Monthly Economic Indicatorsthe designation, Denver will receive $350,000 in grants targeted at education efforts beyond the high‐school level. According to a new report from Version

Monthly analysis of 18 key economic indicators in Metro Denver

www.metrodenver.org

Energetic Bodies. Energetic Minds.

October 2017

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Monthly Economic Indicators

Metro Denver Economic Development Corporation |October 3, 2017 | Page 1

The Monthly Economic Indicators is a comprehensive analysis of economic conditions in the seven‐county Metro Denver area, or the region comprised of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties. There are two metropolitan statistical areas (MSAs) located within the Metro Denver region: the Boulder MSA (Boulder County) and the Denver‐Aurora‐Lakewood MSA (the Denver MSA) (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties). This report presents recent data and long‐term trends for the seven‐county region, MSAs, or counties, depending on availability. The analysis includes four main data sections: labor force and employment, the consumer sector, residential real estate, and commercial real estate.

Notable Rankings

Loveland‐based Heska Corp. and Greenwood Village‐based Century Communities Inc. were named to Fortune magazine’s 100 fastest‐growing companies. Fortune ranked companies based on revenues, profits, and stock returns.

Denver was designated as one of 17 communities nationwide as a Talent Hub by the Lumina Foundation. To be named to the list, cities met rigorous standards for creating environments that attract, retain, and cultivate talent. As part of the designation, Denver will receive $350,000 in grants targeted at education efforts beyond the high‐school level.

According to a new report from Version 2.0 Communications, the Boulder MSA is the No. 1 metropolitan area for female entrepreneurs, and Denver is ranked No. 3. The report also found that Colorado has the highest percentage of women with a bachelor’s degree or higher in the nation, and the state ranked fifth in the nation for women in STEM jobs at 6.1 percent. About 9.9 percent of women are self‐employed in the state, compared to 7.2 percent in the U.S.

Colorado had the seventh‐highest median household income of the 50 states in 2016 according to data released from the U.S. Census Bureau. The median in Colorado ($70,566) compared with $76,260 in New Hampshire, the highest ranked state.

SmartAsset released a list of the top 25 cities where millennials are moving, ranking Fort Collins 8th, Denver 9th, Broomfield 11th, and Lakewood 20th. The ranking considered U.S. Census Bureau migration data across 218 cities and all 50 states. A separate ranking of the states where millennials are moving ranked Colorado third, behind Texas and Washington.

Denver ranked No. 28 among the top “U.S. Metros for Millennials” in 2017, according to Apartment List. The ranking considered the strength of a metro’s job market, affordability, and livability. Denver received accolades for its abundance of jobs and high score for livability, but was downgraded due to its higher cost of living. Pittsburgh, Pa. topped the list, followed by Provo, Utah and Madison, Wis.

The University of Colorado ranked 29th among Reuters’ top 100 of the “World’s Most Innovative Universities” in 2017. The ranking of more than 600 organizations worldwide across 10 metrics focused on academic papers, patent filings, and performance. Stanford ranked first, followed by the Massachusetts Institute of Technology and Harvard University.

U.S. News & World Report released its annual ranking of the top national universities, with the Colorado School of Mines ranked the highest in Colorado at 75th. The University of Denver and the University of Colorado Boulder also made the top 100 colleges list, ranking 87th and 90th, respectively. Colorado State University ranked 124th and the University of Colorado Denver ranked 207th. A separate ranking of smaller universities in the western region showed Regis University as 27th and the University of Colorado‐Colorado Springs as 35th.

Colorado ranked as the fifth‐most popular domestic vacation destination, according to personal finance blog The Cashlorette. Hawaii was ranked as the top domestic location, while Italy was the most popular international destination.

Denver ranked as the ninth‐sportiest city in 2017, according to Men’s Health. Denver’s four major sport franchises, expansive parks, and recreational opportunities contributed to its high rank.


National Economic Overview

Gross Domestic Product

The U.S. Bureau of Economic Analysis (BEA) released the third estimate of real gross domestic product (GDP) for the second quarter of 2017. The estimate showed that GDP increased at an annual rate of 3.1 percent through the second quarter, which was 1.9 percentage points above the first quarter rate of 1.2 percent.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures, nonresidential fixed investment, exports, federal government spending, and private inventory investment.

Real GDP growth was partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Interest Rates

The Federal Open Market Committee (FOMC) of the Federal Reserve reported that they decided to maintain the target range of the federal funds rate at 1 percent to 1.25 percent at the September meeting.

The Committee expects to implement its balance sheet normalization program beginning in October and expects economic conditions will evolve in a manner that warrants gradual increases in the federal funds rate.

The next FOMC meeting will be held October 31 to November 1.

Policy Watch

National

The Federal Reserve stated it will start paring back its multi‐trillion‐dollar balance sheet in October, slowing its quantitative easing program as unemployment falls and economic growth reduces the need for emergency levels of monetary support. The Federal Reserve more than quadrupled the size of its balance sheet by purchasing treasuries and mortgage‐backed securities during the financial crisis. At the moment, the Federal Reserve reinvests payments it receives on its portfolio, keeping its overall holdings steady. The Federal Reserve will gradually phase out those reinvestments when the balance sheet rundown starts.

Local

According to the Leeds School of Business at the University of Colorado, four University of Colorado campuses generated a total economic impact in Colorado of $12.35 billion in fiscal year 2016. Campuses in Boulder, Denver, Colorado Springs, and the Anschutz Medical Campus employed nearly 32,390 faculty, staff, and student workers and awarded 14,479 degrees in 2016. The study identified $797 million in student spending and $37.3 million in visitor spending in 2016.

Colorado was selected as one of 10 winners of the Hyperloop One Global Challenge to identify the strongest new Hyperloop routes in the world. The 360‐mile route extends between Cheyenne and Pueblo through 10 urban centers on the Front Range. Hyperloop One will partner with the Colorado Department of Transportation and AECOM to conduct a feasibility study on the Front Range route. The 10 winning routes connect 53 urban centers and 150 million people in the U.S., Canada, Mexico, India, and the United Kingdom with a combined distance of more than 4,000 miles.


The $250 million Jefferson Parkway project—which has been in the planning phase for more than a decade—is expected to take another step forward in coming months when it submits plans to the Colorado Department of Transportation by the end of 2017. The project will connect the proposed toll road with the Colorado highway system at three junctions: Highway 93, Highway 72, and Highway 128. The 10‐mile proposed toll road fills in the gap in Metro Denver’s beltway between the end of C‐470 near Golden and the start of the Northwest Parkway near Broomfield.

The U.S. Olympic Committee (USOC) is considering Denver among other North American cities to host the Winter Olympics in either 2026 or 2030. The USOC will start reviewing locations for the Games in mid‐October and will announce the 2026 host city in 2019. The USOC stated that the Games will most likely return to a more traditional location and is considering cities such as Salt Lake City, Utah and Reno, Nev.

According to the Colorado Division of Insurance in 2018, individual health insurance premiums will increase nearly 27 percent in Colorado and small group plan premiums will increase by 6.6 percent. The Division stated that the increase in prices is primarily related to the uncertainty over the future of healthcare reform and continuing increases in healthcare costs, rising prescription drug prices, and increasing healthcare utilization. All companies currently operating in Connect for Health Colorado will continue offering individual plans in 2018 including Anthem, Bright Health Insurance, Cigna Health and Life Insurance, Denver Health Medical Plan, Friday Health Plans, Kaiser Foundation Health Plan of Colorado, and Rocky Mountain Health Maintenance Organization.

Economic Indexes & Notable Data Releases

National & International

The U.S. trade deficit was $43.7 billion in July, up $0.2 billion from the June deficit of $43.5 billion (revised). Imports decreased to $238.1 billion, falling $0.4 billion from June. July exports were $194.4 billion, a decrease of $0.6 billion from June. Year‐to‐date, the goods and services deficit increased 9.6 percent from the same period in 2016.

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.4 percent in August to 128.8 (2010=100), following a 0.3 percent increase in July, and a 0.6 percent increase in June. According to the Conference Board analysts, the August gain was consistent with continuing growth in the U.S. economy for the second half of the year. The impact of the recent hurricanes was not fully reflected in the leading indicators yet, but underlying trends suggested that the current pace of growth should continue in the near term.

The Institute for Supply Management’s Manufacturing Index increased 2.5 percentage points in August to 58.8 percent, compared with the July level of 56.3 percent. Among the 18 manufacturing industries tracked in the index, 14 reported growth between July and August, while apparel, leather, and allied products, primary metals, and furniture and related products recorded contractions. The overall economy grew for the 99th consecutive month.

The Institute for Supply Management’s Non‐Manufacturing Index increased 1.4 percentage points in August to 55.3 percent, compared with the July level of 53.9 percent. Of the 18 non‐manufacturing industries, 15 reported growth between July and August while the agriculture, forestry, fishing, and hunting, and transportation and warehousing industries reported contractions. The non‐manufacturing sector grew for the 92nd consecutive month.

Human resources consultancy Aon Hewitt released its annual salary increase survey and found that spending on variable pay for things such as bonuses and merit pay is projected to decline to 12.5 percent of companies’ payroll budget in 2018, the lowest level since 2013. According to researchers, the decrease may indicate that companies are preserving base pay as they prepare for political and economic uncertainty. The drop is a reversal from the trend in recent years as the percent of resources devoted to bonuses and merit pay has grown.

Analysis of the U.S. Census Bureau’s 2016 American Community Survey shows that incomes of middle‐class Americans rose to the highest level ever recorded and poverty rates continued to decline. The data showed that real median household income rose to $59,039 in 2016, a 3.2 percent increase from the prior year’s level and was the second‐consecutive year of healthy gains. The nation’s poverty rate fell to 12.7 percent, returning to pre‐recession levels.


Despite the increase in incomes, the report noted income inequality remains high with the top‐fifth of earners taking home more than half of overall income.

Local

The University of Colorado Boulder Leeds School of Business released their fourth quarter Leeds Business Confidence Index (LBCI) for 2017. The overall expectations for both the national economy and state economy slowed for the second consecutive quarter in the fourth quarter of 2017, but the outlook remained positive. The index value of 56.5 for the fourth quarter of 2017 was down 3.2 points from last quarter but up 3.5 points from the fourth quarter of 2016. Of the index components, national expectations decreased from 54.6 to 51.4, and state expectations fell from 60.9 in the third quarter to 58.8 in the fourth. LBCI panelists responded that there were concerns in Colorado about labor market shortages and statewide housing prices. For the nation, respondents expressed concern about the general political landscape.

The U.S. Federal Reserve released its most recent “Beige Book Survey” and reported that economic activity in the 10th district, which includes Colorado, increased modestly during the six weeks between September and early October. Professional, high‐tech, and wholesale trade firms reported a strong increase in sales and manufacturing activity expanded at a moderate pace. Further, energy activity expanded and financial firms reported steady loan demand and stable deposit levels. Contacts in most sectors reported modest gains in wages and expectations were for moderate growth in future months.

According to the biennial Colorado Health Access Survey results released by the Colorado Health Institute, the uninsured rate in Colorado fell in 2017 to 6.5 percent, maintaining record‐low levels. Researchers noted the slight drop in 2017 was not statistically significant, meaning that the state’s uninsured rate has effectively held steady since 2015. Prior to implementation of the Affordable Care Act, Colorado’s uninsured rate was 14.3 percent. Concurrently, the survey found that fewer than half of Coloradans now receive their health insurance through their employer, down from 57.7 percent as recently as 2009, and the first time businesses have provided a minority of health‐care plans in memory. Greater portions of the state’s insured residents are getting coverage through Medicare and from plans they purchase on the individual market.

According to the U.S. Bureau of Economic Analysis (BEA), real gross domestic product (GDP) in the Denver‐Aurora‐Lakewood MSA reached $197.9 billion in 2016, making it the 18th largest economy of the 382 MSAs. Real GDP increased 2.4 percent in 2016, outpacing the average growth rate of the nation’s metro areas. The New York‐Newark‐Jersey City MSA is the country’s largest economy at nearly $1.7 trillion. The Lake Charles, La. MSA grew 8.1 percent, the fastest pace in the nation.

While Colorado has one of the 10 most dynamic economies in the country, some areas of the state are among the most distressed communities in the U.S., according to a new study from the Economic Innovation Group. Communities considered distressed in the study included Saguache and Walsenburg, areas that had high numbers of residents without high school diplomas, high housing vacancy, high numbers of unemployed adults, high poverty, and lower income. In addition, the study found uneven growth among states. Indeed, the 10 most dynamic states accounted for 39 percent of new companies in the U.S.

State economic forecasts released by the Colorado Legislative Council and the Governor’s Office of State Planning and Budgeting offered an encouraging outlook with the state economy continuing to grow. Oil prices are rebounding and energy companies added rigs in Colorado for the first time since 2015. However, parts of rural Colorado are expected to lag behind the Front Range due a steep drop in agricultural commodity prices and the ongoing struggles in the coal industry.

A new report from traffic data firm Inrix found that the economic cost of traffic in Denver could reach $9.5 billion in the next 10 years, ranking the city No. 14 nationally. Researchers found that Denver has 2,258 traffic hotspots that create 16,636 traffic jams annually.


Labor Force and Employment

Employment in Metro Denver rose 2.1 percent between August 2016 and 2017, or an additional 33,900 jobs during the period. Employment growth consisted of a 2 percent increase in the Denver‐Aurora‐Lakewood MSA, or an additional 28,400 jobs, and a 3 percent increase in the Boulder MSA, representing 5,500 jobs.

Nine of the 11 supersectors recorded growth over‐the‐year. Nearly 62 percent of the over‐the‐year absolute increase can be attributed to growth in leisure and hospitality, education and health services, and professional and business services. The largest sector by employment, professional and business services, increased 2.2 percent and created 6,400 jobs over‐the‐year.

The transportation, warehousing, and utilities supersector reported the largest percentage increase over‐the‐year in employment, rising 4.5 percent and added 2,500 jobs. The leisure and hospitality supersector created the most jobs during the period (7,300 jobs), representing a 3.8 percent increase. The information sector (‐4.4 percent) and the manufacturing supersector (‐0.7 percent) both recorded declines in employment over‐the‐year.

Colorado employment rose 1.9 percent in August compared with the previous year’s level, adding 48,600 new jobs over the same period. National employment levels increased 1.5 percent over‐the‐year, with the addition of 2.1 million jobs.

Nonfarm Wage & Salary Employment (000s, not seasonally adjusted)

Month of Month of Month of

Year‐to‐Date

Average

Year‐to‐Date

Average

Year‐to‐Date

Average

Annual Growth

Rate

Annual Growth

Rate

Aug‐17 (p) Jul‐17 (r) Aug‐16 2017 2016 % Change 2012 2007

Total 11‐County Metro Denver* 1,663.3 1,664.2 1,629.4 1,643.7 1,608.8 2.2% 2.9% 2.1%

Denver‐Aurora‐Lakewood MSA 1,474.8 1,475.6 1,446.4 1,455.1 1,425.2 2.1% 2.9% 2.1%

Boulder MSA 188.5 188.6 183.0 188.5 183.6 2.7% 2.7% 2.2%

Natural Resources & Construction 106.7 105.1 105.1 102.4 101.9 0.5% 5.1% ‐1.4%

Manufacturing 86.3 86.6 86.9 85.9 86.4 ‐0.5% 2.2% ‐1.5%

Wholesale & Retail Trade 238.1 237.8 233.4 234.9 230.9 1.7% 2.2% 2.1%

Transp., Warehousing & Utilities 58.1 58.7 55.6 57.2 54.8 4.4% 2.7% 2.8%

Information 52.7 54.7 55.1 53.5 54.6 ‐2.0% ‐0.9% 0.8%

Financial Activities 116.5 115.8 114.0 114.6 112.4 1.9% 2.1% ‐0.6%

Professional & Business Services 302.6 301.3 296.2 296.6 289.8 2.3% 5.1% 5.7%

Education & Health Services 215.3 216.0 208.1 214.9 206.6 4.0% 3.7% 3.9%

Leisure & Hospitality 197.3 202.1 190.0 189.2 181.4 4.3% 3.4% 2.6%

Other Services 64.8 63.8 62.3 63.0 60.9 3.6% 2.8% 2.0%

Government 224.9 222.3 222.7 231.4 229.2 1.0% 0.9% 1.8%

Federal Gov't 30.8 31.1 30.8 30.9 30.7 0.9% ‐0.8% ‐0.7%

State Gov't 56.0 56.4 53.9 60.7 58.8 3.3% 1.8% 2.8%

Local Gov't 138.1 134.8 138.0 139.8 139.8 0.0% 0.9% 2.1%

Colorado 2,666.9 2,663.8 2,618.3 2,635.6 2,584.9 2.0% 2.4% 2.3%

United States 146,541 146,330 144,441 145,691 143,508 1.5% 1.7% 1.1%

*Includes the Denver‐Aurora‐Lakewood MSA (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties) and the Boulder MSA (Boulder County).

Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary (r) =revised


Metro Denver Industry Cluster Headlines

Aerospace

Special Aerospace Services opened a new 25,000‐square‐foot automated machining and specialized manufacturing facility in Arvada. The firm plans to expand manufacturing activities and will more than double its workforce to 30 people in the next two years.

United Launch Alliance (ULA) successfully launched NROL‐42, a payload for the National Reconnaissance Office (NRO) in support of national security, aboard an Atlas V Evolved Expendable Launch Vehicle. NROL‐42 marks the 25th ULA‐launched NRO mission, the company’s sixth launch in 2017, and the 121st successful launch since the company formed in December 2006.

The Tropospheric Emissions: Monitoring of Pollution (TEMPO) instrument, designed and built by Ball Aerospace for NASA, has completed spectrometer testing and verification. TEMPO was selected by NASA as the first Earth Venture‐Instrument to provide hourly measurements of air quality across North America. This instrument will make precise measurements of the key constituents of air pollution, including nitrogen dioxide, ozone, sulfur dioxide, and atmospheric aerosols that have the greatest impact on human health and agriculture productivity.

Ball Aerospace successfully delivered the Joint Polar Satellite System‐1 (JPSS‐1), the National Oceanic and Atmospheric Administration’s (NOAA) next‐generation polar orbiting weather satellite, to Vandenberg Air Force Base in California for its scheduled launch in early November 2017. This significant milestone follows a successful pre‐ship review with NASA at Ball’s Boulder campus. The JPSS series of polar‐orbiting weather satellites will work as the foundation of NOAA's operational environmental forecasting system for the next 20 years.

Beverage Production

Swire Coca‐Cola USA, which distributes Coca‐Cola products across the state, plans to take over the company’s Denver bottling plant by the end of October and expand its local staff. The company built a new distribution center in Denver’s Stapleton neighborhood in 2014, opened a distribution center in Pueblo in 2016, and opened a distribution facility in Johnstown in early 2017 as a result of increasing product demand.

Colorado State University (CSU) is building a pair of breweries inside Lory Student Center’s Ramskeller Pub. The 264‐gallon system—the largest housed at any four‐year university in the nation—is part of the university’s four‐year bachelor’s degree track specializing in brewing. CSU's new systems will help the four‐year‐old fermentation science and technology program grow further.

Broadcasting & Telecommunications

CSG International Inc. plans to add 50 jobs and move its offices from northern Douglas County to the Denver Tech Center in the fall of 2017. The company is adding jobs at its sites around the world to expand product offerings and improve sales efficiency.

Energy – Cleantech

Namasté Solar will relocate the headquarters for its residential division in Boulder to accommodate its growth. The company has outgrown its current Boulder headquarters in north Boulder.

IT‐Software

According to a new report released by Software.org: the BSA Foundation, the U.S. software industry contributed $1.14 trillion in indirect and induced economic impact in 2016. Software industry employment accounted for 2.9 million jobs in 2016, a 14.6 percent increase over 2014. In Colorado, the software industry added $14 billion in economic impact, accounted for 140,271 jobs, and invested $1.1 billion in research and development. The report found that 35 states experienced an increase of at least 20 percent in economic impact between 2014 and 2016, led by Idaho and North Carolina.


Revert Inc., a provider of data‐protection and electronic‐waste recycling services, moved its headquarters from Gunbarrel to Louisville. The new 5,300‐square‐foot site will help support the company’s expansion plans and includes additional research and development space, warehouse space, and two dedicated docks.

Businessolver Inc., a benefits administration software and services technology company, plans to grow to over 200 people in Greenwood Village in the next few months. The company began with a 30‐person office in 2014 and has grown more than fivefold to 160 IT professionals and customer service representatives. The company continues to grow its local client services, technology, and call center operations.

Reservation technology company FareHarbor plans to quintuple its Denver headquarters space. The company plans to double its staff of 100 Denver employees within two years of moving to the 25,000‐square‐foot office.

Oracle Corp. plans to cut 200 employees in Broomfield, in addition to 2,300 jobs in its hardware and Solaris operating system divisions in California, Texas, Massachusetts, and India. The company continues to focus on its growing cloud computing efforts.

Choozle, creator of the digital advertising platform, expanded its Five Points office after doubling its employees this year, from 26 to 54. New hires included developers and engineers and coincided with the launch of the company’s new drag and drop advertising tool.

Other Industry Headlines

Denver‐based Travelers Haven, which arranges short‐term housing for corporate employees, plans to add up to 172 new jobs over the next eight years as it grows to meet expanding demand. The company cited Denver’s attractive lifestyle and pro‐business climate as factors helping to attract workers to its Cherry Creek offices.

Boulder‐based The Pro’s Closet plans to add 15 workers to its team of 40 over the next 18 months, after raising $9 million in funding. The company buys and sells used bicycles and parts online and will also use the funding to overhaul its online platform and expand its warehouse.

University of Phoenix (UOP) is restructuring and has ceased enrolling new students at its 32 campuses and learning centers across the nation, including locations in Lone Tree, Westminster, and Colorado Springs. UOP officials stated they will continue to serve existing students at these locations, at other approved university locations, or through online programs until those students graduate.

Employment Outlook

Employers in the Denver‐Aurora‐Broomfield MSA expect weaker hiring expectations through the fourth quarter of 2017, according to the Manpower Employment Outlook Survey. The percentage of employers planning to increase employment levels fell 10 percentage points between the third and fourth quarters, with 20 percent of companies expanding their employment levels. The majority of companies intend to maintain staff levels through the fourth quarter of the year, with the level rising 4 percentage points above the prior quarter’s level.

Sectors with the best job outlooks were construction, durable goods manufacturing, transportation and utilities, and wholesale and retail trade. Employers in financial activities and government plan to reduce staffing levels, while hiring in nondurable goods manufacturing, information, and other services is expected to remain unchanged.


Employment Outlook Survey

Quarter 4 Quarter 3 Quarter 4 YTD YTD Ann Avg 2017 2017 2016 2017 2016 2012

Denver‐Aurora‐Broomfield MSA Percent of Companies Hiring 20% 30% 28% 26% 25% 17%

Percent of Companies Laying Off 9% 5% 6% 6% 4% 6%

Percent of Companies No Change 68% 64% 65% 66% 70% 74%

Percent of Companies Unsure 3% 1% 1% 2% 2% 3%

United States

Percent of Companies Hiring 21% 24% 22% 22% 22% 18%

Percent of Companies Laying Off 6% 4% 6% 5% 5% 8%

Percent of Companies No Change 71% 70% 69% 72% 71% 71%

Percent of Companies Unsure 2% 2% 3% 2% 2% 4%

Source: Manpower Inc.

Unemployment

Metro Denver’s not‐seasonally adjusted unemployment rate reached its lowest level since 2000, falling 0.3 percentage points to 2.1 percent in August compared with July. The Metro Denver unemployment rate also fell 0.9 percentage points over‐the‐year from the August 2016 level of 3 percent.

The seven Metro Denver counties reported unemployment rates below 2.5 percent in August. Boulder and Douglas counties reported the lowest unemployment rates of the seven‐county region with each recording a 1.9 percent rate. Adams County recorded the largest over‐the‐year decline, falling 1.1 percentage points to 2.4 percent.

All seven counties reported decreases in unemployment rates over‐the‐month ranging between 0.2 and 0.3 percentage points. Declines of at least 0.8 percentage points were recorded in all seven counties over‐the‐year.

The Colorado unemployment rate decreased 0.3 percentage points over‐the‐month to 2.2 percent in August 2017. The national unemployment rate fell 0.1 percentage points to 4.5 percent. North Dakota had the lowest unemployment rate in the country at 2.1 percent.


Labor Force Statistics (000s, not seasonally adjusted civilian labor force)

Aug 2017 (p) 2017 YTD AVG 2016 YTD AVG 2012 2007

Labor Force

Unemploy‐ment Rate

Labor Force


Labor Force


Ann Avg Unemploy‐ ment Rate

Ann Avg Unemploy‐ment Rate

Metro Denver 1,762.0 2.1% 1,733.4 2.5% 1,684.6 3.3% 7.6% 3.8%

Adams County 263.9 2.4% 259.5 2.8% 252.9 3.9% 9.4% 4.2%

Arapahoe County 357.0 2.2% 350.7 2.5% 340.9 3.3% 7.7% 3.7%

Boulder County 187.7 1.9% 186.4 2.2% 180.2 2.9% 6.2% 3.3%

Broomfield County 38.1 2.1% 37.4 2.4% 36.3 3.1% 6.6% 3.5%

Denver County 401.0 2.2% 394.1 2.5% 383.2 3.4% 7.9% 4.1%

Douglas County 184.4 1.9% 181.1 2.2% 175.9 2.9% 6.0% 3.1%

Jefferson County 330.0 2.1% 324.3 2.4% 315.2 3.2% 7.4% 3.6%

Colorado 3,009.8 2.2% 2,961.5 2.6% 2,884.4 3.6% 7.9% 3.7%

United States 160,863 4.5% 160,247 4.6% 159,051 5.0% 8.1% 4.6%

Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary

August unemployment insurance claims decreased in Metro Denver, falling 2.4 percent between July and August. Further, the August level was 7.7 percent lower than the year‐ago level. The average number of claims in August year‐to‐date was at the lowest level recorded since data collection began in 2004 (1,092 claims).

Claims throughout Colorado declined over‐the‐month, falling 2.2 percent. Colorado’s unemployment insurance claims decreased 10.8 percent between August 2016 and 2017. The average number of claims in August fell to a low not posted since late 2007.

Weekly First‐Time Unemployment Insurance Claims

Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg 2007 Aug‐17 Jul‐17 Aug‐16 2017 2016 % Change 2012

Metro Denver 996 1,021 1,079 1,092 1,224 ‐10.8% 1,627 1,211

Colorado 1,726 1,764 1,934 2,025 2,364 ‐14.3% 3,123 2,211

Note: Reference week data includes the 19th day of the month for all months except November and December, which include the 12th day of the month. Source: Colorado Department of Labor and Employment, Labor Market Information.

Consumer Sector

Sentiment & Spending

The Consumer Confidence Index for the U.S. declined in September, reporting a level of 119.8 from the revised August level of 120.4, a 0.5 percent decrease over‐the‐month. The dip in Consumer Confidence in September was primarily a result of Hurricanes Harvey and Irma. However, the national index for September 2017 was 15.7 percent higher than the September 2016 level.

Analysts at The Conference Board stated that consumers’ assessment of present‐day conditions decreased in September as the Present Situation Index declined from 148.4 to 146.1. However, the Expectations Index rose marginally from 101.7 to 102.2.


Colorado is included in the Mountain Region Index and the area reported a decrease in consumer confidence between August and September. The index fell to 118.2 in September from the August revised level of 121, decreasing 2.3 percent over‐the‐month. Similar to the U.S., the index was 15.7 percent higher than the year‐ago level. The Present Situation Index fell 6.1 percent to 138.3 in September from 147.3 in August (revised), while the Expectations Index increased 1.3 percent to 104.8 from 103.5 in August (revised).

Consumer Confidence Index

Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg Sep‐17 (p) Aug‐17 (r) Sep‐16 2017 2016 % Change 2012 2007

Mountain 118.2 121.0 102.2 126.9 100.3 26.4% 68.7 131.8

United States 119.8 120.4 103.5 118.6 97.2 22.0% 67.1 103.4

Source: The Conference Board. (p) = preliminary (r) = revised

National retail sales increased through August, with total retail sales rising 3.2 percent above the August 2016 total. Despite the over‐the‐year increase, retail sales fell 0.2 percent below the July 2017 level to $474.8 billion. Motor vehicle sales rose 1.5 percent over‐the‐year, but decreased 1.6 percent between July and August. The building materials sector reported an increase of 7.5 percent between August 2016 and 2017, but fell 0.5 percent over‐the‐month. Gasoline sales rose 6.4 percent over‐the‐year and increased 2.5 percent over‐the‐month. Core retail sales, which excludes motor vehicles, building materials, and gasoline sales, recorded an over‐the‐year increase of 0.5 percent but decreased 0.1 percent between July and August.

Retail sales in Metro Denver increased 1.3 percent between February 2015 and 2016, the latest available data. Retail sales for February 2016 totaled $7.4 billion, an absolute increase of about $95 million compared with the February 2015 total of over $7.3 billion. Four of the seven Metro Denver counties reported year‐over‐year increases, with Douglas County (+29.2 percent) and Adams County (+2.1 percent) recording the largest increases. The City and County of Broomfield and Jefferson County also recorded growth in retail sales over‐the‐year, rising 1.9 percent and 1.1 percent, respectively. The largest decline in retail sales between February 2015 and 2016 was in Boulder County, falling 4.6 percent, followed by the City and County of Denver (‐2.8 percent) and Arapahoe County (‐2.3 percent). Six of the seven counties in Metro Denver recorded declines in sales between January and February, with Douglas County (+9 percent) recording the only increase in sales over‐the‐month. Retail sales in Colorado were unchanged over‐the‐year, recording nearly $12.4 billion in retail sales in February 2016, but retail sales were 1.6 percent lower over‐the‐month.

Total Retail Sales ($000s)

Month of Month of Month of YTD Total YTD Total YTD Total Annual Growth

Annual Growth

Feb‐16 Jan‐16 Feb‐15 2016 2015 % Change 2011 2006

Total Metro Denver 7,440,821 7,526,929 7,345,759 14,967,750 15,400,667 ‐2.8% 6.4% 9.8%

Adams County 1,478,241 1,508,804 1,447,453 2,987,045 2,967,019 0.7% 10.4% 13.0%

Arapahoe County 1,428,805 1,442,657 1,462,199 2,871,462 3,081,120 ‐6.8% 3.1% 8.5%

Boulder County 616,381 676,428 646,273 1,292,809 1,377,653 ‐6.2% 8.2% 6.6%

Broomfield County 155,176 161,049 152,248 316,225 310,734 1.8% 0.2% 7.6%

Denver County 1,872,968 1,887,623 1,927,396 3,760,591 3,974,469 ‐5.4% 1.9% 15.5%

Douglas County 735,207 674,610 568,983 1,409,817 1,218,344 15.7% 17.0% 5.0%

Jefferson County 1,154,043 1,175,758 1,141,207 2,329,801 2,471,328 ‐5.7% 8.2% 3.9%

Colorado 12,375,305 12,581,790 12,371,256 24,957,095 25,944,316 ‐3.8% 7.0% 9.9%

Source: Colorado Department of Revenue.

Price Changes

The U.S. Consumer Price Index (CPI) increased 0.3 percent in August to 245.5 and rose 1.9 percent over‐the‐year. Six of the eight CPI components were up between August 2016 and 2017, led by housing (2.9 percent) and transportation


(2.8 percent). However, the apparel index fell 0.6 percent and the education and communication index declined 2.6 percent over the same period.

For the Denver‐Boulder‐Greeley area, the all items index increased by 3.1 percent from the first half of 2016 to 2017. The housing index (+5.1 percent) and transportation index (+4.1 percent) posted the largest increases over‐the‐year, with apparel reporting the largest decrease of 6.8 percent.

The increase in prices for the first half of 2017 pushed up inflation in Metro Denver to its highest level since 2011.

According to the AAA Daily Fuel Gauge Report, the national average fuel price for September increased 8 percent from August to $2.57 per gallon. The September average fuel price was 16.3 percent above the prior year’s level ($2.21 per gallon). Metro Denver reported a 6.5 percent increase in the average fuel price between August and September. The average fuel price of $2.44 per gallon for September in Metro Denver was $0.13 lower than the national average. The area reported average fuel prices that were 15.4 percent higher in September 2017 than the previous year’s level.

Stock Market

All four stock market indices improved between August and September, while only three of the four improved over‐the‐year. The Bloomberg Colorado index rose 1.3 percent over‐the‐month to 508, but was 2.2 percent below the prior year’s level. The DJIA rose 2.1 percent between August and September and rose 22.4 percent over‐the‐year. The NASDAQ recorded an increase over‐the‐month of 1 percent, and recorded a 22.3 percent increase over‐the‐year. The S&P 500 recorded a 1.9 percent increase over‐the‐month and increased 16.2 percent between September 2016 and 2017.

Stock Market Indexes

Month of Month of Month of YTD Return YTD Return Ann Avg Return

Ann Avg Return

Sep‐17 Aug‐17 Sep‐16 2017 2016 2012 2007

Bloomberg Colorado 507.9 501.6 519.5 ‐1.8% 4.5% 3.5% 17.7%

S&P 500 2,519.4 2,471.7 2,168.3 12.5% 6.1% 13.4% 3.5%

NASDAQ 6,496.0 6,428.7 5,312.0 20.7% 6.1% 15.9% 9.8%

DJIA (Dow Jones) 22,405.1 21,948.1 18,308.2 13.4% 5.1% 7.3% 6.4%

Sources: Bloomberg.com; Yahoo! Finance.

Travel & Tourism

The 613‐room Denver Marriott City Center will be rebranded as the Hilton Denver City Center beginning December 1, 2017. The hotel has recently undergone $27 million in renovations over the last three years including all guest rooms, the lobby, and meeting areas. The Hilton Denver City Center will be the only downtown Denver hotel with the flagship Hilton brand.

The first joint AC by Marriott/Le Méridien hotel in the world, and the first hotel combining Marriott International and Starwood brands, opened in Denver. The jointly branded hotel features a combined 495 rooms at the corner of 15th and California streets. The 20‐story hotel also offers 12,000 square feet of event space over eight rooms, including the 5,700‐square‐foot Grove Ballroom that can hold as many as 400 people at one time.

The Crowne Plaza, Denver completed a $22 million renovation including a new restaurant, new lobby space, and 16 additional rooms. The two‐year renovation was part of Accelerate, a $200 million brand‐transformation initiative across 400 facilities in the Crowne Plaza Hotels & Resorts chain. The changes are expected to draw more business travelers and visitors looking for lower‐price options.

Several of the state’s 27 ski resorts have unveiled or will unveil new upgrades for the 2017‐18 ski season. Arapahoe Basin added 371 new acres of difficult and extreme terrain in its Steel Gullies area, and will add another 97 acres of intermediate trails in its Beavers area. Winter Park Resort added a new trail allowing easier access to the Mary Jane side. Further, Vail Resorts upgraded lifts at all four of its resorts, Copper Mountain installed a new lift to serve beginner


terrain in its West Village, and Wolf Creek Ski Area added a covered conveyor lift. Several of the resorts also added year‐round outdoor coasters, and family and beginner facilities.

The average hotel occupancy rate in Metro Denver fell 0.1 percentage points to 85.9 percent occupancy in August compared with the July level. The August level was also 0.3 percentage points below the previous year’s level. The average room rate for August was $153.90 per night, 0.1 percent below the July level, but 1.6 percent higher over‐the‐year.

Metro Denver Hotel Statistics

Month of Month of Month of YTD Avg YTD Avg YTD Avg Annual Annual

Aug‐17 July‐17 Aug‐16 2017 2016 % Change 2012 2007

Percent of Hotel Rooms Occupied 85.9% 86.0% 86.2% 77.1% 77.1% 0.0% 68.0% 67.0%

Average Hotel Room Rate $153.90 $154.02 $151.45 $144.01 $141.23 2.0% $111.78 $111.21

Source: Rocky Mountain Lodging Report.

Norwegian Air International began flights from Denver International Airport (DEN) to London’s Gatwick Airport. The new service is expected to create more than 600 local jobs and will generate a roughly $7 million annual economic impact. The flight operates twice‐weekly, with services increasing to three days a week Nov. 2.

Sun Country Airlines will launch seasonal nonstop service from DEN to Mazatlán, Mexico once‐a‐week between Jan. 24, 2018 to Mar. 7, 2018. Mazatlán ranks as DEN’s second‐largest underserved market in Mexico with 6,000 annual passengers. With the addition, DEN now provides nonstop service to 26 international destinations in 11 countries.

DEN ranked fifth in satisfaction among mega airports with over 32 million annual passengers, according to the 2017 J.D. Power North America Airport Satisfaction Survey. DEN’s improvements to the security check process, faster check‐in and baggage check, and expansive retail options contributed to its high rank.

Spokespeople for DEN reported that more than 5.8 million passengers passed through the airport in July, increasing 3.3 percent from the 5.7 million passengers in June. The July 2017 level was also 6.7 percent higher than the July 2016 level, recording 365,160 more passengers through the airport. July 2017 was the busiest July in the airport’s history and was also the busiest month in Denver aviation history.

Denver International Airport Passengers

Month of Month of Month of YTD Total YTD Total YTD Total Annual Annual

July‐17 June‐17 July‐16 2017 2016 % Change 2012 2007

Number of Airline Passengers 5,839,661 5,650,682 5,474,503 35,407,937 33,011,136 7.3% 53,156,278 49,863,286

Source: Denver International Airport, Traffic Statistics.

Residential Real Estate

East West Partners is building a $200 million, 334‐unit condominium project near Denver Union Station. The Coloradan is slated for completion in 2019 and includes condominiums from studios to penthouses, ranging in price from $255,000 up to $3.3 million. Thirty‐three units will be affordable housing units that will sell for less than $300,000 and will be income restricted, with buyers making no more than $64,000 for two people. Amenities include 19,000 square feet of ground‐floor retail and a 447‐space parking garage.

Mill Creek Residential plans to build an 8‐story, 241‐unit apartment complex at Speer Boulevard and Grant Street in Denver. The project, named Modera West Wash Park, includes an underground parking garage, fitness center, and rooftop pool. The project is slated for completion in January 2020.

The 123,378‐square‐foot, 146‐unit WaterWalk Hotel Apartments opened in Centennial. The complex combines apartments with extended‐stay hotel units in one building, which is geared toward corporate living for training, relocating, and special projects.


The Urban Land Conservancy and Medici Communities will build a 65‐unit affordable apartment project on 1.5 acres at the corner of 36th and Walnut streets in Denver. The Walnut Street Lofts will be reserved for people making between 30 percent and 60 percent of the area’s median income. The project, slated for completion in 2019, will offer rents ranging from $400 for a one‐bedroom to $1,200 for a three bedroom.

Koelbel Urban Homes purchased 1.2 acres in Lincoln Park in Denver for $2 million. The vacant site was purchased from the Denver Housing Authority and is planned for 58 townhomes. The CityHomes at Lincoln Park project will combine market rate townhomes in the $400,000’s with affordable units priced for various levels of area median income.

Home Resales

Metro Denver

Existing home sales in Metro Denver increased 3.9 percent over‐the‐month to 5,893 homes sold, but were 3.7 percent lower between August 2016 and 2017.

Unsold homes on the market were 0.1 percent higher in August than July and were 0.5 percent above the previous year’s inventory level, with 33 more homes on the market over‐the‐year.

The average sales price for single‐family homes rose 6.6 percent over‐the‐year to $467,557, while the average sales price of condominiums ($277,634) increased 9.8 percent during the same period.

The average sales price of a single‐family home was $28,999 higher in August 2017 compared with one‐year earlier, while the average price of a condominium increased $24,781.

Previously‐Owned Home Sales Activity

Month of Month of Month of YTD Total YTD Total YTD Total Ann Total Ann Total


Home Sales (Closed) 5,893 5,673 6,121 40,129 39,981 0.4% 45,203 49,789

Unsold Homes on Market 7,360 7,352 7,327 7,360 7,327 0.5% 10,085 27,911

Average Sales Price‐Single Family $467,557 $477,503 $438,558 $466,325 $433,357 7.6% $304,178 $310,418

Average Sales Price‐Condo $277,634 $280,617 $252,853 $273,848 $250,286 9.4% $179,616 $180,321

Median Sales Price‐Single Family $400,000 $405,000 $370,000 $250,000 $245,000

Median Sales Price‐Condo $250,000 $250,000 $227,500 $142,000 $150,000

Source: Colorado Comps LLC; Denver Metro Association of Realtors; REcolorado.

National

National existing‐home sales declined 1.7 percent in August 2017 to a seasonally adjusted annual rate of 5.35 million from 5.44 million in July, according to the National Association of Realtors (NAR). Existing‐home sales in August fell for the fourth time in five months as strained supply levels continued to subdue overall activity. Despite the over‐the‐month decline, existing‐home sales increased 0.2 percent above the year‐ago level.

Total housing inventory at the end of August declined 2.1 percent to 1.88 million existing homes available for sale, but was 6.5 percent lower than a year ago (2.01 million), falling year‐over‐year for 27 straight months.

First‐time buyers were 31 percent of sales in August, which is down from 33 percent in July and is the lowest share since August 2016. NAR economists said the ongoing rise in home prices continues to strain budgets of some of the would‐be first‐time buyers and low inventory continues to pressure affordability in the lower‐ and mid‐price ranges.


Properties typically stayed on the market for 30 days in August, which is unchanged from July and down from 36 days a year ago. Fifty‐one percent of homes sold in August were on the market for less than a month.

Home Prices

NAR data shows the median existing‐home price for all housing types in August was $253,500, up 5.6 percent from August 2016 ($240,000). August’s price increase marked the 66th consecutive month of year‐over‐year price appreciation. Median housing prices increased over‐the‐year in each of the nation’s four regions. The West reported the largest increase between August 2016 and 2017, rising 7.7 percent to a median home price of $374,700. The Midwest reported the lowest median home price ($200,500), which was 5 percent above the previous year’s level. The South also recorded over‐the‐year growth, rising 5.4 percent to a median home price of $220,400. The Northeast reported an over‐the‐year increase of 5.6 percent to $289,500.

A separate NAR report revealed that the median price in the Boulder MSA ($593,200) during the second quarter of 2017 was 8.2 percent higher over‐the‐quarter and was 7.9 percent higher over‐the‐year. The Denver‐Aurora MSA ($424,500) was 7.2 percent higher than the first quarter and 7.6 percent above the year‐ago level.

The national median sales price during the second quarter of 2017 rose 10.1 percent over‐the‐quarter to $255,600 and was 6.2 percent higher than the previous year’s level.

Of the 178 MSAs included in the second quarter 2017 report, the Boulder MSA reported the sixth‐highest median price, while the Denver‐Aurora MSA median price was the 13th highest.

Median Sales Price of Existing Single‐Family Homes ($000s)

Quarter 2 Quarter 1 Quarter 2 YTD Avg YTD Avg YTD Avg Median Median

2017 (p) 2017 (r) 2016 2017 2016 % Change 2012 2007

Boulder MSA $593.2 $548.4 $549.6 $570.8 $514.7 10.9% $383.7 $376.2

Denver‐Aurora MSA $424.5 $396.1 $394.4 $410.3 $381.7 7.5% $252.4 $245.4

United States $255.6 $232.2 $240.7 $243.9 $229.0 6.5% $177.2 $217.9

Source: National Association of REALTORS. (p) =preliminary (r) =revised

According to the S&P/Case‐Shiller home price index, Denver housing prices continued to appreciate in July for the 19th‐straight month. The Denver index increased 0.6 percent over‐the‐month to 200.98 in July and rose 7.2 percent between July 2016 and July 2017. The July 2017 level was the highest level recorded in Denver in the history of the 27‐year data series.

Seattle (+13.5 percent), Portland (+7.6 percent), and Las Vegas (+7.4 percent) recorded the largest increases over‐the‐year. Denver (+7.2 percent) ranked sixth.

Washington, D.C. (+3.3 percent), Chicago (+3.3 percent), and Cleveland (+3.8 percent) recorded the smallest increases over‐the‐year.


The national home price index increased 0.7 percent over‐the‐month and 5.9 percent over‐the‐year.

Analysts for the index reported that home price appreciation continues to be driven by tighter inventory. While prices continue to increase, analysts stated that other housing indicators may be showing signs of leveling off. Sales of both new and existing homes have slipped since March and housing supply continues to be constrained in the south as a result of Hurricanes Harvey and Irma as cities start to rebuild.

Foreclosures

Metro Denver recorded a 25.3 percent increase in foreclosures in August over the prior month and a 2.2 percent increase over the year‐ago level. The increase in the number of Metro Denver foreclosures was primarily the result of a spike in foreclosure activity in Arapahoe County over‐the‐month. However, foreclosures were down 7.9 percent year‐to‐date, compared with the same period in 2016.

Six of the seven counties recorded declines in foreclosures over‐the‐year. Douglas County reported the largest decrease in foreclosures over‐the‐year, falling 42.4 percent, followed by the City and County of Broomfield (‐40 percent). Arapahoe County was the only county to record an increase in foreclosures over‐the‐year, rising 68.6 percent.

Real Estate Foreclosures

Month of Month of Month of YTD Total YTD Total YTD Total Annual Total Annual Total


Total Metro Denver* 277 221 271 2,021 2,195 ‐7.9% 15,013 27,355 Adams County 50 53 56 439 478 ‐8.2% 3,183 6,192 Arapahoe County 86 49 51 475 510 ‐6.9% 3,589 6,237 Boulder County 18 11 20 108 131 ‐17.6% 783 981 Broomfield County 3 2 5 27 25 8.0% 210 252 Denver County 60 54 62 450 482 ‐6.6% 3,064 8,240 Douglas County 19 27 33 192 215 ‐10.7% 1,534 1,865 Jefferson County 41 25 44 330 354 ‐6.8% 2,650 3,588

*The total number of election and demand setups (initial filings) received by county public trustees. Filings may be subsequently cured or withdrawn. Sources: County public trustees

Five of the seven counties reported increases in foreclosures between July and August, ranging from 11.1 percent in the City and County of Denver to 75.5 percent in Arapahoe County. Douglas and Adams counties recorded the only over‐the‐month declines in foreclosures, falling 29.6 percent and 5.7 percent, respectively.

New Home Sales

The Census Bureau report on new home sales stated that national home sales decreased in August to 560,000 annual sales from the revised July level of 580,000 annual sales. The August home sales level was 3.4 percent below July and 1.2 percent below the previous year’s level.

The Northeast (+65.2 percent), the Midwest (+4.5 percent), and the West (+4.3 percent) recorded increases in home sales between August 2016 and 2017, while the South (‐9.2 percent) recorded a decline.

Three of the four regions reported over‐the‐month decreases in home sales. The South


reported the largest over‐the‐month decrease in sales, falling 4.7 percent to 307,000 sales, followed by the West, which recorded a 2.7 percent decrease in sales. Sales in the Northeast (38,000 sales) fell 2.6 percent over‐the‐month, while sales in the Midwest were unchanged from the prior month.

New Home Construction

National

Builder confidence for newly‐built single‐family homes fell 3 points to a level of 64 in September from a downwardly revised August reading of 67 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Readings above 50 indicate builders view sales conditions as good rather than poor. The index has been above 60 since September 2016.

According to the Census Bureau, the seasonally adjusted annual number of nationwide residential building permits increased 5.7 percent in August (1.30 million permits) from July and was 8.3 percent above August 2016.

The increase in permits from July to August was driven by a 22.8 percent increase in multi‐family units, while single‐family detached and attached units declined over‐the‐month. Multi‐family units (+10.2 percent) and single‐family detached units (+7.7 percent) were also up over‐the‐year, while single‐family attached units were unchanged from year‐ago levels.

The number of permits in the West region increased 15.3 percent over‐the‐month and 27 percent over‐the‐year to 362,000 permits.

The South (646,000 permits) also recorded an increase in permits over‐the‐year, rising 6.6 percent. However, the Midwest recorded a 3.6 percent decline in permits to 185,000 and the Northeast reported an 8.5 percent decrease to 107,000 permits.

Metro Denver

Residential building permits for the Metro Denver area increased 37.3 percent in August compared with the prior year.

The over‐the‐year increase in total units permitted was attributed to an 80.7 percent increase in multi‐family permits and a 7.3 percent increase in single‐family detached permits. The single‐family attached market recorded the only over‐the‐year decrease in permits, declining 21.4 percent.

All three property types recorded an increase in permitted units over‐the‐month, with total units rising 35.4 percent from July 2017 to August. Single‐family attached units increased from 2 permits to 22 permits. Multi‐family units recorded an increase of 63.3 percent over‐the‐month and single‐family detached units rose 10.2 percent.

Residential Building Permits

Month of Month of Month of YTD Total YTD Total YTD Total Total Total


Single‐Family Detached Units 996 904 928 7,519 7,126 5.5% 5,947 7,799 Single‐Family Attached Units 22 2 28 303 267 13.5% 299 398 Multi‐Family Units 1,225 750 678 9,775 6,235 56.8% 8,679 6,195 Total Units 2,243 1,656 1,634 17,597 13,628 29.1% 14,925 14,392

Source: U.S. Census Bureau.


Apartment Rental Market

According to the Denver Metro Apartment Vacancy and Rent report, 4,348 apartments were filled in the second quarter of 2017, outpacing the 2,152 new units added. Since January, there have been 9,012 net units filled, while 11,056 net units were absorbed in all of 2016.

The apartment vacancy rate throughout Metro Denver decreased in the second quarter of 2017, falling 0.7 percentage points to 5 percent from the first quarter of 2017. The average vacancy rate also decreased over‐the‐year by 0.4 percentage points. Vacancy rates ranged from 4.3 percent in Arapahoe County to 5.6 percent in the City and County of Denver. Vacancy rates declined over‐the‐year in four of the six submarkets, with the exceptions of the City and County of Denver that increased by 0.2 percentage points and Jefferson County that increased by 0.6 percentage points. Douglas County reported the largest over‐the‐year decrease of the submarkets, falling 3 percentage points.

The average monthly rental rate of apartments in Metro Denver increased across all six submarkets in the second quarter of 2017. The average rental rate in Metro Denver ($1,420) was 2.7 percent higher than the previous quarter’s level. The rate was also 3.6 percent higher than the second quarter of 2016, representing an increase of $49 in the average monthly rental rate over‐the‐year. The average rental rate ranged from $1,338 in Adams County to $1,605 in the Boulder/Broomfield submarket.

Apartment Statistics

Quarter 2 Quarter 1 Quarter 2

YTD Average

YTD Average

YTD Average

Annual Average

Annual Average

2017 2017 2016 2017 2016 % Change 2012 2007

Apartment Vacancy Rate 5.0% 5.7% 5.4% 5.4% 5.8% 4.7% 6.2%

Average Monthly Rental Rate (all units) $1,420 $1,383 $1,371 $1,401 $1,343 4.3% $974 $856

Source: Denver Metro Apartment Vacancy and Rent Survey.

Commercial Real Estate

Santa Monica‐based Mass Equities is planning more than 1 million square feet of mixed‐use development in Denver, acquiring 8 acres in Denver’s RiNo neighborhood for $38 million. Plans with the city of Denver propose 10 buildings with 550 residences and retail space.

Majestic Realty Co. broke ground on a 701,900‐square‐foot warehouse and distribution center in the Majestic Commercenter at Interstate 70 and Tower Road in Aurora. The project is the largest speculative warehouse ever constructed in Colorado and is slated for completion in early 2018. The company supplied Amazon with its first Colorado facility—a speculative‐built warehouse in the Commercenter.

Denver‐based Continuum Partners began construction on the $200 million, 370,000‐square‐foot Market Station mixed‐use development at 16th and Market streets. The project will include 95,000 square feet of office space, 85,000 square feet of retail, 225 apartments, and 320 parking spaces. The project will be completed in the summer of 2019.

Denver‐based Confluent Development and Centennial‐based Kelmore Development Corp. will build a 200,000‐square‐foot mixed‐use project in Denver’s Lowry neighborhood that will be anchored by Boulder‐based Lucky’s Market. The 25,000‐square‐foot store in The Boulevard at Lowry will be the company’s first store in the city of Denver and its third store in Colorado. The new development, which is slated for completion in early 2019, will also include retail, office, restaurant, and entertainment space.

The first commercial building being constructed at North Park in Broomfield will be completed soon. The 152,761‐square‐foot speculative flex building is part of the 1,100‐acre master‐planned community stretching from the Northwest Parkway to Highway 7 on the west side of Interstate 25. The McWhinney‐developed community is planned for as much as 17.2 million square feet of commercial space and 6,205 residential units.


The Denver Housing Authority’s Collaborative Resource Center broke ground at the 17‐acre Mariposa District in Denver. The 150,000‐square‐foot, 11‐story building will serve as the Housing Authority’s headquarters when it opens in 2019. The building will also include a ground‐floor market, shared working space, and leasable space for small businesses and nonprofits on the top floors.

P3 Advisors closed a $7.8 million purchase of a 65‐acre site at Interstate 25 and Plum Creek Parkway in Castle Rock. The company plans to develop a mixed‐use project called Miller’s Landing that will include office, hotel, and retail uses. Remediation of a former landfill on the site will begin in late 2017 with development scheduled to start in 2018.

Construction continued on S’PARK in Boulder with the groundbreaking of two of the project’s premier parcels, a project that features housing, office, and retail space. S’PARK’s initial phase over the past year included 45 affordable townhome units. The Market parcel will have a four‐story, 50,000‐square‐foot mixed use office building with ground‐floor retail, expected to be completed by August 2018. The Timber parcel will feature 150 market‐rate apartments with ground‐floor retail, anticipated for completion in May 2019.

A new open food market consisting of 14 restaurants and bars will open in the Dairy Block development at Wazee Street between 18th and 19th streets in the summer of 2018. The 15,000‐square‐foot concept will allow people to move freely between locations, will include a common space for people to gather, and will serve an array of food options.

The Butterfly Pavilion and the Center for Invertebrate Research and Conservation will move from Westminster to the North Park neighborhood in Broomfield and will construct a new $33 million, 60,000‐square‐foot facility. The facility, slated to open in 2021, will include 8 acres of exhibit space and research laboratories, the first‐of‐its‐kind pollinator‐friendly habitat, and expanded educational programs.

Denver Water is moving forward on a $380 million expansion project to enlarge Gross Reservoir in Boulder to help supply water to 1.4 million people in Metro Denver. The project is expected to begin in 2018 and by 2025 will add 131 feet to the dam’s height and 77,000 acre‐feet of water to its total storage capacity. The Reservoir currently holds 41,811 acre‐feet of water, which is enough to supply more than 167,000 Metro Denver households for a year.

Parker City Council approved plans for the Parker Tennis Center, a $5.8 million, 44,000‐square‐foot tennis facility slated to break ground in late November. In addition to courts, the facility will include a welcome center, offices, locker rooms, lounge, and retail shop.

Office Market

The Metro Denver office market reported increases in the vacancy rate and the average lease rate over‐the‐year through the third quarter of 2017. According to CoStar Realty data, the direct vacancy rate rose 0.6 percentage points over‐the‐year to 9.9 percent vacancy. The average lease rate rose 1.9 percent between the third quarters of 2016 and 2017, gaining $0.48 per square foot during the same period.

Office construction in Metro Denver was robust during the third quarter of 2017. There was 2.42 million square feet of space completed across 26 buildings as of the third quarter of 2017. Some of the largest office buildings completed in the third quarter included the 227,000‐square‐foot Arrow office building and the 212,000‐square‐foot INOVA Dry Creek 1 office building in Centennial. There was 5.49 million square feet of space under construction during the third quarter of 2017, a 13.4 percent increase in space under construction compared with the same time last year. Of this space, nearly 3.65 million square feet of space was under construction in the City and County of Denver, the largest amount of space of the seven counties and representing 66 percent of total Metro Denver construction.


Office Market Statistics

Quarter 3 Quarter 2 Quarter 3 Quarter 3 Quarter 3 Quarter 3

2017 2017 2016 2015 2014 2013

Number of Buildings 6,157 6,153 6,125 6,087 6,067 6,042

Existing Square Feet (millions) 184.1 183.9 181.3 179.3 177.9 176.8

Vacant Square Feet (direct, millions) 18.2 18.3 16.9 17.4 17.8 19.6

Vacancy Rate (direct) 9.9% 9.9% 9.3% 9.7% 10.0% 11.1%

Vacancy Rate (with sublet) 10.8% 10.9% 10.0% 10.3% 10.6% 11.5%

Avg. Lease Rate (direct, per sq. foot, full service) $25.79 $25.86 $25.31 $24.37 $23.46 $22.27 New Construction Completed (year‐to‐date) 2.42 MSF,

26 Bldgs 1.96 MSF, 21 Bldgs

0.98 MSF, 23 Bldgs

1.34 MSF, 18 Bldgs

1.16 MSF, 23 Bldgs

0.95 MSF, 15 Bldgs

Currently Under Construction 5.49 MSF, 51 Bldgs

4.69 MSF, 41 Bldgs

4.84 MSF, 36 Bdgs

2.83 MSF, 29 Bldgs

2.85 MSF, 25 Bldgs

1.79 MSF, 23 Bldgs

Source: CoStar Realty Information, Inc. MSF=Million Square Feet

Industrial & Flex Market

CoStar data revealed that the industrial market reported increases in the vacancy rate and the average lease rate through the third quarter of 2017. The third quarter direct vacancy rate was 0.8 percentage points higher than the third quarter of 2016. The average lease rate rose 2.6 percent between the third quarters of 2016 and 2017, adding $0.19 per square foot to the average lease rate.

There was 2.41 million square feet of space completed across 30 buildings year‐to‐date through the third quarter of 2017 and industrial construction continued at a strong pace. Major completed projects included the 250,000‐square‐foot McLane building in Commerce City. Adams County comprised 64 percent of the completed industrial space year‐to‐date in 2017, or 1.54 million square feet. There were 33 buildings with nearly 6.94 million square feet of space under construction during the period, including 2.4 million square feet for Amazon in Thornton.

Industrial Market Statistics


2017 2017 2016 2015 2014 2013






Avg. Lease Rate (direct, per square foot, NNN) $7.52 $7.58 $7.33 $6.85 $5.76 $4.93 New Construction Completed (year‐to‐date) 2.41 MSF,


2.71 MSF, 19 Bldgs

1.24 MSF, 4 Bldgs

2.13 MSF, 19 Bldgs

0.89 MSF, 4 Bldgs


3.26 MSF, 24 Bldgs

3.82 MSF, 34 Bldgs

1.57 MSF, 8 Bldgs

1.77 MSF, 8 Bldgs

0.63 MSF, 7 Bldgs


The Metro Denver flex market recorded falling vacancy rates and increasing average lease rates through the third quarter of the year. According to CoStar, the direct vacancy rate for flex space fell 0.9 percentage points to 6.1 percent between the third quarters of 2016 and 2017. The average lease rate rose 9.7 percent over‐the‐year to $12.04. There was 492,600 square feet of new space completed in 2017, including the 108,000‐square‐foot 6755 E. Yampa Street building in Denver and an 83,291‐square‐foot flex building in the Prairie Business Center in Louisville. Seven buildings offering 341,200 square feet of new flex space are under construction.


Flex Space Statistics


2017 2017 2016 2015 2014 2013







11 Bldgs 0.46 MSF,

9 Bldgs 0.13 MSF,

4 Bldgs 0.33 MSF,

3 Bldgs 0.37 MSF,

6 Bldgs 0.10 MSF,

3 Bldgs Currently Under Construction 0.34 MSF,

7 Bldgs 0.14 MSF,

4 Bldgs 0.36 MSF,

7 Bldgs 0 MSF, 0 Bldg

0.53 MSF, 6 Bldgs

0.07 MSF, 2 Bldgs


Retail Market

The Metro Denver retail market reported a stable vacancy rate and an increase in the average lease rate over‐the‐year through the third quarter of 2017, according to CoStar Realty data. The direct vacancy rate was 4.6 percent in the third quarters of 2016 and 2017, ranging between 4.4 percent and 4.6 percent for the past five quarters. The average lease rate for retail space rose 9.1 percent over‐the‐year, adding $1.50 per square foot during this same period.

Douglas County recorded the largest amount of retail space completed through the third quarter of 2017, reporting 387,800 square feet of retail space completed, and comprising more than 32 percent of completed space in Metro Denver. There were 59 buildings under construction during the third quarter of 2017, totaling 1.57 million square feet. Some of the largest projects under construction included the 351,300‐square‐foot Denver Premium Outlets in Thornton and the 235,000‐square‐foot general retail building at 9th and Colorado Blvd in Denver.

Retail Market Statistics


2017 2017 2016 2015 2014 2013








0.93 MSF, 63 Bldgs

0.54 MSF, 32 Bldgs

0.36 MSF, 43 Bldgs

0.98 MSF, 53 Bldgs


1.43 MSF, 73 Bldgs

1.64 MSF, 59 Bldgs

0.99 MSF, 47 Bldgs

0.19 MSF, 16 Bldgs

0.42 MSF, 28 Bldgs



Monthly Economic Indicators

Positive Changes

‐900 33,900 34,800

20% 20% 26%

2.1% ‐0.9 percentage points 2.5%

‐2.4% ‐7.7% ‐10.8%

‐1.1% 1.3% ‐2.8%

118.2 15.7% 126.9


3.3% 6.7% 7.3%

507.9 ‐2.2% ‐1.8%

22,405.1 22.4% 13.4%

5,893 ‐3.7% 40,129

$424,500 7.6% $410,300

277 2.2% 2,021

2,243 37.3% 17,597

Permits increased 35.4% from

July to August

Permits up from August 2016 to

2017

YTD permits up 29.1% through

August 2017

Foreclosures

Up 25.3% from July to August Up from August 2016 to 2017 Down 7.9% YTD through August 2017

Residential Building Permits (Total)

Home Sales (closed)

Sales up 3.9% from July to August Sales down from August 2016 to 2017 YTD sales up 0.4% through August 2017

Median Home Price

(Denver‐Aurora MSA)Up 7.2% from 1Q 2017 to 2Q 2017 Price up from 2Q 2016 to 2Q 2017 YTD price 7.5% higher through 2Q 2017

Bloomberg Colorado Index

Index up 1.3% from August to September Index down from September 2016 to 2017 YTD return down through September 2017

Dow Jones Industrial Average

Index up 2.1% from August to September Index up from September 2016 to 2017 YTD return up through September 2017

Hotel OccupancyDecreased 0.1 percentage points from July

to August

Occupancy decreased from August 2016

to 2017YTD occupancy unchanged from last year

DIA Passengers

Passengers up from June to July Passengers up from July 2016 to 2017YTD passengers increased through July

2017

Total Retail Sales

Metro sales decreased from Jan. to Feb. Metro sales up from Feb. 2015 to 2016 YTD sales down through Feb. 2016

Mountain Region Consumer Confidence IndexIndex down 2.3% from August to

SeptemberIndex up from September 2016 to 2017

YTD average up 26.4% through September

2017

Unemployment RateUnemployment fell 0.3 percentage points

between July and August

Unemployment rate down from August

2016 to 2017Down from 2016 YTD average of 3.3%

Initial Unemployment Insurance Claims

Claims decreased from July to AugustClaims decreased from August 2016 to

2017

YTD average claims decreased through

August 2017

Nonfarm Employment GrowthEmployment down 0.1% from July to

August

Employment up 2.1% from August 2016 to

2017YTD employment up 2.2% through August

% Companies Hiring

(Denver Area) Companies expecting to add workers fell

10 percentage points from 3Q 2017 to 4Q

2017

Companies expecting to add workers fell

8 percentage points from 4Q 2016 to 4Q

2017

YTD average up 1 percentage point

compared with 2016

Monthly/Quarterly Direction Year‐Over‐Year Direction Year‐to‐Date Direction

10 of 18 10 of 18 12 of 18



Vacancy decreased 0.7

percentage points from 1Q

2017 to 2Q 2017

Vacancy decreased from 2Q

2016 to 2Q 2017

YTD average down 0.4

percentage points from last

year

10.8% +0.8 percentage points +0.8 percentage points

Vacancy rate down 0.1

percentage points from 2Q

2017 to 3Q 2017

Vacancy rate up from 10% one

year ago

Vacancy rate up from 10% one

year ago


Vacancy rate up 0.2 percentage

points from 2Q 2017 to 3Q

2017

3Q 2017 vacancy up from 3.8%

one year ago

3Q 2017 vacancy up from 3.8%

one year ago


Vacancy rate unchanged from

2Q 2017 to 3Q 2017

3Q 2017 vacancy rate up from

4.9% one year ago

3Q 2017 vacancy rate up from

4.9% one year ago

Office Vacancy Rate (with Sublet)

Industrial Vacancy Rate (with Sublet)

Retail Space Vacancy Rate (with Sublet)

Apartment Vacancy Rate

Economic and Demographic Research Industry Studies Fiscal and Economic Impact Analysis Real Estate Economics 10184 West Belleview Avenue Suite 100 Littleton, Colorado 80127 www.DevelopmentResearch.net 303.991.0070

Documents

Monthly Economic Indicatorsthe designation, Denver will receive $350,000 in grants targeted at education efforts beyond the high‐school level. According to a new report from Version