Today’s national employment numbers for June reported a gain of 222,000 non-farm jobs, significantly better than predicted, according to Goldman Sachs Research. The unemployment rate held at 4.4 percent, although wage growth continues to stagnate.
DENVER MARKET STILL ROBUST
Metro Denver’s unemployment rate at 3.1 percent is lowest among large metro markets nationwide, according to JLL’s first quarter commercial real estate analysis. That stat dovetails nicely with the overall health of the office market here.
With a total metro-wide vacancy rate of 13.9 percent—a slight rise from first quarter 201
7—asking gross rents remain flat at $27.82.
JLL attributes the rise in vacancy to continued slow recovery in the energy sector, including significant tenant move-outs and an abundance of available sublease space. Additionally, new product continues to come on-line, which despite its effect on vacancy, is a good problem to have in terms of overall growth.
Indeed, over 4 million square feet of new construction is underway here, with LoDo, RiNo and Central Platte Valley leading the way in speculative development. TOD (transit-oriented development) remains strong in suburban markets and on the LoDo-Platte side of the downtown submarket.
IT’S A TENANT’S MARKET–FOR NOW
The takeaway here is that tenants will “control” the market for the foreseeable future. Landlords will continue to offer free rent among other attractive incentives, including major infrastructure improvements. JLL’s report sums it up nicely: “In an aging property market, owners will be wise to place capital into upgrades and renovations to meet the strong preference of existing users and new-to-market companies; they also need to compete with new supply.”
7—asking gross rents remain flat at $27.82.
JLL attributes the rise in vacancy to continued slow recovery in the energy sector, including significant tenant move-outs and an abundance of available sublease space. Additionally, new product continues to come on-line, which despite its effect on vacancy, is a good problem to have in terms of overall growth.
Indeed, over 4 million square feet of new construction is underway here, with LoDo, RiNo and Central Platte Valley leading the way in speculative development. TOD (transit-oriented development) remains strong in suburban markets and on the LoDo-Platte side of the downtown submarket.
IT’S A TENANT’S MARKET–FOR NOW
The takeaway here is that tenants will “control” the market for the foreseeable future. Landlords will continue to offer free rent among other attractive incentives, including major infrastructure improvements. JLL’s report sums it up nicely: “In an aging property market, owners will be wise to place capital into upgrades and renovations to meet the strong preference of existing users and new-to-market companies; they also need to compete with new supply.”