Q2 2020 | DOUGLAS COUNTY

QUARTERLY COMMERCIAL MARKET OVERVIEW

NavPoint Real Estate Group | 720.420.7530 | www.navpointre.com

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

$25.57Rental Rate

OFFICE

9.6% Vacancy Rate

$12.51Rental Rate

INDUSTRIAL & FLEX

8.9% Vacancy Rate

Q2 2020 STATS

$20.48Rental Rate

RETAIL

2.8% Vacancy Rate

APARTMENT

$1.65Rental Rate

8.7% Vacancy Rate

Our team of professionals have a broad understanding of the national commercial real estate market while also providing acute local knowledge. If you are looking for specific information on the local commercial real estate market, contact anyone on our brokerage services team for assistance.

Denver has reclaimed about half of the jobs lost during April shutdowns, according to June data from the Bureau of Labor Statistics. The nonfarm unemployment rate compressed below 10%, outperforming the national average. At the start of 2020, Denver’s unemployment rate was below 2.5%, making it one of the tightest job markets in the country.

With a job location quotient near the national average for retail and leisure and hospitality. Denver is not overly exposed to the hardest-hit sectors. Nevertheless, Denver International Airport is a key economic driver for the region, generating more than $33 billion for the state in a 5-year span. Flights have been reduced by up to 90% by several airlines. Although Denver will not be more affected than most major metros in this regard, it does rely heavily on in-migration to fuel its labor force growth and overall economy, metrics which are expected to decline sharply in the coming months.

Denver’s emergence as a bona fide technology market this cycle has helped insulate it from the impact of the coronavirus-induced downturn. Tech employers typically allow the flexibility of telecommuting, and many office-using employers have the capacity to facilitate a work-from-home transition. Office-using jobs in Denver have growth above the national average the past five years at about 3% annually.

Government employment has also been consistent, if not pedestrian, in terms of employment growth in the state capital. The public sector has often been a stabilizing force during past economic downturns. The government and professional business services sectors were the only nonfarm job sectors in Denver to grow at or above their five-year average in 2019. Although education and health services job gains were below their five-year average in 2019, it ranked as the third-strongest employment growth sector behind professional and business services and government. Healthcare is seeing a major investment in the $1.3 billion VA hospital in Aurora, the Denver Health Administration’s new headquarters in South Midtown, and Catalyst’s 300,000 SF digital health facility in the RiNo neighborhood.

Even though Denver’s overall employment growth showed signs of a slowdown last year along with the national index, it added tech jobs at an accelerating pace. Employment in Professional, Scientific & Technical Services grew by more than 7% annually in 2019, one of the best growth rates in the country. Corporate expansions and relocations by tech companies such as Amazon, Slack, and Conga drove employment gains and epitomize the trend of West Coast firms choosing to expand in Denver for its robust workforce, quality of life and cost of doing business.

Source: CoStar 2020

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

Apartment VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County 10.4% 9.6% 8.4% 8.6% 8.0% 9.3% 8.7%Denver County 7.4% 7.4% 7.4% 7.3% 7.8% 8.2% 9.3%

Apartment Lease RatesQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County $1.60 $1.62 $1.65 $1.64 $1.62 $1.63 $1.65Denver County $1.86 $1.89 $1.92 $1.91 $1.89 $1.90 $1.88

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

Retail VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County 2.7% 2.6% 2.4% 2.1% 2.1% 2.1% 2.8%Denver County 3.2% 3.6% 3.1% 3.4% 3.3% 3.7% 4.1%

Retail Lease RatesQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County $21.32 $21.54 $20.83 $21.08 $26.78 $26.50 $20.48Denver County $23.71 $24.34 $24.77 $24.96 $26.00 $26.57 $26.73

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

Office VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County 12.7% 11.4% 11.6% 11.2% 10.5% 10.1% 9.6%Denver County 11.4% 11.0% 10.8% 10.9% 10.7% 11.2% 12.5%

Office Lease RatesQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County $20.71 $21.87 $21.35 $21.53 $28.04 $28.49 $25.57Denver County $26.33 $26.60 $26.58 $26.67 $31.51 $32.51 $31.73

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

Industrial & Flex VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County 3.4% 2.7% 2.5% 6.6% 7.3% 7.3% 8.9%Denver County 3.4% 3.3% 3.6% 3.8% 4.1% 4.4% 4.7%

Industrial & Flex Lease RatesQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Douglas County $11.60 $11.28 $11.37 $11.52 $13.10 $13.56 $12.51Denver County $7.94 $7.81 $7.60 $7.89 $8.65 $8.91 $8.73

Q2 2020 | DOUGLAS COUNTY

MARKET OVERVIEW

The information contained in this report was obtained from CoStar Realty Information Inc. This data is intended to only show trends in the area. All reported sales were not necessarily listed or sold by NavPoint Real Estate Group.

NavPoint Real Estate Group3740 Dacoro Lane | Suite 200Castle Rock, CO 80104

720.420.7530 Office720.240.0762 Fax

www.navpointre.com

Brent HamBrokerage Services

NavPoint Real Estate Group is a comprehensive Commercial Real Estate Services Firm with office locations in Denver, Castle Rock and Colorado Springs, Colorado. The company specializes in acquisitions, dispositions, and leasing across all product types throughout Colorado and the Western United States. NavPoint’s team of professionals have a broad understanding of the national commercial real estate market while also providing acute local knowledge to each assignment. The firm has completed over 900 transactions and is currently involved in the exclusive brokerage of well over 2,000,000 SF of commercial real estate.

Mission StatementAt NavPoint Real Estate Group we strive to exceed the expectations of our clients by providing a clear route to success in every real estate transaction. We put people above profits and allow this philosophy to shape our success.

Vision Statement At NavPoint Real Estate Group our objective is to be known as one of the foremost experts in the business of Commercial Real Estate brokerage, property/asset management and consulting.

Matt CallPrincipal

Charlie DavisBrokerage Services

Jeff BrandonBrokerage Services

Michelle Rickman Transaction Coordinator

Holly SigdestadMarketing & Operations

Collin TedescoInvestment Analyst/Brokerage Services

Ian ElfnerBrokerage Services

Matt KulbeBrokerage Services

Gina LissAdministrative

Assistant

Emily Van Eps Marketing

Coordinator