Prior to the economic downturn resulting from the spread of coronavirus, Denver’s commercial real estate market enjoyed strong growth. However, covid-19 changed everything.
The latest quarterly market reports put out by CBRE, a real estate services firm, demonstrated the city’s strong numbers. “We were certainly in a peak cycle. Our Q1 stats, by and large, were very positive,” said Pete Schippits, the firm’s Colorado market leader in an interview.
He drew attention to the report’s figures across the board. It featured low vacancy levels, or at least stability in vacancies for commercial real estate. It also showed strong investment activity.
Furthermore, a record amount of new space went into construction by the end of last month. Over 7 million square feet for warehouse and industrial space in the city made for a 20 year high. Additionally, 3.7 million square feet for office space was under construction by the end of March.
Earlier this year, Denver marked the largest transaction of office space in the past ten years. The Denver City Center sold sporting a price tag of $400 million.
However, Schippits believes second quarter numbers will lay out the fallout amidst the pandemic.
Commercial Real Estate Hit Hard by Pandemic
A stroll down formerly busy commercial hot spots across Denver reveal the devastation wrought by the outbreak. Stores, restaurants, and bars once played host to scores funneling through their businesses. Now, they sit quietly, awaiting the return of normalcy.
As a result, many struggle to make payments, pay staff, and stay afloat. Come the end of 2020’s second quarter in June, Schippits believes the numbers will expose that impact.
However, he remains hopeful for a robust recovery. He highlighted efforts from local governments all the way up to the federal level helping businesses stay on their feet. Stimulus packages, including the massive CARES Act, provide relief.
And, among industries that enjoyed high peaks prior to the outbreak, he sees a quicker recovery in their future. For example, the industrial real estate market might bounce back stronger.
The hopeful perspective on Denver’s future awaits the conclusion of covid-19’s grip on our economy.