Quarterly Economic Summary
2015
Second Quarter
Economic indicators in the Denver South1 region continued to improve through the second quarter of the year with
rising employment, falling unemployment rates, and strong residential and commercial real estate markets.
Employment in the Denver South region increased 3 percent in the first quarter of 2015 compared with the prior
year, representing 6,240 additional jobs. Employment in every supersector except information increased over-theyear, with the construction sector reporting the largest over-the-year increase (+6.6 percent) and the information
sector falling by 0.9 percent. Unemployment rates fell throughout the region, ranging from a 0.6 percentage point
decline in Douglas County to a 0.8 percentage point decline in Arapahoe County and the City and County of
Denver.
Real estate indicators reported a decline in foreclosures during the second quarter, declines in apartment vacancy
rates, and increases in average home sales prices. Residential home sales and sales prices improved during the
second quarter of 2015. Condominium and townhome sales in the area rose 8.4 percent during the second quarter
2015 compared with the previous year and the average sales price of single-family detached homes rose 8.8
percent. The average apartment rental rate increased in all six Denver South submarkets, with rents ranging from
$1,105 in the City and County of Denver-Far Southeast submarket to $1,508 in the Douglas County-North
submarket.
Trends in the commercial real estate markets (office, industrial, flex, and retail) in the Denver South region were
generally improved in the second quarter compared with the same time in 2014. The flex market reported the
largest increase in the average lease rate, rising 15.7 percent to $10.48 per square foot. The industrial market
posted an increase in the vacancy rate, but continued to record growth in the average lease rate. The office market
reported the highest average lease rate during the second quarter, reaching $23.68 per square foot.
Denver South EDP Economic Headlines
Rankings

Forbes ranked Denver the nation’s best place for business and careers, while Fort Collins ranked 10th. The
Denver-Aurora-Lakewood metropolitan statistical area (MSA) ranked number one for the first time, rising from
fourth place on the 2014 list. The company stated that the area is attractive for its diverse economy, highly
educated labor force, and outdoor recreational opportunities. Raleigh, N.C. was ranked second followed by
Portland, Ore., and Provo, Utah.

Area Development magazine ranked the country’s cities for economic and job growth in their annual “Leading
Locations for 2015” list. The list ranked the Denver-Aurora MSA first. The report analyzed 373 MSAs across 21
economic and workforce indicators including unemployment rates, wage growth, and job growth. A spokesperson
for the magazine stated that the leading locations are MSAs that have invested in themselves to create skilled
workers and pro-business environments and that many of the areas have strong educational assets.

According to Money magazine, Denver is the best city to live in the West. The magazine stated that Denver was a
“mecca for millennials” and that the city has relatively affordable real estate, when compared with Boston or San
1
The Denver South region consists of data reported for the following eight zip codes: 80111, 80112, 80124, 80126, 80129,
80130, 80134, and 80237.
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Francisco, and great access to recreation. Louisville was ranked fourth on the magazine’s Top 50 small cities to
live list and Erie ranked 13th.

The latest Fortune 500 list included six Denver South companies among the nation’s largest public and private
corporations. The highest ranked company in Denver South was Arrow Electronics at number 131 followed by
Dish Network (208), Liberty Interactive (263), Newmont Mining (379), Western Union (468), and CH2M (480).

The 2015 Kauffman Index was released by the Ewing Marion Kauffman Foundation, a private, nonpartisan
foundation that studies and promotes entrepreneurship. The index ranked Colorado as the fourth state with the
most startup activity, with 350 people out of every 100,000 adults becoming entrepreneurs each month. Of the
nation’s 40 largest metro areas, Metro Denver was ranked fifth for startup activity, with 370 people out of every
100,000 adults becoming entrepreneurs. The index considers the percentage of adults becoming entrepreneurs in
any given month, the number of opportunity versus necessity entrepreneurs, and startup density.

The American Institute for Economic Research released a report on the top destinations for young college
graduates and Denver ranked seventh. The report considered eight economic and quality-of-life factors including
a high density of people with a college degree, a low unemployment rate, and the ability to get around without a
car. Denver was recognized for millennials making up the largest population group in Metro Denver. Washington,
DC was ranked first followed by San Francisco, Calif., Boston, Mass., and San Jose, Calif.
Company Announcements

Kaiser Permanente announced plans to add 75 employees over the next year at a new facility for its National
Claims Administration in Douglas County. The company said that the new facility could have 400 claims officials
in the building by the end of 2017.

California-based Intuit Inc., a financial-software publishing company, announced plans to lay off 59 employees
and close its Douglas County call center. The company stated the layoffs were part of a companywide
restructuring plan.

CenturyLink announced plans to reduce its nationwide workforce by 1,000 workers and about 150 workers in
Colorado will be included in the layoffs. The 150 people laid off in Colorado represent about 2.5 percent of the
company’s workforce in the state.

TopGolf International Inc. operates a chain of golf-themed entertainment complexes and plans to open its first
Colorado location in August. The 65,000-square-foot facility is located in Centennial at the corner of South
Havana Street and East Easter Avenue. The facility is designed for players to hit golf balls from 102 hitting bays
on three levels that contain computer microchips that track each shot’s accuracy and distance. The attraction will
employ 450 people and expects to serve 450,000 customers in the first year.

The Denver South Economic Development Partnership announced a new collaboration with the Innovation
Pavilion and Arrow Electronics. The new initiative, TechrIoT, is a Colorado-based community of Internet of
Things (IoT) entrepreneurs, executives, manufacturers, investors, engineers, suppliers, and academics. The
program aims to accelerate the adoption and growth of the IoT economy in Colorado and establish Colorado as a
global hub for innovation in one of the fastest growing segments of the technology industry.

A group of ten local companies came together to form a collaborative organization called Innovators Colorado.
The group includes companies such as Aspen Skiing Co., CableLabs technology consortium, DaVita Healthcare
Partners Inc., and the Denver South Economic Development Partnership. The companies intend to use the
organization to come up with transformational ideas that create new businesses and establish new markets. The
organization stated that discussions across industries would help cross-pollinate ideas and help companies grow.
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Employment Activity
Employment in the Denver South region rose 3
percent between the first quarters of 2014 and
2015, generating an additional 6,240 jobs overthe-year. The largest supersector by total
employment is professional and business services
(53,230 employees) and the sector reported a 1.6
percent increase in employment during the same
period or adding 813 new jobs. The construction
sector reported the largest over-the-year
percentage increase, rising 6.6 percent to 9,850
jobs, and added 610 jobs during the first quarter.
The financial activities supersector (+4.1 percent)
created the most jobs during the period,
generating 1,400 new positions. The mining and
logging sector reported the smallest increase in
employment between the first quarters of 2014
and 2015, rising 0.7 percent to 1,350 employees. The information sector reported a 0.9 percent decline to 17,630 total
employees.
 Metro Denver reported a 4.2 percent increase in employment to 1.5 million workers between the first quarters
of 2014 and 2015. Every supersector continued to report growth over-the-year. The largest percentage increase
occurred in the construction sector (+9.3 percent) and the smallest increase occurred in the information
supersector (+0.2 percent).
Manpower Employment Outlook Survey
Hiring expectations in the U.S. increased through the fourth quarter of 2015. The percentage of employers planning to
increase employment levels rose 2 percentage points between the fourth quarters of 2014 and 2015 at the national
level, while the Metro Denver level fell 2 percentage points over-the-year. Companies planning to increase staffing
levels during the fourth quarter fell to 19 percent in Metro Denver. The majority of Metro Denver companies intend to
maintain staff levels through the fourth quarter of the year, increasing 6 percentage points from the previous year.
Manpower Employment Outlook Survey
National
Metro Denver
4Q 2015
3Q 2015
4Q 2014
Companies Hiring
19%
26%
21%
21%
24%
19%
Companies Laying
Off
2%
6%
1%
4%
8%
7%
Companies No
Change
76%
71%
73%
70%
70%
72%
Unsure
3%
0%
1%
2%
2%
2%
Labor Force and Unemployment
The average unemployment rates in the Denver South region continued to decline between the second quarters of
2014 and 2015. Douglas County reported the smallest decline in the unemployment rate, falling 0.6 percentage points
over-the-year to 3.5 percent, but reported the lowest unemployment rate of the four submarkets. The largest decreases
occurred in Arapahoe County (4.2 percent) and the City and County of Denver (4.2 percent), both falling 0.8
percentage points over-the-year. Centennial also recorded an unemployment rate of 4.2 percent, a decline of 0.7
percentage points between the second quarters of 2014 and 2015.
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
Of the seven Metro Denver counties,
Douglas County had the fifth smallest
over-the-year decline in the
unemployment rate. Arapahoe County
reported the second largest decline in the
unemployment rate, while the City and
County of Denver reported the third
largest decline.

Metro Denver reported a 0.8 percentage
point decline in the unemployment rate to
4.1 percent in the second quarter of 2015
compared with the prior year’s level. The
unemployment rate declined by 0.8
percentage points in Colorado, dropping
to 4.4 percent. The United States recorded
a 0.8 percentage point decline in the
national unemployment rate over-theyear, falling to 5.3 percent.
Consumer Activity
Consumer Confidence
Consumer confidence fell during the second
quarter of 2015, decreasing 5 percent over-thequarter to 96.2 for the U.S. index. However, the
U.S. index recorded a 15.3 percent increase in
consumer confidence between the second quarters
of 2014 and 2015. The second quarter 2015 level
was the second highest national consumer
confidence level since the fourth quarter of 2007.
The Mountain Region index, which includes
Colorado, also decreased during the second
quarter of 2015. The Mountain Region index fell
to 106.8, an over-the-quarter decrease of 2.4
percent. However, the Mountain Region index
reported an over-the-year increase of 20.4 percent.
The second quarter 2015 level was the second
highest level of consumer confidence since the
first quarter of 2008.
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Lodging
Hotel and lodging in the Denver South region
recorded improvements through the second
quarter of the year. The South and Southeast
Denver markets ended the second quarter with a
year-to-date hotel occupancy rate of 73.2 percent,
1.7 percentage points higher than the previous
year’s level. The market’s average rental rate was
$120.58 per night year-to-date, $9.84 higher than
the same period a year prior.

Metro Denver ended the second quarter
with a year-to-date hotel occupancy rate
of 75.4 percent, 1 percentage point higher
than last year. The average room rate for
Metro Denver was $130.12 per night
year-to-date, $9.80 per night higher than the same period a year prior.
Retail Trade Sales
Retail trade sales in the Denver South region reported significant growth through the fourth quarter of 2014, as three
of the four municipalities in the region reported over-the-year increases. Centennial recorded the largest increase in
sales over-the-year, rising 8.6 percent to nearly $596.6 million. Lone Tree and Greenwood Village also reported
significant growth during the same period, increasing 7.5 percent and 7 percent, respectively. Highlands Ranch
reported the only decrease in retail trade sales between the fourth quarters of 2013 and 2014, falling 2.7 percent to
$266.2 million in total sales. Metro Denver reported a 6.6 percent increase in retail trade sales during the same period,
generating an additional $903.8 million in sales.
Retail Trade Sales ($000s) by Industry & Municipality, Fourth Quarter 2014
Industry
Motor Vehicles & Auto Parts
Furniture & Home Furnishings
Electronics & Appliance Stores
Building Materials & Nurseries
Food & Beverage Stores
Health & Personal Care Stores
Service Stations
Clothing & Accessory Stores
Sports Goods, Hobby, Book, and Music Stores
General Merchandisers & Warehouse Stores
Miscellaenous Stores
Non-Store Retailers
Food & Drinking Services
Total Retail Trade Sales, 4Q 2014
Total Retail Trade Sales, 4Q 2013
Centennial
233,895
54,227
13,624
16,633
95,603
17,190
8,828
20,593
20,162
35,509
26,375
12,954
40,983
596,576
549,383
Greenwood
Village
51,822
4,106
7,481
14,428
40,678
2,200
5,670
18,708
4,883
27,037
43,012
277,852
259,756
Highlands
Ranch
5,383
4,146
58,657
14,107
7,353
6,665
4,092
51,850
11,554
2,860
26,200
266,207
273,533
Lone Tree
41,738
23,853
29,294
14,169
12,768
103,499
43,725
134,113
9,606
9,482
40,356
474,086
440,980
Metro Denver
2,840,839
504,480
502,530
839,746
2,405,838
698,665
567,976
789,049
496,498
1,979,262
914,239
293,970
1,681,945
14,515,037
13,611,194
Note: Data for shaded categories are suppressed to maintain confidentiality.
Source: Colorado Department of Revenue.
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Residential Real Estate
Home Sales
Between the second quarters of 2014 and 2015,
home sales in the Denver South region rose in the
condominium/townhouse (+8.4 percent) sector,
while sales were unchanged in the single-family
detached sector. During the same period, there
were 38 additional condominiums and townhomes
sold (492 total) and there were 1,300 singlefamily detached homes sold in the second quarter.
The average sales price for
condominiums/townhomes ($268,090) rose 11.8
percent, while the average sales price for singlefamily detached ($446,620) rose 8.8 percent overthe-year.

Metro Denver reported a 13.2 percent increase in condominium/townhome sales (4,823 sales) between the
second quarters of 2014 and 2015 and a 5.6 percent increase in single-family detached home sales (13,223
sales). The average sales price of a condominium/townhouse rose 11.5 percent over-the-year and the singlefamily detached average sales price rose 11.3 percent.
Existing Homes Sales in the Denver South Region, Second Quarter 2015
Homes Sold
Average Sales Price
Average Sales Price per Sq. Ft.*
2Q 2015 2Q 2014 Yr/Yr % Ch 2Q 2015 2Q 2014 Yr/Yr % Ch 2Q 2015 2Q 2014 Yr/Yr % Ch
Denver South Region
Condominium/Townhouse
Single-Family Detached
Metro Denver
Condominium/Townhouse
Single-Family Detached
492
1,300
454
1,300
8.4% $268,090
0.0% $466,623
$239,738
$428,993
11.8%
8.8%
$196
$208
$175
$190
12.0%
9.5%
4,823
13,223
4,261
12,521
13.2% $231,616
5.6% $407,889
$207,750
$366,337
11.5%
11.3%
$199
$222
$177
$201
12.4%
10.4%
Note: Data could include a small number of new home sales. *Excludes homes where total square footage was not reported.
Source: Colorado Comps.
Residential Building Permits
The five principal areas for the Denver South region reported building permits for 2,386 units in the second quarter of
2015, an increase of 56.9 percent over-the-year. Unincorporated Douglas County reported a 58 percent decline in
permits over-the-year, issuing 350 fewer permits
in the second quarter 2015. The City and County
of Denver reported the most permits (2,095 total),
an increase of 141 percent over-the-year.
Centennial (-41 percent) and Lone Tree (-12
percent) both issued fewer housing permits during
the period. Greenwood Village reported the only
increase in the number of units permitted, rising
from one permit during the second quarter of
2014 to three permits during the second quarter of
2015. Metro Denver reported a 27 percent
increase in building permits, representing 1,023
additional permits over-the-year. (Note: Permit
counts are for entire cities, not just the portion
included in the Denver South region.)
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Foreclosures
Foreclosure activity in the Denver South region continued to decline during the second quarter of 2015. Arapahoe
County reported the sixth smallest decline in foreclosures of the seven Metro Denver counties, falling 24.2 percent in
the second quarter of 2015 compared with the previous year. For the second quarter, Arapahoe County reported 269
total foreclosures. Douglas County reported a 25.2 percent decrease in foreclosures over-the-year to 83 filings in the
second quarter of 2015. Foreclosure filings in the City and County of Denver fell 35 percent during the same period.
Metro Denver recorded a drop in foreclosure activity, declining 27.9 percent to 1,016 filings for the second quarter.
(Source: Colorado Division of Housing and county public trustees.)
Apartment Market
The Denver South apartment market continued to tighten during the second quarter of 2015. Arapahoe County and
Arapahoe County-South reported the only increases in the vacancy between the second quarters of 2014 and 2015,
both rising 0.4 percentage points. The City and County of Denver recorded the largest over-the-year decline in
vacancy, falling 0.7 percentage points to 4.9 percent. Douglas County (-0.4 percentage points) also reported declining
vacancy during the period. The northern portion of Douglas County reported a 0.5 percentage point decline in
vacancy over-the-year, while the far southeast portion of the City and County of Denver declined 0.1 percentage
points during the same period. The
average rental rate increased across
Apartment Vacancy Rates and Average Rents
all market areas and counties in the
Vacancy
Average Rent
Denver South region, with the largest
2Q 2015 2Q 2014 2Q 2015 2Q 2014
over-the-year increase in Arapahoe
Arapahoe County
5.0%
4.6%
$1,224
$1,067
County (+14.8 percent). The smallest
Arapahoe County - South
3.1%
2.7%
$1,396
$1,334
increase occurred in Arapahoe
City & County of Denver
4.9%
5.6%
$1,279
$1,127
County-South, which rose 4.7
Denver - Far Southeast
3.5%
3.6%
$1,105
$1,010
percent during the same period. The
Douglas
County
3.4%
3.8%
$1,488
$1,351
average rental rate ranged from
Douglas County - North
3.5%
4.0%
$1,508
$1,371
$1,105 per month in the City and
Metro
Denver
4.5%
4.7%
$1,265
$1,117
County of Denver-Far Southeast
Source: Apartment Association of Metro Denver, Denver Metro Apartment Vacancy and Rent Survey.
market to $1,508 per month in the
Douglas County-North market.

Metro Denver reported a 0.2 percentage point decrease in the vacancy rate over-the-year. The average rental
rate rose 13.3 percent during the second quarter, representing an additional $148 in average monthly rent.
Commercial Real Estate
Note: lease rates for industrial, flex, and retail property are triple-net; office rates are full-service.
Commercial Activity
The four commercial real estate markets in the Denver South region posted rising average lease rates and mixed
changes in vacancy rates during the second quarter of 2015 compared with the previous year. The office market
reported no change in the vacancy rate, while the average lease rate rose 5.7 percent to $23.68 per square foot. The
industrial market vacancy rate rose 1.6 percentage points and the average lease rate rose 3.1 percent during the same
period. The flex market reported the largest decline in vacancy rates, falling 3.3 percentage points, and the average
lease rate rose 15.7 percent. The retail market recorded a 0.9 percentage point decline in vacancy and a 2 percent
increase in the average lease rate.

The vacancy rate and the average lease rate in Metro Denver improved across all property types. The largest
increase in average lease rate was in the industrial market, rising 18.4 percent over-the-year to $6.63 per
square foot. Flex space and office space reported the largest declines in vacancy rate, both falling 1.1
percentage points over-the-year.
Page | 7
Denver South Region Commercial Vacancy and Lease Rates by Property Type
2Q 2015
2Q 2014
2Q 2015
Direct Vacancy Rate
2Q 2014
Avg Lease Rate 2Q 2015
(per sq. ft.)
2Q 2014
Total Existing
Square Footage
Office
Industrial
Flex
Retail
DSEDP
Metro
DSEDP
Metro
DSEDP
Metro
DSEDP
Metro
Region
Denver
Region
Denver
Region
Denver
Region
Denver
41.9
175.5
8.0
205.8
8.1
41.8
18.2
160.9
41.4
174.2
7.9
204.1
8.0
41.0
18.1
159.8
10.6%
9.8%
5.9%
2.9%
7.9%
8.1%
2.9%
5.0%
10.6%
10.9%
4.3%
3.7%
11.2%
9.2%
3.8%
5.7%
$23.68
$23.56
$8.55
$6.63
$10.48
$10.31
$18.79
$15.78
$22.40
$22.44
$8.29
$5.60
$9.06
$9.77
$18.42
$15.47
Note: Vacancy rate and average lease rate are for direct space only (excludes sublet space). Industrial and retail lease rates are triple-net.
Source: CoStar Realty Information, Inc.
Nonresidential Development Activity
Construction started or continued during the second quarter of 2015 with over one million square feet of office, retail,
and specialty space in the Denver South region. Some of the projects under construction in the Denver South region
include:

Construction continued on The Evergreen Building in Lone Tree, which will span 117,490 square feet when
completed.

Construction also continued on the third building of the Charles Schwab campus, which will have 187,500
square feet of office space when completed.

There was over 140,000 square feet of retail space under construction, including a 123,000-square-foot King
Soopers in Parker and a 3,798-square-foot Kneaders Bakery & Café in Highlands Ranch.
Prepared by:
Development Research Partners, Inc.
10184 West Belleview Ave, Ste 100
Littleton, Colorado 80127
303-991-0070
www.developmentresearch.net
September 2015
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