Commercial Real Estate in Denver
The real estate market of Denver is riding, what looks like, a never-ending wave of highs. Yes, this isn’t something that will witness any drop any time soon.
And while it sounds too good to be true, fret not. Denver commercial real estate has become a seller’s market over the last few years, with minimal inventory, and this trend is here to stay! Two of the most prominent reasons for this incredible rise in demand are the number of people moving to Denver, and the job opportunities being made available to them, of course, in addition to the work from home that people can now enjoy from the comfort of their own homes in Colorado.
Reasons Behind Rising Investment in Denver Area Commercial Real Estate
The rise in demand is in both property types – commercial real estate as well as residential real estate. Let us examine the reasons behind this unprecedented growth in the demand for office space, commercial space, and industrial space in Colorado, and why investing in more properties is high on the priority list of brokers and clients alike.
Did you know? After hitting a record population of 3,000,000 people in 2014, the Denver area population was expected to grow by almost 50,000 people a year. The onset of the pandemic has further catapulted this already high number with numerous people moving back to Denver from other cities which were proving to be more expensive, especially in the newfound era of office freedom.
All of this combined is giving way to a rise in demand for residential and commercial real estate, with the supply remaining relatively lower for the foreseeable future.
Millennials make up almost 30% of Denver’s population, and approximately 36% of these currently stay with their parents. It should come as no surprise that over the next few years these aging millennials will move out of their parent’s homes and start finding a property type based on their needs and budget.
Given the steady rise in population, it is only obvious that the job market of the city will expand. Add to it the fact that more and more tenants are looking for long-term occupancy of office spaces and that companies are finally coming back to the office, the demand for these spaces will steadily grow over the next year or so. A major reason behind the same can also be attributed to the enhanced spending capacity of renters and buyers since the stay-at-home model helped boost savings over the past two years.
Timely Rent Payments
There existed a time when timely rent collection was cumbersome. Today, a vast majority of renters in downtown Denver and other areas willingly pay their rent on time and are even using payment plans to ensure timely payments of rent, making the market even more favorable for Denver commercial real estate owners.
Right from Ruby Hill to Tower Road, from South Cherry Street to Federal Blvd, the square feet rate is increasing, but investors have good reason to believe that they will be able to lease their properties at favorable rates and make the most of this surging demand.
Commercial real estate investors can be considered the highest risk-takers considering the significant investment they make towards each property type. That said, if an investor is in a sound financial state, and has a high-risk tolerance with an investing timeline of 5 years or more, then they ought to make the most of every available space in Denver. After all, their investment will pay in heaps and bounds over the coming years.
Well, at least that’s what the current business and job demographic of the city suggests!