from 1.91 a year ago. Unsold inventory is at a 4.1‐month supply, down from 4.2 months in July and from the 4.3‐month figure recorded in August 2019.

Properties remained on the market for 31 days in August, up from 29 days in July and in August of 2018. Of the homes sold in August, 49 percent were on the market for less than a month.

Home Prices

NAR data showed that the median existing‐home price for all housing types was $278,200 in August, up 4.7 percent from August 2018. This price increase marked the 90th straight month of year‐over‐year gains. The median price in the Northeast region decreased 0.3 percent over‐the‐year to $303,500. In the Midwest, home prices reached $220,000, an increase of 6.6 percent. The median price in the South increased 5.4 percent over‐the‐year to $240,300, while prices in the West increased 5.7 percent to $415,900.

A separate NAR report revealed that the median price in the Boulder MSA decreased over‐the‐year by 0.9 percent in the second quarter of 2019, falling to $625,300. The Denver‐Aurora MSA rose 1.8 percent over‐the‐year to a median home price of $471,400 during 2Q 2019.

The national median sales price during the second quarter of 2019 increased 9.7 percent over‐the‐quarter to $279,600. Over‐the‐year, the median sales price increased 4.3 percent.

Median Sales Price of Existing Single‐Family Homes ($000s)

Quarter 2 Quarter 1 Quarter 2 YTD Avg YTD Avg YTD Avg Median Median

2019 (p) 2019 (r) 2018 2019 2018 % Change 2014 2009

Boulder MSA $625.3 $603.6 $631.1 $614.5 $609.8 0.8% $390.7 $345.5

Denver‐Aurora MSA $471.4 $446.6 $462.9 $459.0 $452.2 1.5% $310.2 $219.9

United States $279.6 $254.9 $268.0 $267.3 $256.7 4.1% $208.9 $172.1

Source: National Association of REALTORS. (p) =preliminary (r) =revised

Of the 178 MSAs included in the second quarter 2019 report, the Boulder MSA reported the sixth‐highest median price, while the Denver‐Aurora MSA median price was the 11th‐highest.


According to the S&P/Case‐Shiller home price index, Denver housing prices appreciated slightly in July, rising 0.05 percent over‐the‐month to 223.78. Housing prices increased 3.1 percent over‐the‐year, down from the over‐the‐year growth rate reported from the previous month of 3.4 percent. National housing prices increased 3.2 percent over‐the‐year to 211.72, the same over‐the‐year growth rate that was reported in June.

Phoenix reported the largest over‐the‐year growth rate of 5.8 percent, followed by Las Vegas (+4.7 percent), and Charlotte (+4.6 percent). Denver ranked No. 10 out of the 20 cities in over‐the‐year growth for the third straight month.

Seattle reported the only decrease in home prices, falling by 0.6 percent over‐the‐year, which was 0.8 percentage points higher than the previous months’ negative growth rate of 1.4 percent, and marks the fourth consecutive month of over‐the‐year decreases in home prices in the area. San Francisco (+0.2 percent) and New York (+0.9 percent) reported the slowest positive growth.

Foreclosures

Foreclosures in Metro Denver increased 0.4 percent between August of 2018 and 2019, rising by just 1 home foreclosed on during the period. Four of the seven counties reported increases in foreclosures compared with last year. Boulder County reported the largest percentage increase, rising by 42.9 percent, or 3 homes, over‐the‐year. Arapahoe County reported the largest absolute increase in filings, rising by 13 homes, or 24.1 percent, during the period. Broomfield County had the largest decrease in foreclosure filings, falling by 60 percent to 2 filings in the month of August, followed by Douglas County which fell by 17 filings over‐the‐year to 13 in the month of August, a decrease of 56.7 percent.

Between July and August, Jefferson County (+53.6 percent), Denver County (+35 percent), and Arapahoe County (+34 percent) reported the largest increases in foreclosures. Broomfield County fell 60 percent, the largest decrease, followed by Douglas County which fell 27.8 percent. Across Metro Denver, foreclosure filings rose 16.5 percent over‐the‐month to 240 total filings in August.

Real Estate Foreclosures

Month of Month of Month of YTD Total YTD Total YTD Total Annual Total Annual Total


Total Metro Denver* 240 206 239 1,842 1,837 0.3% 5,328 26,434 Adams County 51 56 56 419 407 2.9% 1,200 5,646 Arapahoe County 67 50 54 461 447 3.1% 1,314 6,243 Boulder County 10 9 7 99 87 13.8% 253 1,382 Broomfield County 2 5 5 34 32 6.3% 59 315 Denver County 54 40 48 375 368 1.9% 1,087 6,141 Douglas County 13 18 30 171 182 ‐6.0% 437 2,680 Jefferson County 43 28 39 283 314 ‐9.9% 978 4,027

*The total number of election and demand setups (initial filings) received by county public trustees. Filings may be subsequently cured or withdrawn. Sources: County public trustees.


Nationally, foreclosures in August sank to their lowest level in more than 18 years, according to the latest First Look report from Black Knight. The number of loans in active foreclosures also reached its lowest level since 2005.

New Home Sales

Single‐family home sales in August were at a seasonally adjusted annual rate of 713,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. This represented a 7.1 percent increase from the revised July estimate of 666,000.

Home sales increased 18 percent over‐the‐year, with increases in the South and West regions of 24.9 percent and 17.9 percent, respectively, and a decline in home sales in the Midwest of 7.2 percent over‐the‐year. The Northeast region reported no change.

New Home Construction National

Builder confidence for newly‐built single‐family homes reached a yearly high of 68 in September, up from the previous month’s level of 67, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Sentiment levels have held in the mid‐ to upper 60s since May and this was the highest level since last October. Low interest rates and solid demand for homes fueled the slight increase in confidence, despite supply‐side challenges. Mortgage rates remain low, although increasing uncertainty brought on by the ongoing trade dispute has slowed manufacturing and home construction in some parts of the nation.

According to the Census Bureau, the seasonally adjusted annual number of nationwide residential building permits increased 8.2 percent from the previous month to over 1.4 million permits, an increase of 14.1 percent over‐the‐year.

Single‐family detached building permits across the U.S. reported an over‐the‐month increase of 5.5 percent and an over‐the‐year increase of 5.8 percent to 875,000 total permits in August.

Single‐family attached units decreased 6.7 percent from the previous month but increased 20 percent from the previous year to 42,000 permits. Multi‐family units reported an increase of 14.7 percent from the previous month and 31.3 percent from the previous year, rising to 508,000 total permits in August.

Three of the four regions reported over‐the‐month increases in total permits. The Northeast region rose 27.7 percent, followed by the Midwest (+13.3 percent), and the South (+11.9 percent). The West fell 7.5 percent over‐the‐month. The Northeast region reported the highest over‐the‐year increase of 49 percent to 152,000 permits, followed by the South region (+16 percent), and the West (+8.1 percent). The Midwest region fell 1.6 percent over‐the‐year.


Metro Denver

Residential building permits in Metro Denver totaled 1,598 permits in August, a decrease of 9.2 percent, or 161 permits, from the same time last year.

Single‐family detached units reported an increase of 33.3 percent, or 314 permits, over‐the‐year. Single‐family attached units fell from 127 permits in August 2018 to 30 this month, a fall of 76.4 percent. Multi‐family permits decreased 54.9 percent over‐the‐year to 310 permits in August.

The number of residential units permitted in Metro Denver decreased 10.6 percent, or by 189 permits, from July to August. Single‐family detached permits rose 18.8 percent from the previous month, an addition of 199 permits, while single‐family attached units rose from 8 permits in July to 30 permits in August.

Residential Building Permits

Month of Month of Month of YTD Total YTD Total YTD Total Total Total


Single‐Family Detached Units 1,258 1,059 944 7,761 8,540 ‐9.1% 7,396 4,037Single‐Family Attached Units 30 8 127 143 329 ‐56.5% 399 224Multi‐Family Units 310 720 688 5,168 6,274 ‐17.6% 9,145 5,296Total Units 1,598 1,787 1,759 13,072 15,143 ‐13.7% 16,940 9,557

Source: U.S. Census Bureau.

Apartment Rental Market

The apartment vacancy rate throughout Metro Denver fell 0.4 percentage points between the first quarter and second quarter of 2019. Over‐the‐year, the rate decreased 1 percentage point to 5 percent vacancy. Vacancy rates ranged from 3.6 percent in the Boulder/Broomfield submarket to a high of 7.6 percent in Douglas County.

The average monthly rental rate of apartments in Metro Denver increased 2.6 percent over‐the‐quarter to $1,520. All six submarkets reported over‐the‐quarter increases in the rental rate, led by Denver County (+5 percent) and the Boulder/Broomfield submarket (+4 percent). The Boulder/Broomfield submarket reported the highest rate, averaging $1,680 per month. All counties also reported over‐the‐year increases, led by Denver County (+3.2 percent), and followed by Jefferson County (+3.1 percent) and Arapahoe County (+2.5 percent). The Metro Denver rental rate increased 2.4 percent over‐the‐year, marking the slowest increase for a second quarter since 2011 as supply and demand remain balanced and vacancy rates remain low.

Apartment Statistics

Quarter 2 Quarter 1 Quarter 2

YTD Average

YTD Average

YTD Average Ann Avg Ann Avg

2019 2019 2018 2019 2018 % Change 2014 2009

Apartment Vacancy Rate 5.0% 5.4% 6.0% 5.2% 6.1% ‐0.9% 4.6% 8.1%

Average Monthly Rental Rate (all units) $1,520 $1,481 $1,484 $1,500 $1,452 3.3% $1,126 $877

Source: Denver Metro Apartment Vacancy and Rent Survey.

Commercial Real Estate

Endeavor Real Estate Group plans on constructing a 10‐acre mixed use development at Broadway Station, called “Gates

District at Broadway Station”. Plans call for 887 residential units, 380,000 square feet of office space, and 180,000

square feet of retail and restaurant space across a five‐building layout. The first phase of construction will start in the


second quarter of 2020 and consists of two buildings totaling 46,000 square feet of retail, 170,000 square feet of office

space, and 290 residential units. Construction is expected to last about two years.

Stonebridge, a Denver‐based hospitality firm, submitted plans to build an 18‐story mixed‐use project at Belleview

Station that would replace the company’s existing Economy Suites DTC hotel at 4885 S. Quebec St. The plans include

retail and restaurant space on the ground floor, conference rooms and amenities on the second floor, 5 floors with 236

hotel rooms totaling 145,651 square feet, and 11 stories of office space totaling 355,419 square feet. City Council

approved the request to rezone the land for the project in January.

Denver City Council approved a development plan for Loretto Heights located at 3001 S. Federal Blvd. While no

specifics are mentioned in the plan, it offers a development blueprint for turning the Loretto Heights campus and

surrounding area into a live‐work‐play community. The plan ensures the legacy of Loretto Heights is preserved while

offering affordable housing and new development in the area.

Gensler, a San Francisco‐based architectural firm, submitted plans for a 10‐story office building at the intersection of

31st Street and Brighton Boulevard in Denver’s RiNo district for an unspecified developer. The proposal calls for a

554,280‐square‐foot office building with ground floor retail.

A 14‐story hotel was proposed to the City of Denver at 270 14th St. The 0.24‐acre parcel of land was originally expected

to be a micro‐unit apartment complex. Urban Villages and Larimer Associates purchased the property in August 2017

and just submitted the plans for the hotel with no specifics on number of rooms or the brand.

Alliance Investments submitted an early‐stage development proposal for a 12‐story hotel at 3660 Brighton Blvd in the

RiNo district. The 0.43‐acre site is currently home to a 10,000‐square‐foot industrial warehouse. The plans submitted

call for 168 rooms and a rooftop deck.

Life House, a millennial‐focused chain of hotels, plans to open in the Lower Highlands neighborhood in the first quarter

of 2020. The brand specializes in more accessible hospitality aimed at travelers with lower disposable incomes and

includes luxury bunk bed options and community‐oriented amenities. The hotel will be at 3638 Navajo St. and include

17 rooms.

Office Market

Denver ranked as the seventh‐largest flexible office space market in the U.S., according to a new report by CBRE. The

flexible office space market has increased 37 percent from a year ago to 2.8 million square feet, accounting for 2.4

percent of Denver’s total office inventory. That is 0.6 percentage points higher than the level a year ago and above the

U.S. average of 1.8 percent.

The office market in Metro Denver reported decreasing vacancy rates and increasing lease rates between the third

quarters of 2018 and 2019. The direct vacancy rate fell 0.4 percentage points from the previous year to 9.1 percent

vacancy. The average lease rate increased 1.8 percent, or by $0.49, to $27.09 per square foot.

Office construction in Metro Denver slowed compared with the last year. In Q3 2019, 1.34 million square feet of space

was completed across 23 buildings, compared with 2.95 million square feet of space completed across 25 buildings in

the third quarter of 2018. The largest building completed was The Hub (279,317 square feet), a Class A office building

located in RiNo.

There was over 3.21 million square feet of space across 36 buildings under construction at the end of the third quarter

of 2019. This was a 26.4 percent decrease over‐the‐year from the previous year, which reported 4.4 million square feet

of space under construction in the third quarter of 2018. The largest project under construction was the Block 162

Tower, which will be adding 566,050 square feet of office space in downtown Denver.


Office Market Statistics

Quarter 3 Quarter 2 Quarter 3 Quarter 3 Quarter 3 Quarter 3

2019 2019 2018 2017 2016 2015

Number of Buildings 6,439 6,432 6,406 6,361 6,325 6,283

Existing Square Feet (millions) 194.4 194.0 191.7 187.9 184.9 182.9

Vacant Square Feet (direct, millions) 17.6 17.4 18.3 18.3 16.8 17.6

Vacancy Rate (direct) 9.1% 8.9% 9.5% 9.8% 9.1% 9.6%

Vacancy Rate (with sublet) 9.9% 9.7% 10.3% 10.5% 9.8% 10.2%

Avg. Lease Rate (direct, per sq. foot, full service) $27.09 $26.94 $26.60 $26.22 $25.39 $24.30New Construction Completed (year‐to‐date) 1.34 MSF,

23 Bldgs0.85 MSF, 16 Bldgs

2.95 MSF, 25 Bldgs

2.42 MSF, 26 Bldgs

0.98 MSF, 23 Bldgs

1.34 MSF, 18 Bldgs

Currently Under Construction 3.21 MSF, 36 Bldgs

3.11 MSF, 36 Bldgs

4.36 MSF, 45 Bldgs

5.49 MSF, 51 Bldgs

4.84 MSF, 36 Bdgs

2.83 MSF, 29 Bldgs

Source: CoStar Realty Information, Inc. MSF=Million Square Feet

Industrial & Flex Market

Costar reported that the average lease rate for the industrial market increased 7.3 percent between the third quarters

of 2018 and 2019, rising by $0.57 to $8.41 per square foot. The direct vacancy rate increased 1 percentage point to 5

percent vacancy during the period.

There was 5.44 million square feet of industrial space completed across 38 buildings at the end of the third quarter of

2019, a record amount of space added in any previous third quarter. Major completed projects included the First

Aurora Commerce Center (555,840 square feet) and Nexus at DIA (540,931 square feet). Adams County accounted for

over 4.1 million square feet of the recently completed space, representing 76.3 percent of the recently completed

square feet.

There was 3.89 million square feet across 30 buildings under construction in the third quarter of 2019. The largest

project under construction was the Karcher North America building in Adams County, contributing 380,000 square feet

of space to the market.

Industrial Market Statistics


2019 2019 2018 2017 2016 2015






Avg. Lease Rate (direct, per square foot, NNN) $8.41 $8.05 $7.84 $7.60 $7.26 $6.77New Construction Completed (year‐to‐date) 5.44 MSF,


2.39 MSF, 26 Bldgs

2.41 MSF, 30 Bldgs

2.71 MSF, 19 Bldgs

1.24 MSF, 4 Bldgs


4.31 MSF, 33 Bldgs

6.71 MSF, 33 Bldgs

6.94 MSF, 33 Bldgs

3.82 MSF, 34 Bldgs

1.57 MSF, 8 Bldgs


The direct vacancy rate in the Metro Denver flex market fell 0.3 percentage points over‐the‐year to 5.4 percent

vacancy. The average lease rate increased 5.3 percent, or $0.64, to $12.69 per square foot.


There was 243,584 square feet of flex space completed across 8 buildings as of the third quarter of 2019. A flex building

at 5770 McIntyre St. in Golden added 104,380 square feet of space to the market in Jefferson County. There was

606,966 square feet across 6 buildings under construction in the third quarter of 2019, with the largest project being

the J.P. Morgan Chase Data Center which will add 250,000 square feet of flex space to Arapahoe County.

Flex Space Statistics


2019 2019 2018 2017 2016 2015






Avg. Lease Rate (direct, per square foot, NNN) $12.69 $12.05 $12.05 $11.89 $10.95 $10.48New Construction Completed (year‐to‐date) 0.24 MSF,

8 Bldgs0.09 MSF,

4 Bldgs0.35 MSF,


0.13 MSF, 4 Bldgs

0.33 MSF, 3 Bldgs


0.44 MSF, 8 Bldgs

1.22 MSF, 13 Bldgs

0.34 MSF, 7 Bldgs

0.36 MSF, 7 Bldgs

0 MSF, 0 Bldg


Retail Market

The Metro Denver retail market reported a decrease in the average lease rate of 2.4 percent, down $0.45 to $18.52 per square foot in the third quarter of 2019. The direct vacancy rate increased 0.3 percentage points to 4.4 percent across the 12,599 buildings in the retail sector.

There were 60 buildings and 510,553 square feet completed in Metro Denver as of the third quarter of 2019. The largest projects completed were Summit Thornton in Adams County (49,980 square feet) and Emich Volkswagen in the City and County of Denver (45,000 square feet).

There was 1.62 million square feet of retail space across 78 buildings under construction during the third quarter of 2019. The largest project was a building at the northeast corner of 104th Avenue & Chambers Rd. in Commerce City, adding 313,632 square feet of retail space to Adams County. The City and County of Denver had the most retail development under construction, accounting for 22 of the 78 buildings and 31.7 percent of the retail space.

Retail Market Statistics


2019 2019 2018 2017 2016 2015






Avg. Lease Rate (direct, per square foot, NNN) $18.52 $18.94 $18.97 $18.11 $16.29 $15.63 New Construction Completed (year‐to‐date) 0.51 MSF,


0.84 MSF, 78 Bldgs

1.20 MSF, 74 Bldgs

0.93 MSF, 63 Bldgs

0.54 MSF, 32 Bldgs


1.15 MSF, 68 Bldgs

1.57 MSF, 69 Bldgs

1.57 MSF, 59 Bldgs

1.64 MSF, 59 Bldgs

0.99 MSF, 47 Bldgs



Monthly Economic Indicators

Positive Changes

9,400 32,300 28,600

17% 17% 26%

2.6% ‐0.7 percentage points 2.9%

‐0.7% 0.6% 3.3%

2.9% 4.9% 3.1%

130.6 ‐14.3% 135.1

85.7% 0.5 percentage points 76.5%

5.4% 10.0% 6.8%

584.0 9.0% 26.8%

26,916.8 1.7% 15.4%

5,378 21.3% 38,724

$471,400 1.8% $459,000

240 0.4% 1,842

1,598 ‐9.2% 13,072

Permits decreased 10.6% from

July to August

Permits down August 2018 to

2019

YTD permits down 13.7%

through August 2019

Foreclosures

Up 16.5% from July to August Up from August 2018 to 2019 Up 0.3% YTD through August 2019

Residential Building Permits (Total)

Home Sales (closed)Sales down 12.9% between July and

AugustSales up from August 2018 to 2019 YTD sales up 4.7% through August 2019

Median Home Price

(Denver‐Aurora MSA)Up 5.6% from 1Q 2019 to 2Q 2019 Price up from 2Q 2018 to 2Q 2019 YTD price 1.5% higher through 2Q 2019

Bloomberg Colorado Index

Index up 0.8% from August to September Index up from September 2018 to 2019 YTD return up through September 2019

Dow Jones Industrial Average

Index up 1.9% from August to September Index up from September 2018 to 2019 YTD return up through September 2019

Hotel OccupancyDecreased 3.4 percentage points from July

to August

Occupancy increased from August 2018 to

August 2019YTD occupancy up from last year

Denver International Airport Passengers

Passengers up from June to July Passengers up from July 2018 to 2019YTD passengers increased through July

2019

Total National Retail Sales

National sales increased from June to JulyNational sales increased from July 2018 to

2019YTD sales rose through July 2019

Mountain Region Consumer Confidence IndexIndex down 9.2 percent from August to

September

Index down from September 2018 to

2019

YTD average up 1.6% through September

2019

Unemployment RateUnemployment down 0.1 percentage

point between July and August

Unemployment down from August 2018

to 2019

Down 0.1 percentage points from 2018

YTD average

Initial Unemployment Insurance Claims

Claims decreased from July to AugustClaims increased from August 2018 to

2019

YTD average claims increased through

August 2019

Nonfarm Employment GrowthEmployment up 0.5% from July to August

Employment up 1.9% from August 2018

to 2019YTD employment up 1.7% through August

% Companies Hiring

(Denver Area) Companies hiring fell 12 percentage

points from 3Q 2019 to 4Q 2019

Companies hiring fell 8 percentage points

from 4Q 2018 to 4Q 2019

YTD average down 1 percentage point

compared with 2018

Monthly/Quarterly Direction Year‐Over‐Year Direction Year‐to‐Date Direction

9 of 18 11 of 18 12 of 18


5.0% ‐1.0 percentage points 5.2%

Vacancy decreased 0.4

percentage points from 1Q

2019 to 2Q 2019

Vacancy decreased from 2Q

2018 to 2Q 2019

YTD average down 0.9

percentage points from last

year

9.9% ‐0.4 percentage points ‐0.4 percentage points

Vacancy rate up 0.2 percentage

points from 2Q 2019 to 3Q

2019

3Q 2019 vacancy down from

10.3% one year ago

3Q 2019 vacancy down from

10.3% one year ago

5.3% +1.1 percentage points +1.1 percentage points

Vacancy rate increased 0.7


2019 to 3Q 2019

3Q 2019 vacancy up from 4.2%

one year ago


one year ago

4.6% +0.3 percentage points +0.3 percentage points

Vacancy rate increased 0.2


2019 to 3Q 2019


from one year ago


from one year ago

Office Vacancy Rate (with Sublet)

Industrial Vacancy Rate (with Sublet)

Retail Space Vacancy Rate (with Sublet)

Apartment Vacancy Rate

Economic and Demographic Research Industry Studies Fiscal and Economic Impact Analysis Real Estate Economics 10184 West Belleview Avenue Suite 100 Littleton, Colorado 80127 www.DevelopmentResearch.net 303.991.0070

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