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8811 East Hampden Ave.,
Suite 104 
Denver, CO 80231

  • Phill Foster and Company

    Industrial land and building experience

  • Phill Foster and Company

    Subsurface mineral rights

  • Phill Foster and Company

    Water rights uses and sand and gravel

  • Phill Foster and Company

    Over 40 years office leasing experience

  • Phill Foster and Company

    Niobrara shale oil properties

Outlook on Denver/Colorado Springs


Denver Economy: As national events such as tax reform and immigration policy shape the overall economic climate, Denver remains a strong local market. The metro economy is bolstered by fundamentals such as steady population and job growth, above-average GDP growth, and the intangible quality of life factors that attract new talent and companies.

Denver Capital Markets: Denver CRE investment activity is strong but beginning to slow as investors respond to volatility in the financial markets and political uncertainty. Denver pricing and foreign investment will continue to trend upward as the market shows its strength in returns against the U.S. average.

Denver Office: 2018 will bring moderation to Denver’s office sector. Demand will need to work overtime to match the pace set by supply early in the year. Expiring high-profile energy leases create uncertainty, but overall leasing activity is expected to remain strong as Denver continues attracting both the demand and supply of labor.

Denver Industrial: The Denver Industrial market is poised for more growth after a strong 2017, as solid economic fundamentals and e-commerce fuel demand. Vacancy may rise as older space is vacated in favor of new, but lease rates will continue their upward swing since new and well-located properties fetch a premium.

Denver Retail: The overall outlook for Denver retail is positive, reflected in the heightened construction activity. More department store closures are on the horizon, but the healthy economy should boost retail fundamentals through 2018.

Denver Multifamily: Denver’s economy still shines, and its population growth is feeding demand for multifamily. In 2018, strong net absorption should bolster the market as new unit deliveries ramp up. Softening will occur in submarkets with particularly elevated supply headwinds.

Colorado Springs:

The Colorado Springs Industrial market vacancy rate dipped back to normalcy in the first quarter 2018 and overall rental rates continue to slowly increase. The signs that new construction is needed throughout Colorado Springs is ever increasing as demand and lack of quality spaces continue to be limited.

The overall Industrial vacancy rate dropped from 10.7% at the end of the fourth quarter 2017 to 9.4% at the end of the first quarter 2018. This is a substantial drop over one quarter, but the 9.4% represents an average rate we have seen over the past few years and the high 10.7% rate is corelated to an increase of new product being delivered at the end of the fourth quarter 2017. The Flex sector vacancy rate has begun to drop and recorded a vacancy rate of 14.8% at the end of the fourth quarter 2018, which compares to the first quarter 2017 which was 17.8%. The Warehouse sector remains steady at a vacancy rate of 8.1% at the end of the first quarter 2018.

The overall net absorption for the Colorado Springs Industrial market recorded positive 164,469 square feet at the end of the first quarter 2018, with the Warehouse sector totaling a positive absorption of 242,602 square feet and the Flex sector recording negative 78,133 square feet.

Rental rates for the Industrial market continue to increase, which the overall Industrial market was recorded at $8.09 per square foot (NNN) at the end of the first quarter 2018. The Flex sector quoted rental rate was $9.84 per square foot (NNN) and the Warehouse sector recorded a quoted rental rate of $7.40 per square foot (NNN) at the end of the first quarter 2018, both increases over the fourth quarter 2017.

New construction continues to be a trend and highlight for the Industrial market with three buildings totaling 160,040 square feet of space were completed during the first quarter 2018 and there is a total of 182,300 square feet under construction. The largest completion was the project located at 2570 Zeppelin Rd which consists of 131,040 square feet and is 100% occupied. We are continuing to see smaller projects 25,000 square feet and less begin to break ground, both build-to-suit and speculative projects, which we have been anticipating over the past few quarters.

Industrial building sales transactions, over 15,000 square feet total, were down in 2017 due to a lack of options, recording 18 total transactions, compared to 2016 which reported a total of 25 transactions, but the average price per square foot had a nominal difference recording $66.12 per square foot in 2017 compared to $66.66 recorded in 2016.

With the vacancy rates continuing to decrease and further increases in rental rates, the trend for new construction is evident. This trend is expected to continue as owners and tenants require additional space with a lack of options both for sale and for lease.