It’s no secret that Denver’s commercial real estate market is very strong. The area is near the top of nearly every list of locales for being a hot market across the industry’s sectors. Recently Jeff Coyne, a business development director GRS Group, recently attended the RealShare Denver conference and gave us some insight as to what is taking place in this hot market.
What is happening in the area north of downtown? It seems like there is a lot of activity.
The City of Denver is planning a massive redevelopment project called the North Denver Cornerstone Collaborative (NDCC). Kelly Leid, executive director, said that six major (some concurrent) projects along north side of downtown are already underway to transform Denver’s “back door” into its “front door.” It is one of the biggest urban redevelopment efforts in the country and will re-energize and reshape the area where Interstate 70 meets Interstate 25 northwest of downtown. This includes a new viaduct on I-70 (where downtown links to the airport along the route of the almost completed light rail project from Denver International Airport to Union Station); the Brighton Boulevard revitalization, some land reclamation along the Platte River; completion of three new infrastructure lines; and a complete renovation of the National Western Stock Show building. This is a big financial outlay for the city and is the kind of forethought that is resulting in massive amounts of capital flowing into Denver.
What is driving the influx of office-employee talent coming to the area?
There are tons of reasons. Take your pick. It has an excellent lifestyle, 300-plus days of sunshine, world-class recreation, a vibrant downtown, a nationally ranked college – Denver literally has it all. One panelist on the state of Denver multifamily summed it up well. Millennials and Boomers want to be here – if there is a top 10 list of almost anything, Denver is on it. Between the availability of jobs, multiple industry drivers for CRE absorption, a highly educated workforce, a live-work-play lifestyle, the Rocky Mountains, great food and beer – Denver is a city people want to live in. That’s why people want to be here and Colobrado continues to have net in-migration year after year.
Where does it seem like the capital is flowing from for deals in this area? Is it different from other regions of the country?
Investment capital is coming from everywhere. Investors looking for yield, foreign investment, and homegrown growth are all fueling the CRE market here. Those investors looking outside the “sexy six” markets find Denver has a great story to tell at a better price. Although pricing is starting to catch up with the more known gateway coastal markets, there is still value to be had here. Multifamily assets are white hot, industrial absorption is above national average (thanks to legalized marijuana), and office space is absorbing year-over-year.
Tell us about downtown and the CRE vibrancy taking place.
The conversation about downtown vibrancy starts with Union Station. The area in and around Union Station is a new hot spot directly in the heart of LoDo (lower downtown) which was already the heart of the city in terms of nightlife, bars, restaurants, office, multifamily space, access to the sports facilities and more. The Platt Valley is an up-and-coming area adjacent to LoDo and the projects mentioned above will expand the revitalization north and west of the CBD as well. When you consider all this, and the new rail that will connect Downtown Denver to the airport directly, Denver will be over one of its major barriers – locals often hear about “how far out the airport is from town.” That distance is about to get shorter and far easier to navigate – this bodes well for both the local business traveler working downtown and the investor interested in coming in and buying into a great TOD market.
What services does GRS provide in the greater Denver MSA?
We’re doing a lot. We have a great mixture of different types of firms, such as investors/owners, lenders, brokers and CMBS shops. GRS also services nearly every commercial real estate sector, including multifamily, office, industrial and retail throughout the Bay Area. Among our many offerings to clients are property condition assessments (PCAs), Phase 1 environmental assessments, seismic reports and zoning reports, as well as many other services. We do major title and appraisal work for clients in the region.