Northern Colorado Office Market Summary:
- Direct vacancy rose to 6.5% at the end of Q2 2021, up 30 basis points since Q4 2020.
- Negative net absorption of 22,386 sq. ft. was recorded in H1 2021, marking a strong improvement from the negative 100,854 sq. ft. of annual net absorption recorded in 2020.
- Five projects totaling 116,737 sq. ft. were underway at the end of Q2 2021. Four buildings delivered in the first half of the year, bringing 87,248 sq. ft. of new product to the Northern Colorado office market.
- The direct average asking lease rate decreased 1.1% from H2 2020 to $15.90 per sq. ft. triple net.
- Investment sales volume increased marginally from the $41.4 million in H2 2020 to finish H1 2021 with $46.9 million or $187.46 per sq. ft. This puts the Northern Colorado office market on track to exceed the $80.9 million transacted in 2020 as investment sales activity rebounds.
Read the full report here.
Denver MOB & Colorado Springs Retail and Industrial
Metro Denver’s medical office building (MOB) market recorded strong fundamentals in the first half of 2021. Positive new absorption of 150,318 sq. ft. was recorded in H1 2021 with On-Campus space contributing to most of the absorption activity. Direct vacancy sat at 10.7% in H1 2021, a modest 28 basis points (bps) increase year-over- year, while overall availability was unchanged at 12.3%. The average direct asking rate rose to $30.68 per sq. ft. full service gross (FSG), a 5.4% increase since H1 2020. A total of 174,000 sq. ft. of newly constructed MOB space was delivered to the market in H1 2021 with 70.1% of the space already leased. The Denver MOB investment activity picked up momentum this year totaling $104.9 million in H1 2021, up 101.8% year-over-year.
Market Outlook:
The Denver medical office market picked up momentum in 2021. With absorptions rebounding sharply to pre-pandemic levels in the first half of 2021, the Denver medical office market will continue to flourish as owners realign their space needs and discuss future projects. Though economics are still driving transactions, there has been a flight to quality among tenants that is expected to continue over the next several quarters. The increased demand for healthcare properties is driving strong investor interest as seen by the increased sales activity in H1 2021 which is forecast to be even stronger throughout the balance of 2021 and beyond. While there has been some impact to the medical office market from the COVID-19 pandemic, the activity during the first half of 2021 showed resiliency and a necessity for healthcare space.
Download the Denver Medical Office MarketView H1 2021 report here.
- The Colorado Springs industrial market recorded an average direct asking lease rate of $10.45 per sq. ft. triple net (NNN) in H1 2021, a $0.32 increase from year-end 2020.
- Over 88,000 sq. ft. of positive net absorption was posted through the first half of 2021—more than twice the volume compared to H2 2020.
- The direct vacancy rate reached 4.3% in H1 2021, down 23 basis points (bps) from last half and down 40 bps year-over-year.
- Industrial space under construction rose slightly to 4.1 million sq. ft. in H1 2021. The volume continues to be largely tied up in the 3.7 million-sq.-ft. multi-level Amazon distribution and sorting facility at Peak Innovation Park. The project is estimated to deliver in Q3 2021.
- The Colorado Springs industrial market recorded $47.9 million in sales volume for properties priced at $1.0 million and above, almost identical to the figure posted in H1 2020, with an average price per sq. ft. of $88.66. After a near record setting sales year in 2020, sales volume is off to a solid start in 2021.
Download the full report here.
- Direct vacancy increased to 6.5% in H1 2021, up 10 basis points (bps) from year-end 2020.
- The Colorado Springs retail market posted positive net absorption of 279,622 sq. ft. through the first half of 2021, marking the first positive total in four quarters.
- Development remained active in H1 2021 with over 354,000 sq. ft. of retail space under construction and nearly 247,000 sq. ft. of deliveries.
- The average asking lease rate increased to $15.73 triple net (NNN), a $1.40 increase year-over-year.
- Investment sales activity climbed 19.6% year-over-year, recording $73.7 million in sales volume.
Download the full report here.
