Metro Denver/Boulder Office Market Report 4th Quarter 2017
W i l l i a m G a r y, M B A , M I M • P r i n c i p a l • 303-294-0277
w g a r y @ M a c L W. c o m • w w w . M a c L W. c o m
9 2 3 3 P a r k M e a d o w s D r i v e • S u i t e 1 5 5 • L o n e Tr e e , C O 8 0 1 2 4
Personal Profile William A. Gary, MBA, MIM Principal & Managing 100% Tenant/Buyer Representative Having successfully negotiated over 400 transactions during 29+ years in the industry, William Gary is a very, very experienced commercial estate professional. Described by his clients and peers as "direct, creative, organized and professional," Will has earned the wisdom that comes from having a diverse business background. Christopher P. Gallo of KPMG Peat Marwick noted that Will has "that rare quality of both detail and 'big picture' real estate expertise." With world-class learning experiences at Cushman & Wakefield, Frederick Ross Company (now Newmark Grubb Knight Frank), Iliff, Thorn & Company (now CBRE) and CoRE Partners, Will has pushed himself to learn his craft in the rough and tough arena of commercial real estate. Prior to entering commercial real estate, Will worked in Metro New York City in national brand advertising at Benton & Bowles (now Publicis) and in consumer goods marketing with Richardson-Vicks (now Procter & Gamble). Will has done a lot in the world of big-time, corporate business. A patient and detailed professional, Will prides himself in finding creative and effective solutions to problems. "He has a reputation of getting the job done, and done right," says Phil Dunne, Executive Director of the Texas Medical Foundation. With decades at the table as Tenant Rep, Will has honed his craft and become a very sharp, master negotiator. Superior negotiators are hard to find and Will has earned his stripes in this department. Will has received many honors in advertising and real estate. He received "Creative Deal of the Year" while at Cushman & Wakefield for a lease with Pet Expo, a pet superstore. The Flick Report named him to their "All-Star Line-Up" for transactions totaling 236,345 square feet. He has been a Commercial Broker in Austin, Texas, and in Metro Denver/Boulder, Colorado. Teresa Krieger, CFO of Applegate Group, a regional water resources engineering firm, said, “I have been working with William for over the past 10 years. He has been instrumental in finding us great new office space. He is an excellent negotiator and has very creative ideas when it comes to initial leases and lease renewals. William was also able to find a subtenant for some extra office space we had so that we could reduce our rental expenses until we relocated. He has so much knowledge in this area and is so effective, I will continue to use him and recommend him for commercial real estate transactions.” Performing at high levels for his clients is not new to Will. He won academic scholarships to attend Southern Methodist University (SMU) in Dallas, Texas, and graduated with honors in Economics and an MBA in Marketing. Will also earned a Master of International Management (MIM) with highest honors at the highly renowned Thunderbird School of Global Management in Phoenix/Glendale, Arizona. MacLaurin Williams strongly believes in giving back to the community and has completed pro bono Tenant Representation projects for Colorado Preservation, Inc., a Montessori charter school, Al-Anon Service Center, Family Resource Center Association and Bicycle Colorado. In his leisure time, Will enjoys road cycling and MacLaurin Williams has proudly sponsored two amateur cycling teams, Rocky Mountain Road Club ("RMRC") in conjunction with Turin Bicycles and also COBRAS.
Be Represented. Not brokered.™ Worldwide. 9233 Park Meadows Drive • Suite 155 • Lone Tree, CO USA 80124 • office +1 303.294.0277 • cell +1 303.901.1108
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Sole business is Tenant & Buyer Representation
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Only acts as true advocate for Occupiers
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Manages properties for Landlords
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Represents Landlords & Tenants in same transaction
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9233 Park Meadows Drive, Suite 155 • Lone Tree, CO USA 80124 • +1 303-294-0277 •
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Be Represented. Not brokered.™ Worldwide.
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Contact MacLaurin Williams • +1 303-294-0277 •
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Year-End 2017 – Denver
Denver Office Market Table of Contents Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C Market Highlights & Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CoStar Markets & Submarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Figures at a Glance by Class & Market Figures at a Glance by Class & Submarket Figures at a Glance Grouped by CBD vs Suburban Historical Figures at a Glance Leasing Activity Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Select Top Lease Transactions Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Aurora Market Boulder Market Broomfield Market Clear Creek County Market Colorado Blvd/Glendale Market Downtown Market Elbert County Market Fort Collins/Loveland Market Gilpin County Market Longmont Market Midtown Market North Denver Market Northeast Denver Market Northwest Denver Market Park County Market Parker/Castle Rock Market Southeast Denver Market Southwest Denver Market Weld County Market West Denver Market
©2018 CoStar Group, Inc.
CoStar Office Statistics
A
Denver – Year-End 2017
Denver Office Market Methodology The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group’s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's global database includes approximately 119 billion square feet of coverage in 5.4 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.
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© Copyright 2018 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc. 1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP B
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate.The Cap Rate is a calculation that reflects the relationship between one year’s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building.These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills,older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is,or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certifi©2018 CoStar Group, Inc.
cate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door,even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time,generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing,distribution,and maintenance facilities.The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different
CoStar Office Statistics
C
Denver – Year-End 2017
Denver Office Market tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant’s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time.
Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise,rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied.
Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy)
D
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Overview
Denver’s Vacancy Increases to 10.5% Net Absorption Positive 32,956 SF in the Quarter
T
he Denver Office market ended the fourth quarter 2017 with a vacancy rate of 10.5%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 32,956 square feet in the fourth quarter. Vacant sublease space increased in the quarter, ending the quarter at 1,906,860 square feet. Rental rates ended the fourth quarter at $26.32, an increase over the previous quarter. A total of 11 buildings delivered to the market in the quarter totaling 482,174 square feet, with 5,233,168 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Denver office market was positive 32,956 square feet in the fourth quarter 2017. That compares to positive 257,788 square feet in the third quarter 2017, positive 1,047,678 square feet in the second quarter 2017, and negative (165,073) square feet in the first quarter 2017. Tenants moving out of large blocks of space in 2017 include: DCP Midstream moving out of 157,676 square feet at 370 17th St; EKS&H moving out of 117,700 square feet at 7979 E Tufts Ave; and United Forest Service moving out of 96,780 square feet at 740 Simms St. Tenants moving into large blocks of space in 2017 include: Arrow Electronics moving into 227,000 square feet at 9151 E Panorama Cir; Comcast moving into 211,579 square feet at 7250 S Havana; and Agrium Advanced Technologies moving into 128,033 square feet at 5296 Harvest Lake Dr. The Class-A office market recorded net absorption of positive 205,114 square feet in the fourth quarter 2017, compared to positive 365,472 square feet in the third quarter 2017, posi-
Vacancy Rates by Class
tive 417,975 in the second quarter 2017, and negative (676,178) in the first quarter 2017. The Class-B office market recorded net absorption of negative (76,960) square feet in the fourth quarter 2017, compared to negative (122,480) square feet in the third quarter 2017, positive 599,628 in the second quarter 2017, and positive 471,414 in the first quarter 2017. The Class-C office market recorded net absorption of negative (95,198) square feet in the fourth quarter 2017 compared to positive 14,796 square feet in the third quarter 2017, positive 30,075 in the second quarter 2017, and positive 39,691 in the first quarter 2017. Net absorption for Denver’s central business district was positive 33,431 square feet in the fourth quarter 2017. That compares to positive 259,271 square feet in the third quarter 2017, positive 30,198 in the second quarter 2017, and negative (305,214) in the first quarter 2017. Net absorption for the suburban markets was negative (475) square feet in the fourth quarter 2017. That compares to negative (1,483) square feet in third quarter 2017, positive 1,017,480 in the second quarter 2017, and positive 140,141 in the first quarter 2017. Vacancy The office vacancy rate in the Denver market area increased to 10.5% at the end of the fourth quarter 2017. The vacancy rate was 10.3% at the end of the third quarter 2017, 10.5% at the end of the second quarter 2017, and 10.2% at the end of the first quarter 2017. Class-A projects reported a vacancy rate of 13.8% at the
1999-2017 A
B
C
Total Market
25%
Vacancy Rate
20%
15%
10%
5%
0% 1999 4q2000 4q 2001 4q2002 4q 2003 4q2004 4q 2005 4q2006 4q 2007 4q2008 4q2009 4q 2010 4q 2011 4q 2012 4q 2013 4q 2014 4q 2015 4q 2016 4q 20174 Source: CoStar Property®
Absorption & Deliveries
©2018 CoStar Group, Inc.
Past 10 Quarters
U.S. Vacancy Comparison
CoStar Office Statistics
Past 10 Quarters
1
Denver � Year-End 2017
Denver Office Market Overview
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end of the fourth quarter 2017, 13.6% at the end of the third quarter 2017, 13.9% at the end of the second quarter 2017, and 13.3% at the end of the first quarter 2017. Class-B projects reported a vacancy rate of 9.9% at the end of the fourth quarter 2017, 9.8% at the end of the third quarter 2017, 9.6% at the end of the second quarter 2017, and 9.6% at the end of the first quarter 2017. Class-C projects reported a vacancy rate of 4.1% at the end of the fourth quarter 2017, 3.9% at the end of third quarter 2017, 4.0% at the end of the second quarter 2017, and 4.1% at the end of the first quarter 2017. The overall vacancy rate in Denver’s central business district at the end of the fourth quarter 2017 decreased to 13.9%. The vacancy rate was 14.0% at the end of the third quarter 2017, 14.8% at the end of the second quarter 2017, and 14.7% at the end of the first quarter 2017. The vacancy rate in the suburban markets increased to 9.8% in the fourth quarter 2017. The vacancy rate was 9.6% at theTotal endMarket of the third quarter 2017, 9.4% at the end of the second quarter 2017, and 9.2% at the end of the first quarter 2017. Largest Lease Signings The largest lease signings occurring in 2017 included: the 333,929-square-foot lease signed by Encana Oil & Gas (USA), Inc. at Republic Plaza in the Downtown market; the 266,776-square-foot deal signed by Western Union at One Belleview Station in the Southeast Denver market; and the 257,744-square-foot lease signed by Charter Communications at Granite Place at Village Center in the Southeast Denver market.
Sublease Vacancy The amount of vacant sublease space in the Denver market increased 1,906,860 feet4q by2015 the4qend 07 4q2008 4q2009 4q 2010 4qto 2011 4q 2012 4qsquare 2013 4q 2014 2016of 4qthe 2017fourth 4 quarter 2017, from 1,806,780 square feet at the end of the third quarter 2017. There was 1,760,827 square feet vacant at the
U.S. Vacancy Comparison Past 10 Quarters Denver
United States
12.0%
Vacancy Rate
10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2015 3q
2016 1q
2016 3q
2017 1q
2017 3q
end of the second quarter 2017 and 1,788,014 square feet at the end of the first quarter 2017. Denver’s Class-A projects reported vacant sublease space of 1,302,640 square feet at the end of fourth quarter 2017, up from the 1,262,484 square feet reported at the end of the third quarter 2017. There were 1,237,669 square feet of sublease space vacant at the end of the second quarter 2017, and 1,226,093 square feet at the end of the first quarter 2017. Class-B projects reported vacant sublease space of 565,176 square feet at the end of the fourth quarter 2017, up from the 538,976 square feet reported at the end of the third quarter 2017. At the end of the second quarter 2017 there were 508,903 square feet, and at the end of the first quarter 2017 there were 546,231 square feet vacant. Class-C projects reported increased vacant sublease space from the third quarter 2017 to the fourth quarter 2017. Sublease vacancy went from 5,320 square feet to 39,044 square feet during that time. There was 14,255 square feet at the end of the second quarter 2017, and 15,690 square feet at the end of the first quarter 2017. Sublease vacancy in Denver’s central business district stood at 650,542 square feet at the end of the fourth quarter 2017. It was 671,039 square feet at the end of the third quarter 2017, 677,327 square feet at the end of the second quarter 2017, and 717,867 square feet at the end of the first quarter 2017. Sublease vacancy in the suburban markets ended the fourth quarter 2017 at 1,256,318 square feet. At the end of the third quarter 2017 sublease vacancy was 1,135,741 square feet, was 1,083,500 square feet at the end of the second quarter 2017, and was 1,070,147 square feet at the end of the first quarter 2017. Rental Rates The average quoted asking rental rate for available office space, all classes, was $26.32 per square foot per year at the end of the fourth quarter 2017 in the Denver market area. This represented a 1.3% increase in quoted rental rates from the end of the third quarter 2017, when rents were reported at $25.99 per square foot. The average quoted rate within the Class-A sector was $30.16 at the end of the fourth quarter 2017, while Class-B rates stood at $23.49, and Class-C rates at $19.80. At the end of the third quarter 2017, Class-A rates were $29.98 per square foot, Class-B rates were $23.15, and Class-C rates were $19.57. The average quoted asking rental rate in Denver’s CBD was $32.26 at the end of the fourth quarter 2017, and $24.78 in the suburban markets. In the third quarter 2017, quoted rates were $31.69 in the CBD and $24.59 in the suburbs. Deliveries and Construction During the fourth quarter 2017, 11 buildings totaling 482,174 square feet were completed in the Denver market
Source: CoStar Property®
2
CoStar Office Statistics
©2018 CoStar Group, Inc.
5% Year-End 2017 – Denver
Denver Office Market 0%
1999 4q2000 4q 2001 4q2002 4q 2003 4q2004 4q 2005 4q2006 4q 2007 4q20
Overview
Inventory Total office inventory in the Denver market area amounted to 202,018,262 square feet in 7,676 buildings as of the end of the fourth quarter 2017. The Class-A office sector consisted of 69,059,545 square feet in 380 projects. There were 4,016 Class-B buildings totaling 107,386,453 square feet, and the Class-C sector consisted of 25,572,264 square feet in 3,280 buildings. Within the Office market there were 585 owneroccupied buildings accounting for 24,808,354 square feet of office space. Sales Activity Tallying office building sales of 15,000 square feet or larger, Denver office sales figures fell during the third quarter 2017 in terms of dollar volume compared to the second quarter of 2017. In the third quarter, 23 office transactions closed with a total volume of $330,103,956. The 23 buildings totaled 1,511,616 square feet and the average price per square foot equated to $218.38 per square foot. That compares to 32 transactions
©2018 CoStar Group, Inc.
Absorption & Deliveries Past 10 Quarters Net Absorption
Deliveries
1.8 1.55
1.6 1.4
1.20
1.2 Millions SF
area. This compares to four buildings totaling 239,142 square feet that were completed in the third quarter 2017, 17 buildings totaling 1,552,501 square feet completed in the second quarter 2017, and 916,828 square feet in 13 buildings completed in the first quarter 2017. There were 5,233,168 square feet of office space under construction at the end of the fourth quarter 2017. Some of the notable 2017 deliveries include: One Belleview Station, a 318,000-square-foot facility that delivered in second quarter 2017 and is now 100% occupied, and Denver Health Administration, a 300,000-square-foot building that delivered in second quarter 2017 and is now 100% occupied. The largest projects underway at the end of fourth quarter 2017 were 1144 Fifteenth, a 670,000-square-foot building with 39% of its space pre-leased, and 16 Chestnut Building, a 428,219-square-foot facility that is 80% pre-leased.
Source: CoStar Property®
1.0
0.90
1.05
0.94
0.8
0.83
0.60
0.6 0.4
0.92
0.51
0.51
0.36
0.26 0.24
0.21
0.17
0.2
0.48
0.42
0.03
0.0 (0.2) (0.20)
(0.4) 2015 3q
2016 1q
2016 3q
(0.17) 2017 1q
2017 3q
Source: CoStar Property®
totaling $554,071,690 in the second quarter 2017. The total square footage in the second quarter was 2,232,598 square feet for an average price per square foot of $248.17. Total office building sales activity in 2017 was up compared to 2016. In the first nine months of 2017, the market saw 87 office sales transactions with a total volume of $1,271,810,441. The price per square foot averaged $216.50. In the same first nine months of 2016, the market posted 86 transactions with a total volume of $1,241,713,939. The price per square foot averaged $166.32. Cap rates have been higher in 2017, averaging 7.21% compared to the same period in 2016 when they averaged 7.19%. One of the largest transactions that has occurred within the last four quarters in the Denver market is the sale of 1125 Seventeenth Street in Denver. This 499,975-square-foot office building sold for $169,700,000, or $339.42 per square foot on 1/9/2017. Reports compiled by: Jeff Warnock, Research Manager.
CoStar Office Statistics
3
Denver � Year-End 2017
Denver Office Market Markets
CoStar Submarket Clusters & Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters
Submarkets
Aurora
Aurora
Boulder
Boulder
Broomfield
Broomfield County
Clear Creek County
Clear Creek County
Colorado Blvd/Glendale
Cherry Creek
Colorado Blvd/I-25
Glendale
LoDo*
Platte River
Downtown
CBD*
Elbert County
Elbert County
Fort Collins/Loveland
Fort Collins/Loveland
Gilpin County
Gilpin County
Longmont
Longmont
Midtown
Capitol Hill
North Denver
North Denver
Northeast Denver
East I-70/Montbello
Northwest Denver
Northwest Denver
Park County
Park County
Parker/Castle Rock
Parker/Castle Rock
Southeast Denver
Arapahoe Rd Greenwood Village Meridian
Southwest Denver
Southwest Denver
Weld County
Weld County
West Denver
West Denver
Boulder County
South Midtown Northeast Denver
Centennial Highlands Ranch Panorama/Highland Park
Denver Tech Center Inverness
East Hampden Lone Tree
* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.
4
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Inventory & development
Historical Deliveries Deliveries
18.0 16.0
1982 - 2017 Average Delivered SF
15.5
Millions of SF
14.0 12.0 9.6
9.1
10.0
8.5 8.6
8.2 8.0 6.0
4.7
4.0
2.5 2.3
2.0
1.8
1.4
0.4
1.9
5.6 3.7
3.3
2.7
2.9
2.6 1.9 2.0 2.3
3.6
3.1
0.9 0.5 0.6 0.5
2.2
1.6
2.4 0.8
1.7
1.2 1.1 1.3
0.0 1982 Source: CoStar Property®
1986
1990
1994
1998
2002
2006
2010
2014
* Future deliveries based on current under construction buildings.
Construction Activity
Markets Ranked by Under Construction Square Footage Average Bldg Size
Under Construction Inventory # Bldgs
Market
Total RBA
Preleased SF
Preleased %
All Existing
U/C
16
2,845,292
1,286,322
45.2%
101,540
177,831
Southeast Denver
5
900,929
487,005
54.1%
55,394
180,186
Boulder
6
301,216
121,303
40.3%
19,700
50,203
Northwest Denver
5
257,462
118,487
46.0%
14,633
51,492
Broomfield
2
255,588
79,000
30.9%
49,826
127,794
West Denver
2
201,000
196,580
97.8%
20,492
100,500
Colorado Blvd/Glendale
2
153,510
66,272
43.2%
29,527
76,755
Weld County
2
122,350
119,141
97.4%
9,760
61,175
Parker/Castle Rock
2
69,230
27,004
39.0%
12,173
34,615
Midtown
1
65,805
47,380
72.0%
13,580
65,805
All Other
3
60,786
50,586
83.2%
17,229
46
5,233,168
2,599,080
Downtown
Totals
49.7%
26,318
20,262 113,765
Source: CoStar Property®
Recent Deliveries
Future Deliveries
Leased & Un-Leased SF in Deliveries Since 2013
Preleased & Un-Leased SF in Properties Scheduled to Deliver
Leased
Un-Leased
Preleased
Un-Leased
2,500
3.5 3.0
2,000 Thousands of SF
2.0 1.5 1.0
1,500
T
Millions of SF
2.5
1,000
500 0.5 0
0.0 2013 Source: CoStar Property®
©2018 CoStar Group, Inc.
2015
2018 1q
2017
2018 3q
Source: CoStar Property®
CoStar Office Statistics
5
Denver � Year-End 2017
Denver Office Market Inventory & development
Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction Construction Starts
1.8
Deliveries 1.55
1.6 1.31
Millions of SF
1.4
1.28
1.2 0.94
1.0 0.8 0.6
1.02 0.94
0.90
0.92
0.87
0.71
0.66
0.540.51
0.53 0.34 0.27
0.4 0.2
1.32
1.26
0.45
0.40
0.51 0.42
0.35
0.23
0.48
0.44 0.24
0.17
0.11
0.31
0.15
0.02 0.0 2014 1q
2015 1q
2016 1q
2017 1q
Source: CoStar Property®
Recent Deliveries by Project Size Building Size
# Bldgs
< 50,000 SF
RBA
Breakdown of Year-to-Date Development Based on RBA of Project SF Leased
% Leased
Avg Rate
Single-Tenant
Multi-Tenant
30
356,179
251,977
70.7%
$24.37
81,751
274,428
50,000 SF - 99,999 SF
8
509,378
384,442
75.5%
$30.51
153,000
356,378
100,000 SF - 249,999 SF
8
1,454,031
1,077,463
74.1%
$36.74
766,708
687,323
250,000 SF - 499,999 SF
3
917,702
917,702
100.0%
$31.27
0
>= 500,000 SF
0
$0.00
0
0
0
0.0%
917,702 0
Source: CoStar Property®
Recent Development by Tenancy
Existing Inventory Comparison
Based on RBA Developed for Single & Multi Tenant Use
Based on Total RBA
2017 Deliveries
Currently Under Construction
By Class
13%
6%
31%
Multi
79%
94%
Single
Multi
Class A
Single
Source: CoStar Property®
6
21%
34%
53% 69%
By Space Type
Class B
Class C
Multi
Single
Source: CoStar Property®
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Inventory & development
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������� ������� � � ���� ��� ������������������ ������������������� ������������ ����������������������� ����������������
���� ������������������������������� ����������� ���������������� ����� ������� ���������� �� ������� � ���������� ���� ������������� ��� ��������������� ������������������ ������������ ������������������ ������������ ���������������������� ����������� ������������������������ ����������� ������������������������ �
������������������������
©2018 CoStar Group, Inc.
CoStar Office Statistics
7
Denver � Year-End 2017
Denver Office Market Inventory & development
����������������������������������������
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����� ����������������������������� ����������� �������� ����� ������� ���������� � ������� � ����������� ���� ������������� ��� ��������������� ������������������ ������������ ������������������� ������������ ��������������� ����������� ������������������� ����������� ��������������� �
����������������������� ����������� ���������������� ����� ������� ���������� � ������� � ����������� �� ������������� ������ ��������������� ������������������� ������������ ������������������� ������������ ���� ����������� ��������������������� ����������� ������������������� �
���� ������������ ����������� ����� ���������� ������� ����������� ������������� ��������������� ������������ ������������ ����������� ����������� �
���������������� ������� �� � �� ������ ������������������� ������������������� ���������������������������� ������� ������������������������ ���� ��������������������
����������� ����������� �
��������� ������� � � �� ���������� ������������������� ������������������ �������������������������� �������� ��� ���
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8
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Figures at a Glance
Class A Market Statistics
Year-End 2017
Existing Inventory
Vacancy
Market
# Blds
Aurora
14
2,158,414
195,435
Boulder
20
2,076,070
Broomfield
20
Clear Creek County
Total RBA
3,171,782
0
0
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
0
0
195,435
9.1%
(94,919)
172,348
207,237
10.0%
234,738
213,311
247,707
7.8%
88,440
0
0
0.0%
200,000 0
0
Quoted Rates $24.30
83,000
$33.34
255,588
$27.00
0
0
$0.00
Colorado Blvd/Glendale
25
4,108,444
678,062
737,058
17.9%
(3,697)
229,670
153,510
$32.50
Downtown
62
23,576,776
3,410,849
3,889,313
16.5%
62,564
457,653
2,661,052
$34.68
Elbert County Fort Collins/Loveland
0 18
0 1,080,791 0
0 95,477
Gilpin County
0
Longmont
1
106,336
Midtown
7
1,110,758
57,998
North Denver
5
706,944
20,884
0 105,583
0.0% 9.8%
0 85,122
0 128,033
0
0.0%
0
0
$0.00
0
0.0%
22,470
0
0
$24.91
57,998
5.2%
(51,934)
0
20,884
3.0%
0
796
6
556,545
100,324
100,324
18.0%
(60,078)
0
1,873,874
248,990
324,836
17.3%
(150,319)
0
4
Southeast Denver
150
0
0
0
229,056
17,600
17,600
23,869,463
2,682,108
3,252,984
Southwest Denver
5
1,241,467
Weld County
6
667,828
94,897
94,897
0
West Denver
20
2,524,997
221,687
Totals
380
69,059,545
8,209,970
0 260,754
0.0% 7.7%
65,805
0
17 0
$27.69
0
Northwest Denver Park County
$0.00
0
0
Northeast Denver
Parker/Castle Rock
0
0
$20.50
0
$26.50
200,000
0
$29.35
0
0
$25.57 $0.00
42,400
60,000
48,245
$26.26
13.6%
159,145
1,092,767
900,929
$26.44
7.6%
(26,575)
0.0% 10.3%
9,512,610 13.8%
0
0
0
0
$26.15
112,000
$26.70 $27.15
4,230
65,000
175,000
312,383
2,233,123
4,655,129
$30.16
Source: CoStar Property®
Class B Market Statistics
Year-End 2017
Existing Inventory
Absorption
Deliveries
Const SF
Quoted 0
167
6,089,082
560,860
569,524
9.4%
(75,391)
4,026
Boulder
548
12,236,507
1,124,328
1,200,586
9.8%
(82,578)
219,164
70
3,175,348
261,712
266,887
8.4%
79,257
0
0
5
41,618
1.4%
(600)
0
0
$17.07
0
0
$25.64
600
Vac %
Under
Aurora
600
Total SF
YTD
# Blds
Clear Creek County
Direct SF
YTD Net
Market
Broomfield
Total RBA
Vacancy
Colorado Blvd/Glendale
217
7,683,774
670,234
705,588
9.2%
(32,876)
Downtown
212
12,330,148
1,417,081
1,591,697
12.9%
(253,892)
61.5%
Elbert County Fort Collins/Loveland Gilpin County Longmont
4 524 1 88
19,455
11,964
11,964
7,496,844
487,474
504,730
7,400 1,212,172
0 39,453
0.0% 3.3%
(11,964) 189,398 0 7,556
0 177,278
184,240 0 3,200
$25.46 $25.22
$30.05 $0.00 $22.04
0
0
$0.00
0
0
$20.39
Midtown
213
185,602
185,602
4.1%
242,262
300,000
North Denver
104
3,311,327
298,051
309,754
9.4%
74,052
61,000
14,000
Northeast Denver
97
2,852,393
255,132
256,501
9.0%
(70,529)
18,702
43,586
$21.11
Northwest Denver
196
3,300,166
224,115
239,241
7.2%
118,072
19,000
57,462
$19.74
Park County
4
4,522,044
0 32,628
6.7%
64,878
218,216
Rates $17.35
18,064
Parker/Castle Rock
105
Southeast Denver
533
21,351,187
Southwest Denver
281
6,480,368
Weld County
294
3,500,575
West Denver Totals
1,573,577
0
0
0.0%
5,720
7.2%
64,602
2,555,795
12.0%
389,414
34,350
0
701,172
10.8%
137,412
22,426
0
170,035
4.9%
26,891
15,347
12.3%
64,796
9.9%
871,602
113,851
113,851
2,387,133 671,504 170,035
353
10,184,404
1,236,961
1,251,461
4,016
107,386,453
10,109,265
10,674,441
0
0
21,351
0 957,522
0 20,985
$24.31 $22.85
$0.00 $26.87 $22.29 $18.72
10,350
$18.66
26,000
$21.53
578,039
$23.49
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
9
Denver � Year-End 2017
Denver Office Market Figures at a Glance
Class C Market Statistics
Year-End 2017
Existing Inventory
Under
Absorption
Deliveries
Const SF
4.2%
36,059
0
0
125
1,228,406
Boulder
243
1,664,126
40,200
69,217
4.2%
(34,653)
0
0
$24.29
41
180,038
6,260
6,260
3.5%
(1,579)
0
0
$20.63
Colorado Blvd/Glendale Downtown Elbert County Fort Collins/Loveland Gilpin County
5
46,852
51,311
0
0
0
$0.00
2,115,130
185,395
185,510
8.8%
(86,692)
0
0
$19.60
98
1,865,793
57,885
57,885
3.1%
22,475
0
0
$24.22
17
37,572 2,216,942
600 56,276
0.0%
0
Rates $12.75
229
360
0
Vac %
Quoted
Aurora
51,311
Total SF
YTD
# Blds
Clear Creek County
Direct SF
YTD Net
Market
Broomfield
Total RBA
Vacancy
600
1.6%
5,734
0
0
$4.60
56,937
2.6%
97,317
0
0
$19.32
3
7,716
5,088
5,088
65.9%
(5,088)
0
0
$0.00
97
643,719
23,606
23,606
3.7%
1,511
0
0
$17.25
457
3,561,135
128,114
129,114
3.6%
(47,607)
0
0
$26.97
57
377,628
7,553
7,553
2.0%
(1,324)
0
0
$13.93
Northeast Denver
144
1,515,974
50,843
50,843
3.4%
(18,623)
0
0
$15.46
Northwest Denver
251
1,615,447
73,887
73,887
4.6%
9,879
0
0
$22.42
1.1%
3,158
0
0
$8.00
3.2%
1,776
0
0
$20.13
Longmont Midtown North Denver
Park County
10
30,432
Parker/Castle Rock
69
364,207
11,043
11,493
342
342
Southeast Denver
174
2,252,099
115,825
116,475
5.2%
(41,903)
0
0
$16.92
Southwest Denver
265
1,986,453
66,155
66,155
3.3%
22,341
0
0
$16.49
Weld County
265
1,346,103
18,600
18,600
1.4%
13,835
0
0
$10.84
West Denver
370
2,516,492
98,530
105,681
4.2%
12,748
0
0
$16.13
3,280
25,572,264
1,036,557
4.1%
(10,636)
Totals
997,513
0
0
$19.80
Source: CoStar Property®
Total Office Market Statistics
Year-End 2017
Existing Inventory Market
# Blds
Aurora
306
9,475,902
807,606
816,270
Boulder
811
15,976,703
1,336,876
Broomfield
131
6,527,168
481,283
Clear Creek County
10
Total RBA
Vacancy
88,470
Direct SF
600
Total SF
Vac %
YTD Net
YTD
Under
Absorption
Deliveries
Const SF 0
8.6%
(134,251)
4,026
1,477,040
9.2%
117,507
419,164
520,854
8.0%
166,118
600
0.7%
(600)
0 0
Quoted Rates $19.31
301,216
$26.61
255,588
$26.20
0
$17.07
Colorado Blvd/Glendale
471
13,907,348
1,533,691
1,628,156
11.7%
(123,265)
229,670
153,510
$27.97
Downtown
372
37,772,717
4,885,815
5,538,895
14.7%
(168,853)
522,531
2,845,292
$33.26
12,564
12,564
22.0%
(6,230)
639,227
667,250
6.2%
371,837
Elbert County Fort Collins/Loveland Gilpin County
21 902 4
57,027 10,794,577
0 305,311
0 3,200
$4.60 $22.17
15,116
5,088
5,088
33.7%
(5,088)
0
0
$0.00
1,962,227
56,234
63,059
3.2%
31,537
0
0
$21.45
371,714
372,714
4.1%
142,721
338,191
7.7%
73,524
Longmont
186
Midtown
677
9,193,937
North Denver
166
4,395,899
326,488
300,000
65,805
$25.72
61,000
14,000
$22.20
Northeast Denver
247
4,924,912
406,299
407,668
8.3%
(149,230)
18,702
43,586
$22.56
Northwest Denver
464
6,789,487
546,992
637,964
9.4%
(22,368)
19,000
257,462
$23.18
Park County
14
48,496
342
342
0.7%
8,878
6.6%
108,778
81,351
0
69,230
$26.10
12.5%
506,656
1,127,117
900,929
$24.40
Parker/Castle Rock
178
2,166,840
142,494
142,944
Southeast Denver
857
47,472,749
5,185,066
5,925,254
Southwest Denver
551
9,708,288
832,556
862,224
8.9%
133,178
22,426
Weld County
565
5,514,506
188,635
188,635
3.4%
40,726
15,347
1,617,896
10.6%
West Denver Totals
743
15,225,893
1,557,178
7,676
202,018,262
19,316,748
21,223,608 10.5%
81,774 1,173,349
0
0
$8.00
$19.11
122,350
$18.09
65,000
201,000
$21.87
3,190,645
5,233,168
$26.32
Source: CoStar Property®
10
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Figures at a Glance
Class A Submarket Statistics
Year-End 2017
Existing Inventory Market Arapahoe Rd
# Blds
Vacancy
Total RBA
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
Quoted Rates
1
175,000
9,494
9,494
5.4%
(4,122)
0
0
$0.00
Aurora
14
2,158,414
195,435
195,435
9.1%
(94,919)
0
0
$24.30
Boulder
13
1,506,639
89,236
124,125
8.2%
293,529
7
569,431
83,112
83,112
14.6%
(58,791)
0
20
3,171,782
213,311
247,707
7.8%
88,440
0
4
858,723
57,998
57,998
6.8%
(51,934)
0
3,079,471
16.5%
8,567
0
131,665
23.3%
(131,665)
0
153,271
14.6%
17,106
0
Boulder County Broomfield County Capitol Hill CBD
83,000 0 255,588 0
$24.83 $27.00 $29.35
18,627,140
Centennial
3
565,000
Cherry Creek
9
1,051,356
Clear Creek County
0
Colorado Blvd/I-25
7
1,474,924
335,981
389,483
26.4%
(32,304)
229,670
Denver Tech Center
41
8,031,457
1,229,295
1,328,214
16.5%
323,740
617,702
East Hampden
5
650,996
171,839
171,839
26.4%
(37,805)
0
0
$20.18
East I-70/Montbello
5
500,545
100,324
100,324
20.0%
(60,078)
0
0
$26.50
Elbert County
0
0
0
$0.00
0
$27.69
0
0
$0.00
0
$23.63
Fort Collins/Lovelan.
18
0 1,080,791
151,859
0
0
0
0
95,477
0.0% 9.8%
0
0 85,122
0
128,033
0
Glendale
9
1,582,164
190,222
194,304
12.3%
11,501
0
Greenwood Village
18
3,845,022
331,611
350,654
9.1%
(61,133)
0
Highlands Ranch
10
1,310,809
46,646
126,845
9.7%
(43,845)
0
Inverness
19
2,327,926
426,361
450,610
19.4%
192,900
248,065
LoDo
18
3,268,023
201,306
266,591
8.2%
169,345
235,002
Lone Tree
18
2,261,285
100,116
106,227
4.7%
58,724
Longmont
1
106,336
0.0%
20
2,717,473
178,223
385,507
14.2%
North Denver
5
706,944
20,884
20,884
3.0%
Northeast Denver
1
56,000
Northwest Denver
17
1,873,874
248,990
324,836
17.3%
(150,319)
Panorama/Highland Pa.
15
1,984,495
188,523
191,929
9.7%
79,787
0
0
0
0
0
0
0.0%
0.0%
0
$24.91
0
0
$20.50
0
0
$0.00
796 0
0 227,000
543,251
543,251
32.3%
(115,348)
222,651
South Midtown
3
252,035
Southwest Denver
5
1,241,467
Weld County
6
667,828
West Denver
20
2,524,997
221,687
Totals
380
69,059,545
8,209,970
260,754
10.3%
9,512,610 13.8%
$26.61
0
1,681,613
0.0%
337,929
$23.19
0
10
0
0
$26.80
(217,436)
60,000
0
306,000
$27.62
$24.91
42,400
7.6%
257,000
0
7.7%
94,897
$31.83
0
17,600
94,897
0
22,470
17,600
0.0%
$0.00
$28.38
229,056
0
0
0
4
0
$41.65
0
Parker/Castle Rock
0.0%
153,510
$0.00
$40.48
0
0
0
$33.40
0
Park County
Platte River
0
0
105,583
0.0%
Gilpin County
Meridian
0
0
770,303
$40.50
34
0
2,666,292
200,000
0
0 (26,575) 0
0
0 0 0
200,000
$25.57
0
$25.42
0
$0.00
48,245
$26.26
1,890,749
$39.70
65,805 0
$0.00 $26.15
112,000
$26.70 $27.15
4,230
65,000
175,000
312,383
2,233,123
4,655,129
$30.16
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
11
Denver � Year-End 2017
Denver Office Market Figures at a Glance
Class B Submarket Statistics
Year-End 2017
Existing Inventory Market Arapahoe Rd
# Blds
Total RBA
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
Quoted
0
0
$21.85
0
$17.35
Rates
37
1,054,951
35,562
35,562
3.4%
5,857
Aurora
167
6,089,082
560,860
569,524
9.4%
(75,391)
4,026
Boulder
387
8,896,110
703,103
761,408
8.6%
(29,509)
120,200
62,352
$26.30
Boulder County
161
3,340,397
421,225
439,178
13.1%
(53,069)
98,964
155,864
$23.70
Broomfield County
70
3,175,348
261,712
266,887
8.4%
79,257
0
0
$25.22
142
2,915,315
107,775
107,775
3.7%
(34,074)
0
0
$21.91
896,878
1,030,300
14.0%
(216,498)
0
0
$26.85
Capitol Hill CBD
69
7,346,658
Centennial
69
2,560,599
Cherry Creek
60
Clear Creek County
5
1,548,115 41,618
Colorado Blvd/I-25
104
3,131,360
Denver Tech Center
53
3,388,405
East Hampden
75
East I-70/Montbello Elbert County Fort Collins/Lovelan. Gilpin County
182,152
194,057
7.6%
(28,838)
0
0
$20.02
140,465
151,378
9.8%
(16,831)
0
0
$31.78
1.4%
(600)
0
0
$17.07
600
327,221
10.4%
(54,086)
0
0
$22.32
545,633
550,375
16.2%
206,849
0
0
$23.79
2,298,545
189,556
192,387
8.4%
51,218
0
0
$16.18
44
1,984,629
91,316
92,685
4.7%
27,043
5,000
4
19,455
11,964
11,964
61.5%
(11,964)
7,496,844
487,474
504,730
524 1
7,400
315,511
600
0
0
6.7% 0.0%
189,398 0
0 177,278
43,586 0 3,200
$20.82 $0.00 $22.04
0
0
$0.00
Glendale
53
3,004,299
214,258
226,989
7.6%
38,041
0
0
$26.60
Greenwood Village
99
4,908,371
718,803
793,942
16.2%
101,464
0
0
$22.46
Highlands Ranch
28
882,679
84,631
84,631
9.6%
(11,529)
0
0
$26.22
Inverness
85
3,295,617
471,062
518,538
15.7%
30,958
9,350
0
$22.14
106
3,820,399
365,451
404,107
10.6%
23,961
53,478
Lone Tree
43
850,579
55,164
55,164
6.5%
61,133
25,000
Longmont
88
1,212,172
32,628
39,453
3.3%
7,556
Meridian
13
602,498
36,268
44,490
7.4%
6,351
104
3,311,327
298,051
309,754
9.4%
74,052
61,000
Northeast Denver
53
867,764
163,816
163,816
18.9%
(97,572)
13,702
Northwest Denver
196
3,300,166
224,115
239,241
7.2%
118,072
19,000
31
1,508,943
68,302
86,649
5.7%
(34,049)
4
18,064
LoDo
North Denver
Panorama/Highland Pa. Park County Parker/Castle Rock
0
0
0.0%
5,720
44,240
$33.93
0
$30.18
0
0
$20.39
0
0
$23.94
14,000 0 57,462
$22.85 $21.88 $19.74
0
0
$22.27
0
0
$0.00
105
1,573,577
113,851
113,851
7.2%
64,602
21,351
20,985
$26.87
Platte River
37
1,163,091
154,752
157,290
13.5%
(61,355)
11,400
140,000
$37.28
South Midtown
71
1,606,729
77,827
77,827
4.8%
276,336
300,000
0
$26.13
Southwest Denver
281
6,480,368
671,504
701,172
10.8%
137,412
22,426
0
$18.72
Weld County
294
3,500,575
170,035
170,035
4.9%
26,891
15,347
West Denver
353
10,184,404
1,236,961
4,016
107,386,453
10,109,265
Totals
1,251,461 12.3% 10,674,441
9.9%
64,796 871,602
0 957,522
10,350
$18.66
26,000
$21.53
578,039
$23.49
Source: CoStar Property®
12
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Figures at a Glance
Class C Submarket Statistics
Year-End 2017
Existing Inventory Market Arapahoe Rd
# Blds 39
Total RBA
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
504,175
38,915
38,915
7.7%
(4,609)
0
0
$16.40
51,311
4.2%
36,059
0
0
$12.75
Aurora
125
1,228,406
51,311
Boulder
183
1,357,137
25,241
54,258
4.0%
(24,585)
0
0
$24.78
Boulder County
60
306,989
14,959
14,959
4.9%
(10,068)
0
0
$20.44
Broomfield County
41
180,038
6,260
6,260
3.5%
(1,579)
0
0
$20.63
285
2,151,968
121,077
122,077
5.7%
(97,247)
0
0
$26.32
CBD
29
1,125,758
21,649
21,649
1.9%
29,175
0
0
$20.42
Centennial
15
377,635
0
0
$0.00
Cherry Creek
49
421,647
0
0
$31.69
Clear Creek County
5
46,852
0
0
$0.00
Colorado Blvd/I-25
133
1,241,127
133,966
134,081
10.8%
0
0
$18.20
Denver Tech Center
12
183,388
5,044
5,044
2.8%
(744)
0
0
$17.64
East Hampden
62
576,761
26,696
27,346
4.7%
(6,532)
0
0
$16.32
East I-70/Montbello
33
523,250
10,951
10,951
2.1%
(6,718)
0
0
$13.25
Elbert County
17
37,572
600
600
1.6%
5,734
0
0
$4.60
360
2,216,942
56,276
56,937
2.6%
97,317
0
0
$19.32
Capitol Hill
Fort Collins/Lovelan. Gilpin County
0
0
23,420
23,420 0
0
0.0% 5.6% 0.0%
0 (2,695) 0 (91,794)
3
7,716
5,088
5,088
65.9%
(5,088)
0
0
$0.00
Glendale
47
452,356
28,009
28,009
6.2%
7,797
0
0
$14.86
Greenwood Village
18
194,995
36,539
36,539
18.7%
(33,967)
0
0
$19.38
Highlands Ranch
2
16,633
1,500
1,500
9.0%
(1,500)
0
0
$0.00
Inverness
5
79,735
0
0
$0.00
31
461,087
0
0
$31.14
Lone Tree
3
10,707
0
0
$0.00
Longmont
97
643,719
0
0
$17.25
2
91,117
0
0
$0.00
North Denver
57
377,628
7,553
7,553
2.0%
(1,324)
0
0
$13.93
Northeast Denver
111
992,724
39,892
39,892
4.0%
(11,905)
0
0
$16.40
Northwest Denver
251
1,615,447
73,887
73,887
4.6%
9,879
0
0
$22.42
Panorama/Highland Pa.
16
216,953
7,131
7,131
3.3%
5,449
0
0
$16.68
Park County
10
30,432
342
342
1.1%
3,158
0
0
$8.00
Parker/Castle Rock
69
364,207
11,043
11,493
3.2%
1,776
0
0
$20.13
Platte River
38
278,948
20,250
20,250
7.3%
(9,836)
0
0
$25.18
South Midtown
172
1,409,167
7,037
7,037
0.5%
49,640
0
0
$27.76
Southwest Denver
265
1,986,453
66,155
66,155
3.3%
22,341
0
0
$16.49
Weld County
265
1,346,103
18,600
18,600
1.4%
13,835
0
0
$10.84
West Denver
370
2,516,492
98,530
105,681
4.2%
12,748
0
0
$16.13
3,280
25,572,264
1,036,557
4.1%
(10,636)
LoDo
Meridian
Totals
0
0
15,986 0
15,986 0
23,606 0
23,606 0
997,513
0.0% 3.5% 0.0% 3.7% 0.0%
0 3,136 0 1,511 0
0
0
$19.80
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
13
Denver � Year-End 2017
Denver Office Market Figures at a Glance
Total Office Submarket Statistics Existing Inventory Market Arapahoe Rd
# Blds
Total RBA
Year-End 2017
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
0
0
$19.60
0
$19.31
77
1,734,126
83,971
83,971
4.8%
(2,874)
Aurora
306
9,475,902
807,606
816,270
8.6%
(134,251)
Boulder
583
11,759,886
817,580
939,791
8.0%
239,435
320,200
145,352
$27.97
Boulder County
228
4,216,817
519,296
537,249
12.7%
(121,928)
98,964
155,864
$23.88
Broomfield County
131
6,527,168
481,283
520,854
8.0%
166,118
0
255,588
$26.20
Capitol Hill
431
5,926,006
286,850
287,850
4.9%
(183,255)
0
CBD
132
27,099,556
3,584,819
4,131,420
15.2%
(178,756)
0
Centennial
87
3,503,234
182,152
325,722
9.3%
(160,503)
0
Cherry Creek
118
3,021,118
315,744
328,069
10.9%
(2,420)
0
Clear Creek County
10
88,470
0.7%
(600)
0
Colorado Blvd/I-25
244
5,847,411
785,458
850,785
14.5%
(178,184)
229,670
Denver Tech Center
106
11,603,250
1,779,972
1,883,633
16.2%
529,845
617,702
East Hampden
142
3,526,302
388,091
391,572
11.1%
6,881
East I-70/Montbello
82
3,008,424
202,591
203,960
6.8%
(39,753)
5,000
Elbert County
21
57,027
12,564
12,564
22.0%
(6,230)
0
639,227
667,250
6.2%
371,837
33.7%
(5,088)
0
0
$0.00
8.9%
57,339
0
0
$24.77
6,364
0 0
Fort Collins/Lovelan. Gilpin County
902
10,794,577
4
15,116
600
5,088
Glendale
109
5,038,819
432,489
Greenwood Village
135
8,948,388
1,086,953
Highlands Ranch
40
2,210,121
600
5,088 449,302
1,181,135 13.2%
132,777
212,976
9.6%
(56,874)
4,026
0
305,311
0 770,303 0 153,510
$25.01 $31.83 $20.02 $36.99
0
$17.07
0
$25.78
257,000 0 43,586 0 3,200
306,000 0
$26.45 $17.91 $23.15 $4.60 $22.17
$24.09 $24.41
Inverness
109
5,703,278
897,423
969,148
17.0%
223,858
257,415
337,929
$24.22
LoDo
155
7,549,509
582,743
686,684
9.1%
196,442
288,480
44,240
$35.31
25,000
Lone Tree
64
3,122,571
155,280
161,391
5.2%
119,857
Longmont
186
1,962,227
56,234
63,059
3.2%
31,537
35
3,411,088
214,491
429,997
12.6%
(211,085)
North Denver
166
4,395,899
326,488
338,191
7.7%
73,524
61,000
Northeast Denver
165
1,916,488
203,708
203,708
10.6%
(109,477)
13,702
Northwest Denver
464
6,789,487
546,992
637,964
9.4%
(22,368)
19,000
Panorama/Highland Pa.
62
3,710,391
263,956
285,709
7.7%
51,187
227,000
Park County
14
48,496
0.7%
8,878
Meridian
Parker/Castle Rock
342
342
0
$29.61
0
0
$21.45
0
0
$24.69
0
14,000 0 257,462
$22.20 $20.36 $23.18
0
$23.76
0
$8.00
178
2,166,840
142,494
142,944
6.6%
108,778
81,351
69,230
$26.10
85
3,123,652
718,253
720,791
23.1%
(186,539)
234,051
2,030,749
$38.63
South Midtown
246
3,267,931
84,864
84,864
2.6%
325,976
300,000
65,805
$26.56
Southwest Denver
551
9,708,288
832,556
862,224
8.9%
133,178
22,426
Weld County
565
5,514,506
188,635
188,635
3.4%
40,726
15,347
122,350
$18.09
West Denver
743
15,225,893
1,557,178
1,617,896
10.6%
81,774
65,000
201,000
$21.87
7,676
202,018,262
19,316,748
3,190,645
5,233,168
Platte River
Totals
21,223,608 10.5%
1,173,349
0
$19.11
$26.32
Source: CoStar Property®
14
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Figures at a Glance
Class A Market Statistics
Year-End 2017
Existing Inventory Market CBD
Suburban Totals
# Blds
Total RBA
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
52
21,895,163
2,867,598
3,346,062
15.3%
177,912
235,002
328
47,164,382
5,342,372
6,166,548
13.1%
134,471
1,998,121
69,059,545
8,209,970
13.8%
312,383
2,233,123
380
9,512,610
770,303
$33.67
3,884,826
$28.52
4,655,129
$30.16
Source: CoStar Property®
Class B Market Statistics
Year-End 2017
Existing Inventory Market CBD
# Blds 175
Total RBA 11,167,057
Vacancy Direct SF
Total SF
Vac %
1,262,329
1,434,407
12.8%
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
(192,537)
53,478
44,240
$29.12
904,044
533,799
$22.72
Suburban
3,841
96,219,396
8,846,936
9,240,034
9.6%
1,064,139
Totals
4,016
107,386,453
10,109,265
10,674,441
9.9%
871,602
957,522
578,039
$23.49
Source: CoStar Property®
Class C Market Statistics
Year-End 2017
Existing Inventory Market CBD
Suburban Totals
# Blds
Total RBA
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
60
1,586,845
37,635
37,635
2.4%
32,311
0
0
$23.15
3,220
23,985,419
959,878
998,922
4.2%
(42,947)
0
0
$19.71
1,036,557
4.1%
3,280
25,572,264
997,513
(10,636)
0
0
$19.80
Source: CoStar Property®
Class A & B Market Statistics
Year-End 2017
Existing Inventory Market CBD
# Blds
Total RBA
Vacancy Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
227
33,062,220
4,129,927
4,780,469
14.5%
(14,625)
288,480
814,543
$32.32
Suburban
4,169
143,383,778
14,189,308
15,406,582
10.7%
1,198,610
2,902,165
4,418,625
$25.10
Totals
4,396
176,445,998
18,319,235
11.4%
1,183,985
3,190,645
5,233,168
20,187,051
$26.64
Source: CoStar Property®
Total Office Market Statistics
Year-End 2017
Existing Inventory Market CBD
Suburban Totals
# Blds 287
7,389 7,676
Total RBA
Vacancy
YTD Net
YTD
Under
Quoted
Deliveries
Const SF
Rates
Direct SF
Total SF
Vac %
Absorption
34,649,065
4,167,562
4,818,104
13.9%
17,686
167,369,197
15,149,186
16,405,504
202,018,262
19,316,748
21,223,608
288,480
814,543
$32.26
$24.78
9.8%
1,155,663
2,902,165
4,418,625
10.5%
1,173,349
3,190,645
5,233,168
$26.32
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
15
Denver � Year-End 2017
Denver Office Market Figures at a Glance
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����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� �����������
������ ������ ������ ������ ����� ����� ����� ����� ����� ������ ������ ������ ������ ������ ������ ������
���������� �������� ��������� ����������� ����������� ��������� ����������� ��������� ��������� ����������� ����������� ����������� ����������� ����������� ����������� ��������� ���������
���������� ������ ��� �� ��� ��� �� ��� ��� �� ��� ��� ��� ��� ��� ��� ��� ���
��������� �������� �������� ���������� �������� �������� �������� �������� �������� ���������� ���������� ���������� ���������� �������� ���������� ���������� ����������
������������ ������ ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ���
��������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� �������� ���������� ����������
������ ����� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ���������
������������������������
16
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Leasing Activity
Historical Rental Rates Based on Full-Service Equivalent Rental Rates A
B
C
Total Market
$35.00
$30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 1999 4q
2001 4q
2003 4q
2005 4q
2007 4q
2009 4q
2011 4q
2013 4q
2015 4q
2017 4q
Source: CoStar Property®
Vacancy by Available Space Type
Vacancy by Class
Percent of All Vacant Space in Direct vs. Sublet
Percent of All Vacant Space by Class
Denver
United States
9%
Denver
5%
United States
13%
5% 50% 45%
42%
45% 91%
Direct
95%
Sublet
Direct
Sublet
Source: CoStar Property®
Class A
Class B
Class C
Class A
Class B
Class C
Source: CoStar Property®
U.S. Rental Rate Comparison
Future Space Available
Based on Full-Service Equivalent Rental Rates
Space Scheduled to be Available for Occupancy*
Denver
United States
$30.00
4.0
3.50
3.5
$25.00
3.0
$20.00
2.33
2.5 2.0
$15.00
1.5 $10.00
1.0 $5.00
0.5
$0.00
0.0 2015 3q
Source: CoStar Property®
©2018 CoStar Group, Inc.
2016 3q
0.51 0.00 2018 1q
2017 3q
* Includes Under Construction Spaces
CoStar Office Statistics
2018 3q
0.00
0.00
2019 1q
Source: CoStar Property®
17
Denver � Year-End 2017
Denver Office Market Leasing Activity
Select Top O�ce Leases
Based on Leased Square Footage For Deals Signed in 2017
Building
Submarket
SF
Qtr
Tenant Name
Tenant Rep Company
Landlord Rep Company
1
Republic Plaza*
CBD
333,929
1st
Encana Oil & Gas (USA), Inc.
JLL
JLL
2
One Belleview Station
Denver Tech Center
266,776
3rd
Western Union
Avison Young
Cushman & Wake�eld
3
Granite Place at Village Center
Denver Tech Center
257,744
1st
Charter Communications
N/A
Colliers International
4
INOVA Dry Creek 2
Inverness
141,736
3rd
The Travelers Companies, Inc.
JLL
Newmark Knight Frank
5
Denver Place
CBD
90,217
1st
Vertafore
CBRE
CBRE
6
7979 E Tufts Ave
Denver Tech Center
85,547
4th
Western Union
N/A
Newmark Knight Frank
7
Lansing Point
Meridian
83,001
2nd
Catholic Health Initiatives
Direct Deal
Direct Deal
8
Coal Creek Business Park 1
Boulder County
76,223
4th
Medtronic Inc
N/A
CBRE
9
1801 California*
CBD
74,421
1st
DOJ
N/A
Cushman & Wake�eld
10
Circle Point I
Northwest Denver
71,464
4th
N/A
Cushman & Wake�eld
Cushman & Wake�eld
11
Corporex Center
Inverness
66,809
4th
Performance Food Group
N/A
RISE Commercial Real Estate Advisor
12
4100 E Arkansas Ave*
Colorado Blvd/I-25
63,000
3rd
AAA Colorado, Inc
RE/MAX Commercial Alliance
Direct Deal
13
4100 E Arkansas Ave
Colorado Blvd/I-25
63,000
3rd
The Green Solution
N/A
Direct Deal
14
Landmark Corporate Center
Greenwood Village
62,124
2nd
Air Methods Corp
N/A
Cushman & Wake�eld
15
Cascades
Greenwood Village
61,153
2nd
National Cinemedia
Newmark Knight Frank
Colliers International
16
Church Ranch Corp Center - Bldg 2
Northwest Denver
55,004
2nd
Staples
N/A
CBRE
17
City Center
CBD
51,377
2nd
Marketo
CBRE
JLL
18
101 W Colfax Ave
CBD
46,125
2nd
City and County of Denver
N/A
JLL
19
1821 30th St
Boulder
45,598
1st
Zayo Group
N/A
The Macerich Company
20
1601 Wewatta St
Platte River
44,416
1st
Delloite
N/A
Cushman & Wake�eld
21
1401 Lawrence St
CBD
44,020
2nd
Jagged Peak Energy
N/A
Newmark Knight Frank
22
1800 Wazee St.
LoDo
42,635
2nd
CTRL Collective
N/A
Newmark Knight Frank
23
Two Maroon Circle
Meridian
42,149
4th
Zynex Medical
Savills Studley
RISE Commercial Real Estate Advisor
24
Granite Place at Village Center
Denver Tech Center
41,958
2nd
CSG Systems
N/A
Colliers International
25
Coal Creek Business Park 2
Boulder County
40,511
4th
N/A
N/A
CBRE
26
1801 California
CBD
38,356
2nd
Ibotta
Tributary Real Estate; JLL
Cushman & Wake�eld
27
Johns Manville Plaza
CBD
38,231
2nd
Evolve Vacation Network
N/A
JLL
28
3333 Walnut St.
Boulder
32,773
2nd
Google
CBRE
JLL
29
400 Centennial Pky*
Boulder County
32,699
3rd
Uber Technologies, Inc
JLL
Keys Commercial
30
Creekside Business Park - Bldg 1*
Boulder County
31,183
1st
Pharmerica
N/A
Magi RE Services
31
Jackson National Life
Denver Tech Center
30,502
3rd
Zoom
CBRE
Cushman & Wake�eld
32
2620 E Prospect Rd
Fort Collins/Loveland
30,227
2nd
N/A
Colliers International
CBRE
33
1144 Fifteenth
CBD
30,000
4th
Greenberg Traurig LLP
N/A
JLL
34
The Circa
Platte River
29,989
4th
Xero
JLL
JLL
35
Circle Point Corporate Center II
Northwest Denver
29,731
2nd
Swisslog Healthcare Solutions
JLL
Cushman & Wake�eld
36
Waterview III
Panorama/Highland Park
29,414
4th
N/A
N/A
Transwestern
37
FlatIrons North - Bldg B
Boulder
29,369
3rd
N/A
N/A
The W.W. Reynolds Companies, Inc.
38
Boulder High Point
Boulder
28,463
3rd
N/A
N/A
The W.W. Reynolds Companies, Inc.
39
Peakview Tower
Greenwood Village
27,674
1st
N/A
N/A
Cresa
Source: CoStar Property®
* Renewal 18
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market Sales Activity
The Optimist Sales Index
Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter Price/SF
$630
7.0%
$580
6.0%
$530
5.0%
$480
4.0% $430
3.0%
Dollars/SF
Cap Rate Percentage
Cap Rate
8.0%
$380
2.0%
$330
1.0% 0.0%
$280 2014 4q
2015 4q
2016 4q
Source: CoStar COMPS®
Sales Volume & Price
Sales Analysis by Building Size
Based on Office Building Sales of 15,000 SF and Larger
Based on Office Building Sales From Oct. 2016 - Sept. 2017
Sales Volume
Bldg Size
Price/SF
#
RBA
$ Volume
Price/SF Cap Rate
$300
$900 $250
$800 $700
< 50,000 SF
206 2,762,415
$462,556,586
$ 167.45
7.41%
50K-249K SF
46 5,484,514
$1,196,712,246
$ 218.20
7.24%
1,264,651
$313,350,000
$ 247.78
6.20%
2 1,181,946
$189,800,000
$ 160.58
6.75%
$200
$600 $500
$150
Price/SF
Millions of Sales Volume Dollars
$1,000
$400 $100
$300 $200
250K-499K SF
3
$50
$100 $0 2014 1q
$0 2015 1q
2016 1q
>500K SF
2017 1q
Source: CoStar COMPS®
Source: CoStar COMPS®
U.S. Price/SF Comparison
U.S. Cap Rate Comparison
Based on Office Building Sales of 15,000 SF and Larger
Based on Office Building Sales of 15,000 SF and Larger
$310
Denver
Denver
US
$290
8.0% Cap Rate Percentage
$270 Dollars per SF
US
9.0%
$250 $230 $210 $190
7.0% 6.0% 5.0% 4.0%
$170 3.0%
$150 $130 2014 1q Source: CoStar COMPS®
©2018 CoStar Group, Inc.
2.0% 2015 1q
2016 1q
2017 1q
2014 1q
2015 1q
2016 1q
2017 1q
Source: CoStar COMPS®
CoStar Office Statistics
19
Denver � Year-End 2017
Denver Office Market Sales Activity
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20
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market A u r o r a
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.150
Historical Analysis, All Classes Absorption SF
Vacancy
16.0% 14.0% 12.0% 10.0%
0.050
8.0% 0.000
6.0%
Percent Vacant
Millions SF
0.100
4.0%
(0.050)
2.0% (0.100)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.00
$19.50
Sublet SF
0.90
$19.00
Dollars/SF/Year
0.80
Millions SF
0.70 0.60 0.50 0.40
$18.50 $18.00 $17.50 $17.00
0.30 0.20
$16.50
0.10 $16.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 306 9,475,902
Vacancy Vacant SF Vacancy % 816,270 8.6%
Net Absorption 9,635
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $19.31
2017 3q
306
9,475,902
825,905
8.7%
(39,983)
0
0
0
0
$18.66
2017 2q
306
9,475,902
785,922
8.3%
(77,298)
0
0
0
0
$18.28
2017 1q
305
9,467,470
700,192
7.4%
(26,605)
1
2016 4q
304
9,463,444
669,561
7.1%
109,465
0
4,026
1
8,432
$18.41
0
2
12,458
$17.22
2016 3q
303
9,455,944
771,526
8.2%
97,597
0
0
3
19,958
$17.27
2016 2q
303
9,455,944
869,123
9.2%
16,144
0
0
2
11,526
$17.83
2016 1q
302
9,451,244
880,567
9.3%
(16,466)
0
0
2
12,200
$17.86
2015 4q
302
9,451,244
864,101
9.1%
130,552
0
0
1
4,700
$18.22
2015 3q
302
9,451,244
994,653
10.5%
89,438
1
1
4,700
$18.09
2015 2q
301
9,339,244
972,091
10.4%
2015 1q
301
9,339,244
946,960
10.1%
106,885
(25,131)
112,000
0
0
1
112,000
$17.77
0
0
1
112,000
$17.49 $17.54
2014 4q
301
9,339,244
1,053,845
11.3%
65,800
0
0
1
112,000
2014 3q
301
9,339,244
1,119,645
12.0%
54,082
0
0
1
112,000
$17.74
2014 2q
301
9,339,244
1,173,727
12.6%
83,858
0
0
1
112,000
$16.82
2014 1q
301
9,339,244
1,257,585
13.5%
(5,963)
0
0
0
0
$16.31
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
21
Denver – Year-End 2017
Denver Office Market B o u l d e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
Absorption SF
Vacancy
10.0%
0.250
9.0%
0.200
8.0% 7.0%
0.150
6.0%
0.100
5.0% 0.050
4.0%
0.000
Percent Vacant
Millions SF
0.300
Historical Analysis, All Classes
3.0%
(0.050)
2.0%
(0.100)
1.0%
(0.150)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.60
$27.50
Sublet SF
1.40
$27.00 Dollars/SF/Year
Millions SF
1.20 1.00 0.80 0.60
$26.50 $26.00 $25.50
0.40 $25.00 0.20 $24.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 811 15,976,703
Vacancy Vacant SF Vacancy % 1,477,040 9.2%
Net Absorption 47,126
Delivered Inventory # Bldgs Total RBA 3 262,798
2017 3q
808
15,713,905
1,261,286
8.0%
(77,483)
1
2017 2q
807
15,709,739
1,179,637
7.5%
157,063
3
2017 1q
805
15,564,447
1,191,408
7.7%
(9,199)
0
2016 4q
805
15,564,447
1,182,209
7.6%
(73,707)
0
2016 3q
805
15,564,447
1,108,502
7.1%
24,741
2
2016 2q
803
15,325,692
894,488
5.8%
77,296
0
2016 1q
803
15,325,692
971,784
6.3%
15,160
1
61,717
4,166
UC Inventory # Bldgs Total RBA 6 301,216
Quoted Rates $26.61
8
506,414
8
448,228
$27.08
0
9
530,330
$26.83
0
8
490,330
$26.43
5
395,200
$26.67
7
633,955
$26.17
4
481,755
$25.50
152,200
238,755 0
$26.93
2015 4q
802
15,263,975
925,227
6.1%
9,164
1
13,065
4
343,472
$24.95
2015 3q
803
15,263,433
933,849
6.1%
(18,802)
1
29,451
4
293,537
$24.45
322,988
$23.99
2015 2q
802
15,233,982
885,596
5.8%
(101,218)
0
0
5
2015 1q
802
15,233,982
784,378
5.1%
(7,803)
0
0
3
218,271
$23.27
2014 4q
802
15,233,982
776,575
5.1%
47,931
0
0
3
218,271
$22.85
884,506
3
218,271
$22.54
2014 3q
803
15,293,982
5.8%
17,245
0
2014 2q
803
15,293,982
901,751
5.9%
(20,265)
1
8,100
0
0
2014 1q
802
15,285,882
873,386
5.7%
67,604
1
12,500
1
0 8,100
$22.18 $21.31
Source: CoStar Property®
22
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market B r o o m f i e l d
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.200
Historical Analysis, All Classes Absorption SF
Vacancy
16.0% 14.0%
0.150
10.0%
0.050
8.0% 6.0%
0.000
Percent Vacant
Millions SF
12.0% 0.100
4.0% (0.050)
2.0%
(0.100)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.80
$27.50
Sublet SF
0.70
$27.00 Dollars/SF/Year
Millions SF
0.60 0.50 0.40 0.30 0.20
$26.50
$26.00
$25.50
0.10 $25.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 131 6,527,168
Vacancy Vacant SF Vacancy % 520,854 8.0%
Net Absorption 65,356
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 2 255,588
Quoted Rates $26.20
2017 3q
131
6,527,168
586,210
9.0%
(4,561)
0
0
2
255,588
2017 2q
131
6,527,168
581,649
8.9%
68,081
0
0
1
176,588
$26.72
2017 1q
130
6,507,343
629,905
9.7%
37,242
0
0
2
196,413
$26.75
2016 4q
130
6,507,343
667,147
10.3%
(11,487)
0
0
2
196,413
$26.64
2016 3q
130
6,507,343
655,660
10.1%
(5,106)
1
102,869
1
19,825
$26.54
2016 2q
129
6,404,474
547,685
8.6%
170,603
1
11,009
1
102,869
$26.57
2016 1q
128
6,393,465
707,279
11.1%
(76,690)
0
0
2
113,878
$27.14
2015 4q
128
6,393,465
630,589
9.9%
21,135
0
0
2
113,878
$26.71
2015 3q
128
6,393,465
651,724
10.2%
25,815
0
0
2
113,878
$26.21
2015 2q
128
6,393,465
677,539
10.6%
39,269
0
0
2
113,878
$26.52
11,009
$25.78
2015 1q
128
6,393,465
716,808
11.2%
177,155
0
0
1
2014 4q
128
6,393,465
893,963
14.0%
9,466
0
0
0
0
$26.64
2014 3q
128
6,393,465
903,429
14.1%
34,174
0
0
0
0
$26.30
2014 2q
128
6,393,465
937,603
14.7%
21,758
0
0
0
0
2014 1q
127
6,386,826
952,722
14.9%
95,248
0
0
1
6,639
$26.57
$26.01 $26.93
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
23
Denver – Year-End 2017
Denver Office Market C l e a r
C r e e k
C o u n t y
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.020
M a r k e t
Historical Analysis, All Classes Absorption SF
Vacancy
25.0%
0.015 20.0%
0.005
15.0%
0.000 10.0%
(0.005) (0.010)
Percent Vacant
Millions SF
0.010
5.0%
(0.015) (0.020)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.02
$35.00
Sublet SF
$30.00
0.02
Dollars/SF/Year
0.01
Millions SF
0.01 0.01 0.01 0.01
$25.00 $20.00 $15.00 $10.00
0.00 $5.00
0.00
$0.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 10 88,470
2017 3q
10
88,470
2017 2q
10
88,470
Vacancy Vacant SF Vacancy % 600 0.7% 17,034 600
19.3% 0.7%
Net Absorption 16,434 (16,434) (600)
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $17.07
0
0
0
0
$15.20
0
0
0
0
$22.88
2017 1q
10
88,470
0
0.0%
0
0
0
0
0
$31.25
2016 4q
10
88,470
0
0.0%
0
0
0
0
0
$0.00
2016 3q
10
88,470
0
0.0%
0
0
0
0
0
$7.35
2016 2q
10
88,470
0
0.0%
0
0
0
0
0
$7.35
2016 1q
10
88,470
0
0.0%
0
0
0
0
0
$7.35
2015 4q
10
88,470
0
0.0%
800
0
0
0
0
$7.35
2015 3q
10
88,470
800
0.9%
0
0
0
0
0
$7.35
2015 2q
10
88,470
800
0.9%
0
0
0
0
0
$7.35
2015 1q
10
88,470
800
0.9%
0
0
0
0
0
$7.35
2014 4q
10
88,470
800
0.9%
0
0
0
0
0
$7.35
2014 3q
10
88,470
800
0.9%
0
0
0
0
0
$7.35
2014 2q
10
88,470
800
0.9%
1,460
0
0
0
0
$7.35
2014 1q
10
88,470
2,260
2.6%
(100)
0
0
0
0
$7.35
Source: CoStar Property®
24
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market C o l o r a d o
B l v d / G l e n d a l e
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.300
M a r k e t
Historical Analysis, All Classes Absorption SF
Vacancy
14.0%
0.250 12.0%
0.200
10.0% 8.0%
0.050 0.000
6.0%
(0.050)
Percent Vacant
Millions SF
0.150 0.100
4.0%
(0.100) (0.150)
2.0%
(0.200) (0.250)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.80
$28.50
Sublet SF
$28.00
1.60
$27.50
1.40 Dollars/SF/Year
$27.00
Millions SF
1.20 1.00 0.80 0.60
$26.50 $26.00 $25.50 $25.00 $24.50
0.40
$24.00
0.20
$23.50
0.00
$23.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 471 13,907,348
Vacancy Vacant SF Vacancy % 1,628,156 11.7%
Net Absorption (194,205)
Delivered Inventory # Bldgs Total RBA 0 0
2017 3q
471
13,907,348
1,433,951
10.3%
35,154
0
2017 2q
471
13,907,348
1,469,105
10.6%
32,996
1
0
2017 1q
471
13,692,678
1,287,431
9.4%
2,790
0
2016 4q
471
13,692,678
1,290,221
9.4%
(3,213)
0
2016 3q
471
13,689,321
1,283,651
9.4%
(39,969)
1
2016 2q
470
13,671,344
1,225,705
9.0%
(21,407)
0
2016 1q
474
13,687,275
1,220,229
8.9%
(9,172)
2015 4q
476
13,716,853
1,240,635
9.0%
31,091
2015 3q
477
13,741,103
1,295,976
9.4%
140,703
2
127,090 149,000
229,670 0
UC Inventory # Bldgs Total RBA 2 153,510
Quoted Rates $27.97
2
153,510
2
153,510
$27.26 $26.15
3
383,180
$26.26 $25.41
2
341,514
3
359,373
$25.31
0
3
265,506
$25.50
0
0
3
265,506
$24.92
0
0
2
247,647
$25.20
2
247,647
$24.40 $22.20
0 17,977
2015 2q
475
13,614,013
1,309,589
9.6%
86,330
1
2
127,090
2015 1q
474
13,465,013
1,246,919
9.3%
10,145
0
0
3
276,090
$21.68
2014 4q
475
13,558,033
1,350,084
10.0%
68,381
0
0
3
276,090
$22.95
0
3
276,090
$22.45
3
276,090
$21.71
3
275,252
$20.22
2014 3q
475
13,558,033
1,418,465
10.5%
31,019
0
2014 2q
475
13,558,033
1,449,484
10.7%
123,703
1
2014 1q
474
1,546,935
11.4%
194,633
0
13,531,781
26,252 0
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
25
Denver – Year-End 2017
Denver Office Market D o w n t o w n
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.700
Historical Analysis, All Classes Absorption SF
Vacancy
16.0%
0.600
14.0%
0.500 12.0%
0.300
10.0%
0.200
8.0%
0.100 0.000
6.0%
(0.100)
4.0%
Percent Vacant
Millions SF
0.400
(0.200) 2.0%
(0.300) (0.400)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
6.00
$33.40
Sublet SF
$33.20 5.00 Dollars/SF/Year
$33.00
Millions SF
4.00 3.00 2.00
$32.80 $32.60 $32.40 $32.20 $32.00
1.00
$31.80 $31.60
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 372 37,772,717
Vacancy Vacant SF Vacancy % 5,538,895 14.7%
Net Absorption (259,360)
Delivered Inventory # Bldgs Total RBA 2 121,400
2017 3q
370
37,651,317
5,158,135
13.7%
274,476
0
2017 2q
370
37,651,317
5,432,611
14.4%
29,755
1
53,478
2017 1q
369
37,597,839
347,653
2016 4q
367
37,250,186
2016 3q
366
2016 2q
366
2016 1q
365
2015 4q
365
2015 3q
362
2015 2q 2015 1q
5,408,888
0
UC Inventory # Bldgs Total RBA 16 2,845,292
Quoted Rates $33.26
17
2,866,389
$32.77
11
1,992,653
$32.52
14.4%
(213,724)
2
4,847,511
13.0%
(26,094)
1
36,939,171
4,510,402
12.2%
(166,018)
0
36,939,171
4,344,384
11.8%
(257,325)
1
36,873,171
4,021,059
10.9%
(34,414)
0
36,873,171
3,986,645
10.8%
452,577
2
198,000
36,627,048
4,193,099
11.4%
149,890
4
614,599
9
358
36,012,449
3,728,390
10.4%
98,271
2
95,128
12
2,196,217
$32.73
355
35,907,844
3,722,056
10.4%
47,394
1
10,651
11
1,276,342
$32.62
11
1,238,870
$31.92
10
927,855
$31.09
7
975,161
$30.32
7
1,006,329
$29.74
2014 4q
354
35,897,193
3,758,799
10.5%
132,364
0
2014 3q
354
35,897,193
3,891,163
10.8%
430,990
2
2014 2q
352
35,692,601
2014 1q
351
35,580,049
4,117,561 4,088,085
11.5%
83,076
1
11.5%
123,445
0
311,015 0 66,000 0
0 204,592 112,552 0
11
2,014,131
$32.18
11
2,338,144
$32.24
9
2,260,678
$32.25
7
1,692,459
$32.96
6
1,448,146
$33.06
6
1,448,146
$32.79
1,694,269
$32.54
Source: CoStar Property®
26
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market E l b e r t
C o u n t y
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.008
Historical Analysis, All Classes Absorption SF
Vacancy
35.0%
0.006 30.0%
0.004
25.0% 20.0%
(0.002) (0.004)
15.0%
(0.006)
Percent Vacant
Millions SF
0.002 0.000
10.0%
(0.008) (0.010)
5.0%
(0.012) (0.014)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.02
$18.00
Sublet SF
$16.00
0.02
$14.00 Dollars/SF/Year
0.02
Millions SF
0.01 0.01 0.01 0.01
$12.00 $10.00 $8.00 $6.00
0.01 $4.00
0.00
$2.00
0.00
$0.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 21 57,027
Vacancy Vacant SF Vacancy % 12,564 22.0%
Net Absorption 0
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $4.60
2017 3q
21
57,027
12,564
22.0%
5,234
0
0
0
0
$4.60
2017 2q
21
57,027
17,798
31.2%
(11,964)
0
0
0
0
$5.81
2017 1q
21
57,027
5,834
10.2%
500
0
0
0
0
$5.81
2016 4q
21
57,027
6,334
11.1%
0
0
0
0
0
$5.81
2016 3q
21
57,027
6,334
11.1%
0
0
0
0
0
$5.81
2016 2q
21
57,027
6,334
11.1%
0
0
0
0
$15.64
2016 1q
21
57,027
600
1.1%
0
0
0
0
0
$14.74
2015 4q
21
57,027
600
1.1%
600
0
0
0
0
$14.74
2015 3q
21
57,027
1,200
2.1%
0
0
0
0
0
$14.74 $14.74
(5,734)
2015 2q
21
57,027
1,200
2.1%
0
0
0
0
0
2015 1q
21
57,027
1,200
2.1%
0
0
0
0
0
$14.74
2014 4q
21
57,027
1,200
2.1%
0
0
0
0
0
$13.83
2014 3q
21
57,027
1,200
2.1%
0
0
0
0
0
$13.83
2014 2q
21
57,027
1,200
2.1%
0
0
0
0
0
$12.48
2014 1q
21
57,027
1,200
2.1%
0
0
0
0
$14.18
2,700
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
27
Denver – Year-End 2017
Denver Office Market F o r t
C o l l i n s / L o v e l a n d Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.300
M a r k e t
Historical Analysis, All Classes Absorption SF
Vacancy
9.0% 8.0%
0.200
0.100
6.0% 5.0%
0.000 4.0% (0.100)
3.0%
Percent Vacant
Millions SF
7.0%
2.0% (0.200) 1.0% (0.300)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
$23.00
Sublet SF
0.70
$22.50
0.60
$22.00
Dollars/SF/Year
Millions SF
0.80
0.50 0.40 0.30
$21.50 $21.00 $20.50
0.20 $20.00
0.10
$19.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 902 10,794,577
Vacancy Vacant SF Vacancy % 667,250 6.2%
Net Absorption (40,556)
Delivered Inventory # Bldgs Total RBA 1 7,500
UC Inventory # Bldgs Total RBA 1 3,200
Quoted Rates $22.17
2017 3q
901
10,787,077
619,194
5.7%
(2,494)
0
1
7,500
$22.47
2017 2q
900
10,777,121
606,744
5.6%
175,416
5
192,711
2
17,456
$22.42
2017 1q
895
10,584,410
589,449
5.6%
239,471
2
105,100
7
210,167
$22.31
2016 4q
893
10,479,310
723,820
6.9%
68,970
3
27,300
9
315,267
$21.76
0
2016 3q
889
10,439,634
753,114
7.2%
5,136
3
55,774
9
317,197
$20.88
2016 2q
886
10,383,860
702,476
6.8%
98,164
2
116,000
10
212,035
$20.60 $20.70
2016 1q
884
10,267,860
684,640
6.7%
(31,971)
0
0
10
317,635
2015 4q
885
10,268,914
653,723
6.4%
21,510
0
0
8
300,150
$19.23
2015 3q
885
10,268,914
675,233
6.6%
47,786
0
0
4
247,000
$19.75
2015 2q
885
10,268,914
723,019
7.0%
110,814
2
1
60,000
$18.92
2015 1q
883
10,233,873
798,792
7.8%
(219,420)
0
3
95,041
$19.56 $19.96
2014 4q
883
10,233,873
579,372
5.7%
42,550
1
2014 3q
880
10,173,278
561,327
5.5%
13,383
0
2014 2q
879
10,166,446
567,878
5.6%
82,611
1
2014 1q
879
10,120,998
605,041
6.0%
97,261
1
35,041 0 30,600
3
95,041
5
95,636
$20.16
51,448
5
97,427
$19.85
16,779
6
148,875
$19.54
0
Source: CoStar Property®
28
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market G i l p i n
C o u n t y
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.006
Historical Analysis, All Classes Absorption SF
Vacancy
40.0% 35.0%
0.004
25.0%
0.000
20.0% 15.0%
(0.002)
Percent Vacant
Millions SF
30.0% 0.002
10.0% (0.004)
5.0%
(0.006)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.01
$30.00
Sublet SF
$25.00 Dollars/SF/Year
0.01
Millions SF
0.00 0.00 0.00
$15.00 $10.00 $5.00
0.00
$0.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
$20.00
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 4 15,116
Vacancy Vacant SF Vacancy % 5,088 33.7%
Net Absorption (5,088)
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $0.00
2017 3q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2017 2q
4
15,116
0
0.0%
0
0
0
0
0
$24.45
2017 1q
4
15,116
0
0.0%
0
0
0
0
$24.45
2016 4q
4
15,116
0
0.0%
5,088
0
0
0
0
$24.45
2016 3q
4
15,116
33.7%
(5,088)
0
0
0
0
$24.45
2016 2q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2016 1q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2015 4q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2015 3q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2015 2q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2015 1q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2014 4q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2014 3q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2014 2q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
2014 1q
4
15,116
0
0.0%
0
0
0
0
0
$0.00
5,088
0
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
29
Denver – Year-End 2017
Denver Office Market L o n g m o n t
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.060
Historical Analysis, All Classes Absorption SF
Vacancy
12.0%
0.050 10.0%
0.030
8.0%
0.020 6.0% 0.010 0.000
4.0%
Percent Vacant
Millions SF
0.040
(0.010) 2.0% (0.020) (0.030)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.16
$22.00
Sublet SF
$21.80 0.14
$21.60 Dollars/SF/Year
Millions SF
0.12 0.10 0.08 0.06 0.04
$21.40 $21.20 $21.00 $20.80 $20.60 $20.40
0.02
$20.20
0.00
$20.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 186 1,962,227
Vacancy Vacant SF Vacancy % 63,059 3.2%
Net Absorption (1,857)
2017 3q
186
1,962,227
61,202
3.1%
2017 2q
186
1,962,227
96,970
4.9%
35,768 18,511
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $21.45
0
0
0
0
$21.44
0
0
0
0
$21.60 $20.80
2017 1q
186
1,962,227
115,481
5.9%
(20,885)
0
0
0
0
2016 4q
186
1,962,227
94,596
4.8%
24,740
0
0
0
0
$21.81
2016 3q
186
1,962,227
119,336
6.1%
23,257
0
0
0
0
$20.74
2016 2q
186
1,962,227
142,593
7.3%
40,169
1
2016 1q
185
1,922,627
143,162
7.4%
838
0
39,600 0
0
0
$20.66
1
39,600
$20.64
39,600
$18.98
2015 4q
185
1,922,627
144,000
7.5%
47,926
0
0
1
2015 3q
185
1,922,627
191,926
10.0%
(25,768)
0
0
0
0
$18.85
2015 2q
185
1,922,627
166,158
8.6%
1,095
0
0
0
0
$18.44 $18.09
2015 1q
185
1,922,627
167,253
8.7%
7,835
0
0
0
0
2014 4q
185
1,922,627
175,088
9.1%
(1,697)
0
0
0
0
$17.75
2014 3q
185
1,922,627
173,391
9.0%
9,383
0
0
0
0
$17.63
2014 2q
185
1,922,627
182,774
9.5%
(1,109)
0
0
0
0
$17.24
2014 1q
185
1,922,627
181,665
9.4%
0
0
$17.24
24,329
1
3,084
Source: CoStar Property®
30
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market M i d t o w n
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.350
Historical Analysis, All Classes Absorption SF
Vacancy
6.0%
0.300 5.0%
0.200
4.0%
0.150 3.0% 0.100 0.050
2.0%
Percent Vacant
Millions SF
0.250
0.000 1.0% (0.050) (0.100)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.50
$26.00
Sublet SF
$25.50
0.45
$25.00 Dollars/SF/Year
0.40
Millions SF
0.35 0.30 0.25 0.20
$24.50 $24.00 $23.50 $23.00
0.15
$22.50
0.10
$22.00
0.05
$21.50
0.00
$21.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 677 9,193,937
Vacancy Vacant SF Vacancy % 372,714 4.1%
Net Absorption 38,410
Delivered Inventory # Bldgs Total RBA 0 0
2017 3q
678
9,254,955
472,142
5.1%
(79,160)
0
2017 2q
678
9,254,955
392,982
4.2%
262,064
1
2017 1q
677
8,954,955
355,046
4.0%
(78,593)
0
2016 4q
678
8,961,594
283,092
3.2%
17,455
1
0 300,000 0 28,600
UC Inventory # Bldgs Total RBA 1 65,805 1 0
65,805 0
Quoted Rates $25.72 $25.66 $25.44
1
300,000
$25.22
1
300,000
$24.95
2016 3q
677
8,932,994
271,947
3.0%
(39,984)
0
0
2
328,600
$23.53
2016 2q
677
8,932,994
231,963
2.6%
(2,510)
0
0
2
328,600
$22.90
2016 1q
678
8,935,264
231,723
2.6%
(23,201)
0
0
2
328,600
$22.85
2015 4q
679
8,942,744
216,002
2.4%
35,003
1
1
28,600
$23.03
2015 3q
678
8,890,744
199,005
2.2%
26,912
0
0
1
52,000
$21.96
2015 2q
678
8,890,744
225,917
2.5%
10,768
0
0
1
52,000
$21.81
2015 1q
679
8,896,144
242,085
2.7%
(8,648)
0
0
1
52,000
$22.19
0
1
52,000
$21.57
1
52,000
$20.84
52,000
2014 4q
681
8,900,655
237,948
2.7%
11,873
0
2014 3q
681
8,900,655
249,821
2.8%
114,292
1
63,000
2014 2q
680
8,837,655
301,113
3.4%
130,319
2
60,438
2
115,000
$20.84
2014 1q
679
8,780,415
374,192
4.3%
24,094
1
4,050
4
175,438
$20.45
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
31
Denver – Year-End 2017
Denver Office Market N o r t h
D e n v e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.120
Historical Analysis, All Classes Absorption SF
Vacancy
14.0%
0.100
12.0% 10.0%
0.060 0.040
8.0%
0.020
6.0%
0.000
Percent Vacant
Millions SF
0.080
4.0%
(0.020) 2.0%
(0.040) (0.060)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.40
$22.50
Sublet SF
$22.00
0.35
$21.50 Dollars/SF/Year
Millions SF
0.30 0.25 0.20 0.15
$21.00 $20.50 $20.00
0.10
$19.50
0.05
$19.00 $18.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 166 4,395,899
Vacancy Vacant SF Vacancy % 338,191 7.7%
Net Absorption (15,258)
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 1 14,000
Quoted Rates $22.20
2017 3q
166
4,395,899
322,933
7.3%
12,276
0
0
0
0
2017 2q
166
4,395,899
335,209
7.6%
33,622
0
0
0
0
$21.10
2017 1q
166
4,395,899
368,831
8.4%
42,884
2
61,000
0
0
$20.61
15,243
2016 4q
164
4,334,899
350,715
8.1%
(22,026)
1
2016 3q
163
4,319,656
313,446
7.3%
30,620
0
0
$21.49
2
61,000
$21.31
3
76,243
$21.33
2016 2q
163
4,319,656
344,066
8.0%
23,777
1
41,400
3
76,243
$20.26
2016 1q
162
4,278,256
326,443
7.6%
48,338
1
54,425
4
117,643
$20.02
2015 4q
161
4,223,831
320,356
7.6%
33,169
0
2015 3q
161
4,223,831
353,525
8.4%
21,555
1
2015 2q
160
4,210,067
361,316
8.6%
37,754
0
2015 1q
160
4,210,067
399,070
9.5%
(33,803)
2014 4q
160
4,210,067
365,267
8.7%
105,960
2014 3q
161
4,214,017
475,177
11.3%
6,493
5
172,068
$19.90
3
150,825
$19.99
0
1
13,764
$19.33
0
0
1
13,764
$18.34
0
0
1
13,764
0
0
0
2014 2q
161
4,214,017
481,670
11.4%
(14,204)
1
2014 1q
160
4,207,677
461,126
11.0%
11,611
0
0 13,764
6,340 0
0 1
$18.21
0
$18.40
0
$17.94
6,340
$17.85
Source: CoStar Property®
32
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market N o r t h e a s t
D e n v e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.200
Historical Analysis, All Classes Absorption SF
Vacancy
12.0%
0.150
10.0%
Millions SF
8.0%
0.050 6.0% 0.000 4.0%
(0.050)
Percent Vacant
0.100
2.0%
(0.100) (0.150)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.45
$23.00
Sublet SF
0.40
$22.00 Dollars/SF/Year
0.35
Millions SF
0.30 0.25 0.20 0.15 0.10
$21.00 $20.00 $19.00 $18.00
0.05 $17.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 247 4,924,912
Vacancy Vacant SF Vacancy % 407,668 8.3%
Net Absorption (95,003)
Delivered Inventory # Bldgs Total RBA 1 5,000
2017 3q
246
4,919,912
307,665
6.3%
26,757
0
2017 2q
246
4,919,912
334,422
6.8%
(103,356)
1
2017 1q
245
4,906,210
217,364
4.4%
22,372
0
0 13,702 0 9,562
UC Inventory # Bldgs Total RBA 1 43,586
Quoted Rates $22.56
2
48,586
1
43,586
$22.36 $21.70
2
57,288
$20.82
2016 4q
245
4,906,210
239,736
4.9%
56,181
1
2
57,288
$19.44
2016 3q
244
4,896,648
286,355
5.8%
7,019
0
0
2
23,264
$19.50
2016 2q
244
4,896,648
293,374
6.0%
55,412
0
0
2
23,264
$19.49
2016 1q
244
4,896,648
348,786
7.1%
44,354
0
0
1
13,702
2015 4q
244
4,896,648
393,140
8.0%
30,890
1
10,416
0
0
$19.23 $18.47
2015 3q
243
4,886,232
413,614
8.5%
(13,535)
0
0
1
10,416
$18.14
2015 2q
243
4,886,232
400,079
8.2%
152,051
0
0
1
10,416
$18.04
2015 1q
243
4,886,232
552,130
11.3%
(71,128)
0
2014 4q
243
4,886,232
481,002
9.8%
6,674
1
2014 3q
241
4,863,272
464,716
9.6%
38,325
0
0 11,800
0
0
0
0
$18.06 $17.32
0
2
22,960
$17.20
2014 2q
241
4,863,272
503,041
10.3%
(22,759)
0
0
2
22,960
$17.87
2014 1q
241
4,863,272
480,282
9.9%
5,682
0
0
2
22,960
$17.79
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
33
Denver – Year-End 2017
Denver Office Market N o r t h w e s t
D e n v e r
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.150
M a r k e t
Historical Analysis, All Classes Absorption SF
Vacancy
14.0% 12.0% 10.0%
0.050
8.0% 0.000 6.0% (0.050)
Percent Vacant
Millions SF
0.100
4.0%
(0.100)
2.0%
(0.150)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.80
$23.50
Sublet SF
$23.00 0.70
$22.50 Dollars/SF/Year
Millions SF
0.60 0.50 0.40 0.30 0.20
$21.50 $21.00 $20.50 $20.00 $19.50
0.10
$19.00 $18.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
$22.00
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 464 6,789,487
Vacancy Vacant SF Vacancy % 637,964 9.4%
Net Absorption 51,920
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 5 257,462
Quoted Rates $23.18
2017 3q
464
6,789,487
689,884
10.2%
53,786
0
0
2
118,750
$22.80
2017 2q
464
6,789,487
743,670
11.0%
(23,320)
0
0
1
18,750
$22.64
2017 1q
464
6,789,487
720,350
10.6%
(104,754)
1
2016 4q
465
6,772,486
598,595
8.8%
(48,587)
0
2016 3q
466
6,793,154
570,676
8.4%
(47,150)
0
2016 2q
466
6,793,154
523,526
7.7%
136,071
1
2016 1q
465
6,779,862
646,305
9.5%
2,778
0
2015 4q
466
6,782,261
651,482
9.6%
52,427
2
2015 3q
465
6,742,053
663,701
9.8%
76,314
0
19,000 0 0 13,292
0
0
$21.47
1
19,000
$21.39
1
19,000
$20.64
0
0
$20.34
1
13,292
1
13,292
$20.13
0
3
54,472
$19.99
0 41,180
$20.61
2015 2q
465
6,742,053
740,015
11.0%
(41,908)
0
0
2
41,180
$19.71
2015 1q
465
6,742,053
698,107
10.4%
(3,260)
0
0
2
41,180
$19.34
2014 4q
466
6,787,941
740,735
10.9%
86,386
1
1
4,100
$19.51
2014 3q
465
6,765,047
804,227
11.9%
12,472
0
0
2
26,994
$19.89
0
0
2
26,994
$19.47
0
0
2
26,994
$18.82
2014 2q
465
6,765,047
816,699
12.1%
2014 1q
466
6,775,089
834,274
12.3%
7,533 (35,939)
22,894
Source: CoStar Property®
34
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market P a r k
C o u n t y
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.012
Historical Analysis, All Classes Absorption SF
Vacancy
30.0%
0.010 25.0%
0.008
20.0%
0.004 0.002
15.0%
0.000 (0.002)
10.0%
Percent Vacant
Millions SF
0.006
(0.004) (0.006)
5.0%
(0.008) (0.010)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.01
$12.00
Sublet SF
$10.00 Dollars/SF/Year
0.01
Millions SF
0.01 0.01 0.00
$6.00 $4.00 $2.00
0.00
$0.00
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
$8.00
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 14 48,496
Vacancy Vacant SF Vacancy % 342 0.7%
Net Absorption (42)
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $8.00
2017 3q
14
48,496
300
0.6%
2,880
0
0
0
0
$8.72
2017 2q
14
48,496
3,180
6.6%
(3,180)
0
0
0
0
$8.72
2017 1q
14
48,496
0.0%
9,220
2016 4q
14
48,496
9,220
19.0%
2016 3q
14
48,496
9,220
19.0%
2016 2q
14
48,496
9,220
19.0%
2016 1q
14
48,496
9,995
20.6%
2015 4q
14
48,496
9,995
20.6%
2015 3q
14
48,496
10,995
22.7%
2015 2q
14
48,496
10,995
22.7%
0
0
0
0
0
$9.81
0
0
0
0
0
$9.59
0
0
0
0
0
$9.59
0
0
0
0
$9.61
0
0
0
0
$10.29 $10.29
775 0 1,000
0
0
0
0
0
0
0
0
$10.25
2,688
0
0
0
0
$10.26
100
$10.26
0
2015 1q
14
48,496
13,683
28.2%
0
0
0
0
2014 4q
14
48,496
13,783
28.4%
0
0
0
0
0
$11.23
2014 3q
14
48,496
13,783
28.4%
0
0
0
0
0
$12.52
2014 2q
14
48,496
13,783
28.4%
(7,995)
0
0
0
0
$11.90
2014 1q
14
48,496
5,788
11.9%
1,100
0
0
0
0
$13.60
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
35
Denver – Year-End 2017
Denver Office Market P a r k e r / C a s t l e
R o c k
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.070
M a r k e t
Historical Analysis, All Classes Absorption SF
Vacancy
12.0%
0.060 10.0%
0.040
8.0%
0.030 6.0% 0.020 0.010
4.0%
Percent Vacant
Millions SF
0.050
0.000 2.0% (0.010) (0.020)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.25
$26.50
Sublet SF
$26.00 $25.50 Dollars/SF/Year
Millions SF
0.20
0.15
0.10
$25.00 $24.50 $24.00 $23.50 $23.00 $22.50
0.05
$22.00 $21.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 178 2,166,840
Vacancy Vacant SF Vacancy % 142,944 6.6%
Net Absorption 11,343
Delivered Inventory # Bldgs Total RBA 0 0
2017 3q
178
2,166,840
154,287
7.1%
23,522
1
2017 2q
177
2,145,489
156,458
7.3%
8,989
0
21,351 0 60,000
UC Inventory # Bldgs Total RBA 2 69,230
Quoted Rates $26.10
2
69,230
$25.53
3
90,581
$25.85
2
42,336
$23.18
2
81,351
$23.79
2017 1q
177
2,145,489
165,447
7.7%
64,924
1
2016 4q
176
2,085,489
170,371
8.2%
32,136
0
2016 3q
176
2,085,489
202,507
9.7%
21,846
2
63,368
2
81,351
$23.72
2016 2q
173
2,002,814
141,678
7.1%
41,721
1
8,493
3
82,675
$24.43 $24.42
0
2016 1q
172
1,994,321
174,906
8.8%
(3,041)
0
0
4
91,168
2015 4q
172
1,994,321
171,865
8.6%
(11,841)
0
0
3
77,800
$25.42
2015 3q
172
1,994,321
160,024
8.0%
(1,181)
0
0
2
58,493
$24.26
2015 2q
172
1,994,321
158,843
8.0%
11,486
1
5,289
2
58,493
$23.90
2015 1q
171
1,989,032
165,040
8.3%
2,254
1
4,882
2
55,289
$23.38
2014 4q
170
1,984,150
162,412
8.2%
28,184
1
13,624
2
2014 3q
169
1,970,526
176,972
9.0%
41,530
0
0
3
23,795
$22.97
2014 2q
169
1,970,526
218,502
11.1%
(7,625)
0
0
3
23,795
$22.50
2014 1q
169
1,970,526
210,877
10.7%
27,471
1
1
13,624
$22.55
25,903
10,171
$23.43
Source: CoStar Property®
36
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market S o u t h e a s t
D e n v e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.700
Historical Analysis, All Classes Absorption SF
Vacancy
13.5%
0.600 13.0%
0.500
12.5%
0.300 0.200
12.0%
0.100 0.000
11.5%
Percent Vacant
Millions SF
0.400
(0.100) (0.200)
11.0%
(0.300) (0.400)
10.5% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
7.00
$24.80
Sublet SF
$24.60 6.00
$24.40 Dollars/SF/Year
Millions SF
5.00 4.00 3.00 2.00
$24.20 $24.00 $23.80 $23.60 $23.40 $23.20
1.00
$23.00 $22.80
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 857 47,472,749
Vacancy Vacant SF Vacancy % 5,925,254 12.5%
Net Absorption 305,354
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 5 900,929
Quoted Rates $24.40
2017 3q
857
47,472,749
6,230,608
13.1%
(22,405)
1
211,675
5
900,929
$24.56
2017 2q
856
47,261,074
5,996,528
12.7%
402,245
5
610,740
6
1,112,604
$24.49
2017 1q
851
46,650,334
5,788,033
12.4%
(178,538)
2
304,702
2016 4q
849
46,345,632
5,304,793
11.4%
190,796
0
0
11
1,723,344
$24.51
12
1,956,046
$23.94
2016 3q
850
46,458,116
5,608,073
12.1%
(261,024)
1
5,625
7
1,403,767
$23.43
2016 2q
849
46,452,491
5,341,424
11.5%
42,851
1
20,282
7
1,103,392
$23.53
2016 1q
848
46,432,209
5,363,993
11.6%
526,068
0
5
1,076,659
$23.73
2015 4q
848
46,432,209
5,890,061
12.7%
109,954
3
4
776,957
$23.12
2015 3q
849
45,886,625
5,454,431
11.9%
(233,390)
0
5
625,149
$23.01
2015 2q
849
45,886,625
11.4%
519,318
1
2015 1q
848
45,841,625
5,695,359
12.4%
80,392
0
2014 4q
848
45,841,625
5,775,751
12.6%
(198,100)
1
2014 3q
847
45,805,625
5,541,651
12.1%
173,396
3
2014 2q
844
45,425,625
5,335,047
11.7%
(24,668)
0
2014 1q
844
45,425,625
5,310,379
11.7%
(77,153)
0
5,221,041
0 582,792 0 45,000
5
625,149
$22.64
5
649,867
$22.27
36,000
4
627,792
$21.89
380,000
4
618,792
$21.67
0
4
416,000
$21.48
0
4
416,000
$21.31
0
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
37
Denver – Year-End 2017
Denver Office Market S o u t h w e s t
D e n v e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.150
Historical Analysis, All Classes Absorption SF
Vacancy
16.0% 14.0%
0.100
10.0%
0.000
8.0% 6.0%
(0.050)
Percent Vacant
Millions SF
12.0% 0.050
4.0% (0.100)
2.0%
(0.150)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.20
$19.50
Sublet SF
$19.00 Dollars/SF/Year
1.00
Millions SF
0.80 0.60 0.40
$18.00 $17.50 $17.00
0.20
$16.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
$18.50
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 551 9,708,288
Vacancy Vacant SF Vacancy % 862,224 8.9%
Net Absorption 66,166
Delivered Inventory # Bldgs Total RBA 3 20,476
UC Inventory # Bldgs Total RBA 0 0
Quoted Rates $19.11
2017 3q
548
9,687,812
907,914
9.4%
(13,664)
1
3
20,476
2017 2q
547
9,685,862
892,300
9.2%
(7,017)
0
0
4
22,426
$18.16
2017 1q
547
9,685,862
885,283
9.1%
87,693
0
0
1
1,950
$17.97
2016 4q
547
9,685,862
972,976
10.0%
(36,416)
1
2016 3q
546
9,660,862
911,560
9.4%
51,155
0
2016 2q
546
9,660,862
962,715
10.0%
131,832
1
2016 1q
545
9,623,782
1,057,467
11.0%
63,329
0
2015 4q
546
9,627,282
1,124,296
11.7%
68,443
1
1,950
25,000 0 37,080 0 26,160
$18.55
1
1,950
$17.96
1
25,000
$17.90 $17.44
1
25,000
2
62,080
$17.50
2
62,080
$17.50
2015 3q
548
9,655,816
1,221,273
12.6%
52,588
0
0
1
26,160
$17.18
2015 2q
548
9,655,816
1,273,861
13.2%
(126,300)
0
0
1
26,160
$16.65
2015 1q
548
9,655,816
1,147,561
11.9%
27,347
0
0
0
0
2014 4q
548
9,655,816
1,174,908
12.2%
66,778
0
0
0
0
$16.57 $16.13
2014 3q
548
9,655,816
1,241,686
12.9%
(18,589)
0
0
0
0
$16.48
2014 2q
549
9,748,275
1,315,556
13.5%
(34,928)
0
0
0
0
$16.46
2014 1q
549
9,748,275
1,280,628
13.1%
20,479
0
0
0
0
$16.39
Source: CoStar Property®
38
CoStar Office Statistics
©2018 CoStar Group, Inc.
Year-End 2017 – Denver
Denver Office Market W e l d
C o u n t y
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
0.140
Historical Analysis, All Classes Absorption SF
Vacancy
7.0%
0.120
6.0% 5.0%
0.080 4.0% 0.060 3.0% 0.040
Percent Vacant
Millions SF
0.100
2.0%
0.020
1.0%
0.000 (0.020)
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.30
$18.50
Sublet SF
$18.00 Dollars/SF/Year
0.25
Millions SF
0.20 0.15 0.10
$17.00 $16.50 $16.00
0.05
$15.50
0.00 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
$17.50
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 565 5,514,506
Vacancy Vacant SF Vacancy % 188,635 3.4%
Net Absorption 20,455
Delivered Inventory # Bldgs Total RBA 0 0
UC Inventory # Bldgs Total RBA 2 122,350
Quoted Rates $18.09
2017 3q
565
5,514,506
209,090
3.8%
8,596
0
0
2
2017 2q
565
5,514,506
217,686
3.9%
11,869
0
0
0
2017 1q
564
5,506,074
221,123
4.0%
(194)
2
15,347
1
8,432
$17.92
2016 4q
562
5,490,727
205,582
3.7%
(2,359)
1
6,900
3
23,779
$16.83
2016 3q
561
5,483,827
196,323
3.6%
18,872
2
21,890
4
30,679
$17.23
2016 2q
559
5,461,937
193,305
3.5%
62,064
0
4
31,305
$17.00 $16.52
2016 1q
559
5,461,937
255,369
4.7%
1,076
0
2015 4q
559
5,461,937
256,445
4.7%
30,859
1
2015 3q
558
5,452,161
277,528
5.1%
(1,281)
0 0 9,776
0
0
122,350 0
$17.83
2
21,890
2
21,890
$17.47
1
9,776
$17.00 $16.69
2015 2q
558
5,452,161
276,247
5.1%
(9,390)
0
0
1
9,776
2015 1q
558
5,452,161
266,857
4.9%
35,006
0
0
1
9,776
2014 4q
558
5,452,161
301,863
5.5%
108,543
1
118,000
$18.02
0
0
$16.32 $16.08
2014 3q
557
5,334,161
292,406
5.5%
51,545
1
7,660
1
118,000
$16.28
2014 2q
554
5,304,231
314,021
5.9%
18,498
1
6,500
4
147,930
$15.92
2014 1q
553
5,297,731
326,019
6.2%
26,063
0
0
5
154,430
$16.14
Source: CoStar Property®
©2018 CoStar Group, Inc.
CoStar Office Statistics
39
Denver – Year-End 2017
Denver Office Market W e s t
D e n v e r
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy Delivered SF
Absorption SF
Vacancy
14.0%
0.200
12.0%
0.150
10.0%
0.100
8.0%
0.050
6.0%
0.000
4.0%
(0.050)
2.0%
(0.100)
Percent Vacant
Millions SF
0.250
Historical Analysis, All Classes
0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.75
$22.00
Sublet SF
$21.50
1.70 Dollars/SF/Year
Millions SF
1.65 1.60 1.55
$21.00 $20.50 $20.00
1.50 $19.50
1.45
$19.00
1.40 2016 1q
2016 3q
2017 1q
2016 1q
2017 3q
Source: CoStar Property®
Period 2017 4q
2016 3q
2017 1q
2017 3q
Source: CoStar Property®
Existing Inventory # Bldgs Total RBA 743 15,225,893
Vacancy Vacant SF Vacancy % 1,617,896 10.6%
Net Absorption 12,126
Delivered Inventory # Bldgs Total RBA 1 65,000
UC Inventory # Bldgs Total RBA 2 201,000
Quoted Rates $21.87
2017 3q
742
15,160,893
1,565,022
10.3%
35,523
0
0
3
266,000
2017 2q
742
15,160,893
1,600,545
10.6%
73,802
0
0
2
240,000
$21.63
2017 1q
742
15,160,893
1,674,347
11.0%
(39,677)
0
0
2
240,000
$21.58
2016 4q
742
15,160,893
1,634,670
10.8%
(73,436)
0
0
0
0
$20.77
2016 3q
742
15,160,893
1,561,234
10.3%
82,714
1
5,000
0
0
$20.65 $20.53
$21.68
2016 2q
741
15,155,893
1,638,948
10.8%
221,135
2
155,258
1
5,000
2016 1q
739
15,000,635
1,704,825
11.4%
95,319
2
56,000
3
160,258
$20.24
2015 4q
737
14,944,635
1,744,144
11.7%
136,708
1
10,000
5
216,258
$20.09
2015 3q
736
14,934,635
1,870,852
12.5%
22,901
0
4
197,258
$20.00
2015 2q
735
14,925,940
1,885,058
12.6%
135,896
1
5
205,953
$19.63
2015 1q
733
14,799,725
1,894,739
12.8%
48,175
0
0
6
303,910
$19.77
2014 4q
733
14,799,725
1,942,914
13.1%
(68,419)
0
0
3
134,910
$19.81
2014 3q
734
14,802,600
1,877,370
12.7%
51,955
0
0
2
126,215
$19.59
2014 2q
734
14,802,600
1,929,325
13.0%
38,435
0
1
120,000
$19.33
2014 1q
734
14,802,600
1,967,760
13.3%
68,595
1
0 120,000
0 43,000
0
0
$19.13
Source: CoStar Property®
40
CoStar Office Statistics
©2018 CoStar Group, Inc.