National Economic Overview. Economic Indexes & Notable Data Releases. National & International. Local

Transcription

1 January2015

2 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 (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 sections: labor force and employment, the consumer sector, residential real estate, and commercial real estate. Notable Rankings According to the Small Business and Entrepreneurship Council, Colorado is the ninth best state for small business and entrepreneur-friendly policies and costs. The annual index ranks all 50 states based on 42 policy measures including tax, regulatory, and government spending measurements. The study made note that five of the top six states had no income tax. South Dakota was ranked first followed by Nevada (second), Texas (third), Wyoming (fourth), and Florida (fifth). Intuit Inc. released their monthly Small Business Index and Colorado was ranked fifth in the nation for small business employment gains in December. According to the index, small-business employment in Colorado rose 0.2 percent between November and December. The index considered data from 251,000 businesses nationwide with fewer than 20 employees. States at the top of the index included Nevada, Oregon, Virginia, and Washington. A report released by Rent.com looked at the 10 most expensive cities to lease an apartment, and Denver ranked sixth. The list considered three criteria: rental vacancy rate, median rental rates, and median household income. Denver reported a 4.7 percent vacancy rate, a $1,499 median rental rate for a one-bedroom apartment, and median household income of $49,091. Cities rounding out the top five most expensive markets starting with the most expensive were San Francisco, Calif., Ventura, Calif., New York, N.Y., San Jose, Calif., and Los Angeles, Calif. Victory Media released the 2015 STEM Jobs Approved Colleges list placing Metropolitan State University of Denver among the top colleges. The list of 123 colleges and universities nationwide included criteria such as total enrollment, students in STEM majors, average size of STEM class, STEM job placement after graduation, and STEM graduate and program diversity. According to the National Association of Realtors, Denver is among the top ten metropolitan areas to see an increase in baby boomers purchasing homes. The report considered 100 metropolitan areas that had lower state taxes, stable job market conditions, and strong migration patterns of baby boomers. The report said that Denver is in a tax-friendly state, the share of self-employed baby boomers is high, and has strong employment growth. Albuquerque, N.M., Boise, Idaho, Orlando, Fla., and Tucson, Ariz. were also among the top ten. Colorado ranked third among states with the most energy-efficient buildings, according to the New Buildings Institute s Getting to Zero Database. The state is home to 17 of the buildings in the database that are either net-zero or exceptionally energy efficient. The database assigns buildings a net energy-use intensity score, which measures both whole-building energy usage and on-site renewable generation. The top ranked state for the most energy-efficient buildings was California. On a list of the nation s top 100 places to raise a family, Castle Rock ranked fourth and Loveland ranked 90th. Apartment List considered four criteria for the list consisting of safety and crime rates, housing costs, school quality, and child friendliness. Castle Rock was reported as being very safe, with access to great jobs and not far from the Denver city center. According to a report by Thrillist, Denver s RiNo district is the nation s 18th best neighborhood for food spots. The ranking considered each area s culinary history and the area s current environment. Growth in the RiNo district was attributed to The Source, a 20,000-square-foot artisan food market, which houses many of Denver s best restaurants. Metro Denver Economic Development Corporation January 6, 2015 Page 1

3 NerdWallet ranked the Denver-Aurora-Broomfield MSA as the fifth-healthiest place in the nation. The Denver-Aurora- Broomfield MSA had the third-highest percentage of residents who are a healthy weight, the third-highest percentage of residents who engage in physical activity, and the fourth-highest fitness index. The Boston-Cambridge-Quincy metro area ranked first, and the Memphis metro area was the lowest-ranked metro area. Livability, an online think tank, released a ranking of the nation s top cities for beer, and Denver ranked second. The ranking considered many criteria including the number of award-winning breweries, cities where people drank more craft and high-end beers than average, and the number of liquor stores per capita. The company stated that Denver offers innovative and award-winning breweries, residents who consume beer at above average rates, and a high quality of life. Bend, Ore. was ranked as the best city for beer. Policy Watch Local Colorado is expected to create 61,300 jobs in 2015, which ranks it among the top 10 states for employment growth. The economic outlook by The University of Colorado Boulder s Leeds School of Business reports that all sectors of the state s economy, with the exception of the information sector, are expected to grow through The forecast also expects unemployment to remain below 5 percent, reaching an annual level of 4.6 percent. According to the Office of State Planning and Budgeting (OSPB) and the Legislative Council, Colorado s tax revenue is expected to reach higher levels in 2015 than previously expected. The OSPB expects that the fiscal year will collect $53.6 million more in general fund revenues than predicted in September. However, the state government will need to put aside as much as $120 million of the rising revenue to pay refunds to taxpayers as mandated by the Taxpayer s Bill of Rights. The positive revenue forecasts suggest Colorado s economy will continue a strong rebound from the Great Recession. The minimum wage increased in Colorado effective January 1. Coloradans who earn minimum wage will see an increase in their hourly rate by 23 cents to $8.23 per hour for employees who do not earn tips and $5.21 per hour for workers who earn tips. Since the passage of a 2006 constitutional amendment that adjust minimum wage annually to the consumer price index, tip earning employees have had a 36 percent increase in pay and non-tip earning employees have had a 20.2 percent increase in pay. A draft plan outlining how Colorado can combat future water shortages was released by the state s Water Conservation Board. The plan is designed to address a future water shortage of 500,000 acre feet due to increased demand from a growing population, while continuing to support agriculture. The most populous region in the state is the South Platte River Basin and the water plan recommends reducing water consumption by 42 gallons per capita per day by The Bureau of Reclamation gave approval to build a new reservoir in northern Colorado, called Chimney Hallow Reservoir. The Northern Colorado Water Conservancy District project includes building a reservoir that would store as much as 90,000 acre feet of water, equivalent to over 29 billion gallons of water. The $223 million project would supply 26,000 acre feet of water annually to cities and towns including Boulder, Broomfield, and Longmont. The Denver Transit-Oriented Development Fund, a program for affordable housing, will expand from the City and County of Denver to all seven counties in the region, allowing the seven counties access to the funds. The $24 million fund is designed to finance property acquisitions and pre-development loans for developers who are creating and preserving affordable homes along transit corridors. The program focuses on areas within a half-mile of light and commuter rail and a quarter-mile of high-frequency bus routes. The goal is to build 2,000 affordable homes and other community services by Metro Denver Economic Development Corporation January 6, 2015 Page 2

4 National Economic Overview The U.S. Bureau of Economic Analysis (BEA) released the third estimate of real gross domestic product (GDP) for the third quarter of The estimate showed that GDP increased at an annual rate of 5 percent through the third quarter, up from the second estimate of 3.9 percent. The third estimate represents more complete source data than the available data for the second estimate. The acceleration in GDP growth during the third quarter is attributed to a decline in imports, increase in federal government spending, and faster growth in personal consumption expenditures. The advanced estimate of fourth quarter 2014 GDP will be released January 30. The December conference of the Federal Open Market Committee (FOMC) reported that economic activity continued to improve. The release stated that labor underutilization continued to fall, household spending rose, and business fixed investment advanced. The Committee reported that inflation remained below their longer run objective, reflecting decreasing energy prices. Inflation is expected to increase slowly to 2 percent as the labor market improves further. The Committee plans to maintain the current 0 to 0.25 percent target range for the federal funds rate until the duel mandate of maximum employment and 2 percent inflation is met. The next committee meeting will be held on January 27. Economic Indexes & Notable Data Releases National & International The U.S. trade deficit fell to $43.4 billion in October, down from the September deficit of $43.6 billion (revised). Imports increased to $241 billion, rising $2.1 billion between September and October, and exports rose $2.3 billion to $197.5 billion. The goods and services deficit increased 5.1 percent (+ $20.5 billion) year-to-date compared with the same period the year before. Exports increased 3.1 percent and imports increased 3.4 percent during the same period. Capital goods exports increased $1.7 billion, while services exports increased $0.3 billion. Imports of automotive vehicles, parts, and engines increased $1.3 billion, while services imports increased $0.2 billion. The Conference Board Leading Economic Index for the U.S. increased through November to 105.5, rising 0.6 percent between October and November. Economists at the Conference Board reported that each of the index components continued to improve through November. Further, slow income growth is the biggest challenge to stronger growth in the index, but wage growth is starting to pick up with a tightening labor market. Employment and industrial production made the largest contributions to the current situation index in November. The Institute for Supply Management s Purchasing Managers Index fell 0.3 percentage points to 58.7 percent in November, compared with the October level of 59 percent. The November index level marked the 18th consecutive month of expansion, as measured by a value greater than 50. Of the 18 manufacturing industries tracked in the index, 14 industries reported growth. The Export Index increased 3.5 percentage points over-the-month to 55 percent, while the Backlog of Orders index and the Customers Inventories index both recorded a 2 percent increase during the same period. The Price index reported the largest over-the-month decline, falling 9 percentage points to 44.5 percent. Survey respondents stated that holiday orders remain strong and demand continues to grow. The Institute for Supply Management s Non-Manufacturing Index increased 2.2 percentage points in November to 59.3 percent, compared with the October level of 57.1 percent. The November index marked the 58th consecutive month of growth, as measured by a value over 50. The index tracks 18 non-manufacturing industries and 14 industries reported an increase between October and November. Eight of the non-manufacturing composite indices reported over-themonth increases, with the Inventories Index (+6 percent) recording the largest increase. The Supplier Deliveries and Inventory Sentiment Indices also reported significant growth over-the-month, rising 5 percent and 4.5 percent, respectively. Local The Leeds Business Confidence Index reported a positive outlook for the first quarter of The index value of 60.8 for the first quarter of 2015 was 1.3 points above the previous quarter. Overall expectations for the state economy rose from 63.9 in the fourth quarter to 66.2 in the first quarter. According to the report, the index is on more stable footing Metro Denver Economic Development Corporation January 6, 2015 Page 3

5 than at any time in the 11-year history of the index. Further, the Colorado economy reported the greatest optimism, the national economy reported the largest increase in optimism, and hiring expectations declined to the least bullish component of the index. During the 2014 fiscal year, Colorado lenders approved a record amount of Small Business Administration (SBA) loans. Colorado lenders approved 1,271 7(a) program loans valued at $531.3 million and program loans totaling $123 million. Minority-owned small businesses received 267 loans worth $146 million, women-owned businesses received 222 loans worth $80.4 million, and veteran-owned businesses received 79 loans worth $29.4 million. According to the Environment Colorado Research and Policy Center, the United States produces 24 times more electricity from wind power than it did in Further, Colorado is one of nine states that generates more than 12 percent of total electricity production from wind power. Colorado wind power projects produced enough energy to power 679,188 homes in Environment Colorado used data from the National Renewable Energy Laboratory to produce a report on solar energy in Colorado called Star Power: The Growing Role of Solar Energy in Colorado. The report stated that half a million rooftops in Colorado could support solar power and if they were all fitted with solar panels, they could generate more than 360 times Colorado s current power demand. According to the analysis, Colorado s solar power systems generated 360 megawatts of power at the end of 2013, a 44 percent increase from According to a Colorado Center for Nursing Excellence (CCNE) report, Colorado will lose nearly 6,300 nurses to retirement by One-third of the state s nurses are over the age of 55 and more than one in 10 are past the traditional retirement age of 65. Colorado has about 61,000 nurses licensed at all levels and studies estimate that the state will need 3,000 new nurses a year to make up for the departing workforce and an increased patient load. CCNE spokespersons stated that nursing colleges throughout the state have a government-established admissions cap, limiting colleges to 1,600 graduated nurses per year. The Driving a Vibrant Economy: Housing s Role in Colorado s Economic Success report found that Colorado and Metro Denver need greater housing variety. The report was commissioned by several housing and community development organizations to address the need for more housing in varied price ranges. Authors of the study said that with population growth increasing in Denver, the amount of homebuilding in the area in not enough to provide places for new residents to live. The study found a housing affordability gap for low-income earners when looking at rental properties. Further, the housing affordability gap for households making $20,000 or less per year in Colorado was 103,133 homes. Three of Colorado s mountain towns contain 39 casinos, which generated $1.5 billion of economic activity in Oxford Economics released a report on state gambling s economic impact and reported that Colorado s non-tribal casinos supported more than 10,000 workers and generated $342 million in state and local tax revenue. The report also said that tourists left an additional $51.5 million in Black Hawk, Central City, and Cripple Creek, bringing total direct spending in casinos and gambling towns to $852.6 million in Labor Force and Employment Employment in Metro Denver increased 2.7 percent between November 2013 and 2014, or an additional 40,000 jobs during the period. The employment growth consisted of a 2.7 percent increase in the Denver-Aurora MSA, or an additional 36,100 jobs, and a 2.2 percent increase in the Boulder MSA, representing 3,900 jobs. The manufacturing supersector reported the largest percentage increase over-the-year in employment, rising 5.5 percent and adding 4,500 jobs. The education and health services supersector also reported a significant increase in employment, rising 4.4 percent over-the-year, and added the most jobs during the period (8,200 jobs). The government supersector added 7,100 jobs and increased employment by 3.1 percent during the same period. The information supersector (-1.9 percent) was the only supersector to report employment declines over-the-year. Colorado employment rose 2.1 percent in November compared with the previous year s level, adding 50,900 new jobs over the same period. National employment levels increased 2 percent over-the-year, with the addition of 2.8 million jobs. Metro Denver Economic Development Corporation January 6, 2015 Page 4

6 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 Nov-14(p) Oct-14 Nov % Change Total 11-County Metro Denver* 1, , , , , % -4.3% 0.8% Denver-Aurora MSA 1, , , , , % -4.3% 0.8% Boulder-Longmont MSA % -4.7% 0.9% Natural Resources & Construction % -16.3% -0.7% Manufacturing % -10.2% -0.4% Wholesale & Retail Trade % -5.7% -0.1% Transp., Warehousing & Utilities % -6.2% 0.5% Information % -4.5% -5.4% Financial Activities % -4.4% -0.1% Professional & Business Services % -6.2% 3.5% Education & Health Services % 3.0% 3.2% Leisure & Hospitality % -3.4% 2.6% Other Services % -1.8% 1.7% Government % 1.5% -0.2% Federal Gov't % 0.6% -1.6% State Gov't % 4.0% 0.4% Local Gov't % 0.8% 0.0% Colorado 2, , , , , % -4.5% 1.2% United States 141, , , , , % -4.3% 1.1% *Includes the Denver-Aurora-Broomfield MSA (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties) and the Boulder-Longmont MSA (Boulder County). Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary Metro Denver Industry Cluster Headlines Aviation Lockheed Martin Space Systems received $17 million in business personal property tax rebates from Jefferson County. The company will receive the rebates over 15 years in exchange for creating 850 high-wage jobs at their Waterton Canyon facility. Lockheed Martin will spend $263 million on the facility expansion, generating an estimated $4.5 billion in economic and fiscal impact. Aviation Southwest Airlines announced plans to expand its Denver operations. The expansion will include 12 additional daily flights to its existing domestic routes and create 50 new positions. Cleantech Panasonic Enterprise Solutions Co. has announced plans to create a hub for its business solutions operations and technology center adjacent to Denver International Airport. The new facility will be the first addition to the 400-acre, transit oriented development called Pena Boulevard Station. The company will employ 300 people, with an average wage of $89,554. The facility will produce large-scale audio-visual displays and solar panels. Metro Denver Economic Development Corporation January 6, 2015 Page 5

7 Financial Services WorldRemit, a London-based financial services company, will open its North American headquarters and operations center in Denver. The company leased an 11,126-square-foot space at th Street starting in January. The company expects to have 218 employees within five years. Healthcare and Wellness The new National Jewish Health-Saint Joseph Hospital opened in December. The 831,000-square-foot facility cost $623 million, has 21 operating rooms, and a bed capacity of 400 patients. Through a joint operating agreement, National Jewish will share operational resources with SCL Health. Catholic Health Initiatives announced the company will cut 1,500 jobs by the end of January. The company did not specify which positions will be eliminated but they will be concentrated in administrative and support staff. The reduction in labor force is due to a decline in the use of services and the company is unsure how many of the employment cuts will be local. IT-Software Datalogix, an advertising technology company, was purchased by Oracle, a hardware and software company. The merger will make Oracle one of Colorado s largest and fastest-growing tech companies. Oracle announced it plans to use Datalogix as part of its cloud services for business. SendGrid, a Boulder-based startup, received $20 million in Series C funding that will carry the company into The company plans to hire an additional 100 employees over the next 12 months. The delivery service provider is responsible for managing 2 percent of the world s non-spam messages. Employment Outlook The Manpower Employment Outlook Survey expects first quarter hiring in the Denver-Aurora-Broomfield MSA to slow slightly compared with the previous quarter. The percentage of companies hiring decreased 1 percentage point between the fourth and first quarter, with 20 percent of companies expanding their employment levels. The percentage of companies planning to decrease employment levels declined 2 percentage points from the fourth quarter. The majority of companies intend to maintain staff levels through the first quarter of the year, with the level rising 2 percentage points over-the-quarter to 72 percent. The survey reported that sectors with the best job outlooks were construction, transportation, and wholesale and retail trade, while manufacturing planned to reduce staffing levels. Employment Outlook Survey Quarter 1 Quarter 4 Quarter 1 YTD YTD Ann Avg Denver-Aurora-Broomfield MSA Percent of Companies Hiring 20% 21% 18% 20% 18% 13% Percent of Companies Laying Off 6% 8% 3% 6% 3% 10% Percent of Companies No Change 72% 70% 78% 72% 78% 73% Percent of Companies Unsure 2% 1% 1% 2% 1% 5% United States Percent of Companies Hiring 19% 19% 17% 19% 17% 15% Percent of Companies Laying Off 6% 7% 7% 6% 7% 10% Percent of Companies No Change 73% 72% 73% 73% 73% 72% Percent of Companies Unsure 2% 2% 3% 2% 3% 3% Source: Manpower Inc. Hiring expectations in the U.S. were unchanged through the first quarter of 2015 compared with the prior quarter. The percentage of employers planning to increase employment levels remained at 19 percent for the first quarter. Companies Metro Denver Economic Development Corporation January 6, 2015 Page 6

8 planning to decrease employment levels decreased 1 percentage point from the prior quarter and was 1 percentage point lower than the previous year. The percentage of companies planning to maintain staffing levels (73 percent) was unchanged from the prior year but up by 1 percentage point compared with the last quarter. The survey analysts stated as overall demand improves, they expect to see consistent, gradual strengthening in U.S. hiring expectations. Unemployment The unemployment rate throughout the Metro Denver area continued to fall through November. In November, the Metro Denver unemployment rate fell to 3.8 percent, a 2 percentage point decline from the November 2013 level but a 0.2 percentage point increase from October Adams County reported the largest decline in unemployment over-the-year, falling 2.2 percentage points to 4.4 percent, but continued to report the highest unemployment rate of the seven Metro Denver counties. Boulder County continues to maintain the lowest unemployment rate of the seven county region at 3.2 percent, but is closely followed by Douglas County, which fell 1.6 percentage points over-the-year to 3.3 percent. Colorado s unemployment rate fell 2.1 percentage points over-the-year to 4 percent during the month of November. The national unemployment rate in November was unchanged from the prior month but was 1.1 percentage points below the previous year. Labor Force Statistics (000s, not seasonally adjusted civilian labor force) November YTD Avg 2013 YTD Avg Labor Unemployment Labor Unemploy- Labor Unemploy- Ann Avg Unemploy- Ann Avg Unemploy- Force Rate Force ment Rate Force ment Rate ment Rate ment Rate Metro Denver 1, % 1, % 1, % 8.2% 5.8% Adams County % % % 9.4% 6.5% Arapahoe County % % % 8.1% 5.7% Boulder County % % % 6.8% 4.9% Broomfield County % % % 7.7% 5.8% Denver County % % % 9.0% 6.6% Douglas County % % % 6.9% 4.7% Jefferson County % % % 7.9% 5.4% Colorado 2, % 2, % 2, % 8.1% 5.6% United States 156, % 155, % 155, % 9.3% 5.5% Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary November unemployment insurance claims increased in Metro Denver, rising 54 percent between October and November. The November level was also 2.4 percent higher than the year-ago level. Claims throughout Colorado also increased overthe-month, rising nearly 40 percent, but were 2.6 percent below the previous year s level. Weekly First-Time Unemployment Insurance Claims Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Nov-14 Oct-14 Nov % Change 2009 Metro Denver 1,896 1,231 1,851 1,391 1, % 2,541 Colorado 3,469 2,497 3,562 2,599 3, % 4,752 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. Metro Denver Economic Development Corporation January 6, 2015 Page 7

9 Consumer Sector Sentiment & Spending The Consumer Confidence Index for the U.S. improved significantly in December, reporting a level of 92.6 from the revised November level of 91, an increase of 1.8 percent over-the-month. The national index for December 2014 was 19.4 percent above the December 2013 level. Analysts at The Conference Board stated the Present Situation Index rose 5.2 percent to 98.6, while the Expectations Index dropped 0.1 percent to 88.5 in December. They also reported that the Present Situation index reached the highest level since February 2008 and that consumers are more confident at the end of the year than they were at the beginning of the year. Colorado is included in the Mountain Region Index and the area reported slight declines in consumer confidence. The index fell to 97.3 in December from the November revised level of 101.2, declining 3.9 percent over-the-month but rose 15.9 percent over-the-year. For the Mountain Region Index, the Present Situation Index fell to 98.9 in December from in November, while the Expectations Index fell to 96.2 from 97.1 in November. Consumer Confidence Index Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg Dec-14 (p) Nov-14 Dec % Change Mountain % United States % Source: The Conference Board. (p) = preliminary National retail sales increased through November compared with the previous year s level, with overall retail sales rising 4.9 percent during the period. Sales were also 0.7 percent higher than the October level. Motor vehicle sales rose 1.7 percent between October and November and were 8 percent higher between November 2013 and The building materials sector reported a 1.4 percent increase over-the-month and 7.9 percent increase over-the-year. Gasoline sales continued to decline through November 2014 compared with the previous year, falling 1.4 percent, marking the lowest consumption level since July Core retail sales, which excludes motor vehicle, building material, and gasoline sales, reported a 0.6 percent increase between October and November. Total Retail Sales ($000s) Month of Month of Month of YTD Total YTD Total YTD Total Annual Growth Annual Growth May-14 Apr-14 May % Change Total Metro Denver 8,537,363 8,039,236 8,405,140 40,783,912 39,438, % -11.6% 7.4% Adams County 1,940,488 1,736,123 1,832,460 8,914,329 8,358, % -17.4% 11.7% Arapahoe County 1,655,467 1,561,049 1,658,808 7,926,262 7,871, % -8.2% 2.6% Boulder County 735, , ,848 3,635,560 3,536, % -9.1% 2.1% Broomfield County 187, , , , , % -8.3% 49.4% Denver County 2,060,878 2,001,273 2,027,648 10,035,040 9,717, % -13.5% 8.1% Douglas County 673, , ,111 3,162,167 3,141, % -5.7% 16.9% Jefferson County 1,283,288 1,245,122 1,264,406 6,233,375 6,001, % -10.5% 3.8% Colorado 13,937,560 13,184,834 13,455,660 67,704,786 64,192, % -12.2% 7.8% Source: Colorado Department of Revenue. Metro Denver retail sales continued to improve through May. Metro Denver retail sales increased 1.6 percent over-theyear, with total retail sales reaching over $8.5 billion in May. Five of the seven Metro Denver counties reported over-theyear growth and all seven counties posted over-the-month increases. Douglas County reported the largest decline in retail sales between May 2013 and 2014, falling 7.2 percent to $674 million. Arapahoe County retail sales also fell 0.2 percent over-the-year. The largest increase in retail sales over-the-year was in the City and County of Broomfield, where sales rose 9.9 percent to $188 million. Adams County reported the greatest over-the-month increase in sales, rising 11.8 percent, Metro Denver Economic Development Corporation January 6, 2015 Page 8

10 while the City and County of Denver reported the smallest growth, increasing 3 percent. Retail sales in Colorado were 3.6 percent higher in May 2014 than May According to the U.S. Bureau of Labor Statistics, the U.S. Consumer Price Index (CPI) decreased 0.5 percent between October and November but recorded a 1.3 percent increase over-the-year. The core CPI which excludes food and energy costs increased 1.7 percent over-the-year but fell 0.1 percent over-the-month. The increase in the overall CPI between November 2013 and 2014 was attributed to a 3.1 percent increase in the food and beverage index, a 2.6 percent increase in the housing index and a 2.5 percent increase in the medical care index. The over-the-month decrease in the overall CPI was mainly attributed to a 2.7 percent decrease in the transportation index and a 2.2 percent decline in the apparel index. According to the AAA Daily Fuel Gauge Report, the national average fuel price for December decreased 18.7 percent from November to $2.26 per gallon. The December average fuel price was 32 percent lower than the prior year s level ($3.32 per gallon). Metro Denver reported a 23 percent decrease in the average fuel price between November and December. The average fuel price of $2.14 per gallon for December in Metro Denver was $0.12 lower than the national average. The area reported average fuel prices 31.4 percent lower in December 2014 than the previous year s level. Stock Market The nation s stock market indices fell slightly December, with three of the four stock market indices reporting declines between November and December. The NASDAQ reported the largest decline over-the-month, falling 1.4 percent to 4, The Bloomberg Colorado index and the S&P 500 also reported declines between November and December, falling 0.6 percent and 0.5 percent, respectively. The DJIA recorded no change over-the-month. However, the three national indices recorded positive returns for the year, while the Bloomberg Colorado index fell slightly during 2014 due to the retreat in the stock prices of oil and gas companies based in Colorado. Stock Market Indexes Month of Month of Month of YTD Return YTD Return Ann Avg Return Ann Avg Return Dec-14 Nov-14 Dec Bloomberg Colorado % 30.6% 46.2% 17.7% S&P 500 2, , , % 29.6% 23.5% 9.0% NASDAQ 4, , , % 38.3% 43.9% 8.6% DJIA (Dow Jones) 17, , , % 26.5% 18.8% 3.1% Travel & Tourism Sources: Bloomberg.com; Yahoo! Finance. The average hotel occupancy rate in Metro Denver fell 16.7 percentage points to 65 percent occupancy in November compared with the October level. However, the November level was 2 percentage points higher than the previous year. The average room rate for November was $ per night, 11.7 percent lower than the October level, but 6 percent higher over-the-year. Metro Denver Hotel Statistics Month of Month of Month of YTD Avg YTD Avg YTD Avg Annual Annual Nov-14 Oct-14 Nov % Change Percent of Hotel Rooms Occupied 65.0% 81.7% 63.0% 77.4% 72.3% 7.1% 59.0% 61.9% Average Hotel Room Rate $ $ $ $ $ % $ $84.42 Source: Rocky Mountain Lodging Report. Spokespeople for Denver International Airport (DIA) reported that nearly 4.03 million passengers passed through the airport in November, decreasing 12.7 percent from the 4.6 million passengers in October. The November 2014 level was 0.1 percent lower than the November 2013 level, recording 3,662 fewer passengers through the airport. Metro Denver Economic Development Corporation January 6, 2015 Page 9

11 Number of Airline Passengers Denver International Airport Passengers Month of Month of Month of YTD Total YTD Total YTD Total Annual Annual Nov-14 Oct-14 Nov % Change ,029,659 4,616,603 4,033,321 49,075,222 48,040, % 50,167,485 42,275,913 Source: Denver International Airport, Traffic Statistics. Residential Real Estate PM Realty Group began construction on a 34-story, 288-unit luxury apartment building in the Central Platte Valley area of Denver. The Confluence building sits on a 1.21-acre parcel at 15th and Little Raven Streets. The $10 million building will include ground floor retail and residential space ranging from studios to three-bedroom apartments. Apartments will rent between $1,500 and $12,000 per month. Amenities will include a Jacuzzi, fire pit, outdoor cabanas, gourmet kitchens, and hardwood floors. The first available apartments are expected early The Hotel VQ, located next to Sports Authority Field at Mile High, will be redeveloped by Nichols Partnership into Turntable Studios, a new micro-apartment complex. The building will include 168 studio apartments that are 330 square feet, four one-bedroom apartments at 685 square feet, and seven two-bedroom apartments at 820 square feet. The average rental rate will be $1,000 or less per month. Each unit will have a full bathroom, kitchen, and balcony. Amenities include 150 parking spaces, swimming pool, exercise facility, and community areas. LTC Properties Inc. developed a 64-unit memory care facility called Chelsea Place in Aurora. The $9.6 million development was leased by Anthem Memory Care. The facility offers four different floor plans, a full-service clinician s office, beauty salon, daily activities, and dining program. The Backyard on Blake mixed-use redevelopment in Denver s RiNo district will include 14 townhomes. The townhome units will stand three-stories tall, ranging from 1,200 square feet to 1,500 square feet. Housing amenities will include rooftop decks and two-car garages. The finished units are expected in early Zillow released a report stating that housing rent in Metro Denver is about 32.9 percent of total monthly income. This level is 51.6 percent higher than the historic norms of the pre-bubble years between 1985 and Individuals looking to purchase a home can expect to spend 19.7 percent of their total monthly income on housing, which is 8.9 percent less than historic norms. In another report released by Trulia, Denver was said to have the fastest rental growth in the country, up 14.2 percent between November 2013 and Home Resales The National Association of Realtors (NAR) released the November analysis of U.S. existing-home sales, reporting that sales fell 6.1 percent between October and November to 4.93 million homes sold annually. November home sales decreased at the slowest annual pace since May 2014 but were 2.1 percent above the November 2013 level. The housing inventory fell through November with a 6.7 percent decrease over-the-month, representing a 5.1-month supply, but was 2 percent higher over-the-year. NAR economists said that rising home values might be causing investors to leave the market and homebuilding activity continues to lag, restricting the overall housing supply. Further, next year will see much faster price and rent appreciation if new construction does not pick up considerably. Existing home sales in Metro Denver declined between October and November, falling 25 percent to 3,586 total homes sold during the month of November. The November home sales were nearly 2 percent lower compared with the previous year. Unsold homes on the market were 19.7 percent lower in November 2014 than October and 42 percent lower than the previous year s inventory level. The average sales price for single-family homes rose 1.2 percent between October and November to $364,770 and was 9.6 percent higher than the previous year s price. The average sales price of condominiums ($240,672) increased 2.8 percent over-the-month and was 18.2 percent higher over-the-year. Metro Denver Economic Development Corporation January 6, 2015 Page 10

12 Previously-Owned Home Sales Activity Month of Month of Month of YTD Total YTD Total YTD Total Ann Total Ann Total Nov-14 Oct-14 Nov % Change Home Sales (Closed) 3,586 4,779 3,657 49,583 49, % 42,070 53,482 Unsold Homes on Market 5,420 6,748 9,352 5,420 9, % 16,456 20,301 Average Sales Price-Single Family $364,770 $360,486 $332,752 $362,242 $335, % $264,803 $289,971 Average Sales Price-Condo $240,672 $234,019 $203,639 $223,907 $197, % $159,628 $181,054 Median Sales Price-Single Family $313,000 $305,000 $271,200 $219,000 $236,240 Median Sales Price-Condo $192,500 $185,000 $164,950 $135,000 $157,000 Note: Data consists of the 11 counties in the Denver-Aurora and Boulder MSAs. Source: Denver Metro Association of Realtors. Home Prices NAR data shows the November median existing-home sales price across the U.S. was $205,300, an over-the-year increase of 5 percent. Median housing prices increased over-the-year across the nation s four regions through November. The Midwest reported the largest increase between November 2013 and 2014, rising 7 percent to a median home price of $160,500. The West reported the highest median home price ($292,700), which was 3.5 percent above the previous year s level. The South ($176,500) and the Northeast ($246,100) also reported significant increases in the median home price, rising 5.2 percent and 1.3 percent, respectively. Median Sales Price of Existing Single-Family Homes ($000s) Quarter 3 Quarter 2 Quarter 3 YTD Avg YTD Avg YTD Avg Median Median 2014 (p) 2014 (r) % Change Boulder MSA $439.9 $448.8 $410.9 $435.8 $ % $345.5 $325.3 Denver-Aurora MSA $315.5 $316.3 $286.9 $306.7 $ % $219.9 $239.1 United States $217.3 $212.0 $207.1 $206.8 $ % $172.1 $195.2 Source: National Association of REALTORS. (p) =preliminary (r) =revised A separate NAR report revealed that growth in median home prices throughout the Metro Denver area slowed during the third quarter of the year. The Boulder MSA reported a 2 percent decrease ($439,900) in home prices between the second quarter of 2014 and the third quarter of However, Boulder home prices were 7.1 percent higher than the third quarter of The Denver-Aurora MSA reported a slight decline in home prices, reporting a 0.3 percent decrease in prices over-the-quarter to $315,500. Between the third quarter of 2013 and 2014, the Denver-Aurora MSA recorded a 10 percent increase in the median sales price. The national median sales price rose 2.5 percent over-the-quarter to $217,300 and was nearly 5 percent higher than the previous year s level. Of the 175 MSAs included in the third quarter 2014 report, the Boulder MSA reported the eighth highest median price and the Denver-Aurora MSA median price was 19th highest. According to the S&P/Case-Shiller home price index, Denver housing prices continued to rise through October compared with September. The Denver index rose 0.6 percent to 157.4, an absolute increase of 0.9 points, recording the third largest over-the-month increase of the 20 cities. Of the 20 cities tracked by the index, eight reported over-the-month increases and 12 recorded declines. However, all 20 cities continued to record over-the-year increases for the sixth consecutive month. Denver s home prices in October 2014 were 7.3 percent higher than the prior year s level. Miami (+9.5 percent) continued to record the largest over-the-year increase, while Cleveland (+0.2 percent) reported the smallest increase. The national home price index rose Metro Denver Economic Development Corporation January 6, 2015 Page 11

13 4.6 percent between October 2013 and Analysts with the company stated that housing prices will be strong through the end of the year and could accelerate into Foreclosures Housing foreclosures throughout the Metro Denver area declined in four of the seven counties between November 2013 and However, Metro Denver recorded an 1.1 percent increase in foreclosures in November compared with the previous year, but the total was 18.1 percent lower than the previous month. Adams (+9.1 percent), Arapahoe (+83.3 percent) and Jefferson (+40 percent) Counties reported increases in foreclosures over-the-year. Boulder County reported the largest decline in foreclosures, falling 50 percent between November 2013 and Douglas County also reported significant declines in foreclosures through November, falling 40.4 percent to 34 total foreclosures. Real Estate Foreclosures Month of Month of Month of YTD Total YTD Total YTD Total Annual Total Annual Total Nov-14 Oct-14 Nov % Change Total Metro Denver* ,899 7, % 26,509 12,311 Adams County ,099 1, % 5,646 2,499 Arapahoe County ,217 1, % 6,233 3,125 Boulder County % 1, Broomfield County % Denver County ,000 1, % 6,141 3,351 Douglas County % 2, Jefferson County , % 4,027 1,880 *The total number of election and demand setups (initial filings) received by county public trustees. Filings may be subsequently cured or withdrawn. Sources: Colorado Division of Housing and county public trustees. RealtyTrac released the November foreclosure report, stating the U.S. foreclosure rate decreased 9 percent between October and November. The total filings for November (112,498) were 1 percent below the November 2013 level. According to the report, there were over 50,102 properties scheduled for foreclosure auction in November, 16 percent lower than the October level, but 5 percent above the previous year s level. Vice president of RealtyTrac Daren Blomquist stated that the housing market is struggling to find a new long-term level of tolerable foreclosure activity. He also stated that the struggle stems from finding a balance between too much loan risk, which could result in further housing market collapse, and too little loan risk, which could stunt further recovery. New Homes The Census Bureau report on new home sales after adjustment for seasonal trends stated that national home sales decreased in November to 438,000 annual sales from the revised October level of 445,000 annual sales. The November home sales level was 1.6 percent lower than October and was 1.6 percent below the previous year s level. Only one of the four national regions reported increases between October and November. With 124,000 total sales, the West reported an over-the-month increase of 14.8 percent. The Northeast reported the largest decline, falling 12 percent over-the-month to 22,000 total sales. The Midwest and the South recorded declines during the same period, falling 6.3 percent and 6.4 percent, respectively. The West and the Midwest reported increases in home sales between November 2013 and 2014, rising 10.7 percent and 3.5 percent, respectively. The Northeast reported Metro Denver Economic Development Corporation January 6, 2015 Page 12

14 the largest over-the-year decrease in sales, falling 33.3 percent. The South recorded a 4.1 percent decrease over-the-year to 233,000 sales, the highest number of sales across all four regions. The National Association of Homebuilders (NAHB)/Wells Fargo Housing Market Index fell 1 point to 57 in December from the November level of 58. NAHB spokespersons reported confidence stabilized to the mid-50s index level over the last six months, which is consistent with their assessment of confidence moving back to normal. They also reported that heading into 2015, they expect builders to remain confident and that the housing market should continue to recover at a steady pace. The report stated that the decline in the index was attributed to a 1 point decline in current sales conditions, a 1 point decline in expectations for future sales, and prospective buyers traffic was unchanged. According to the Census Bureau, the seasonally adjusted annual number of nationwide residential building permits decreased in November (1.05 million permits), falling 3.7 percent from October, but was 1.4 percent higher than November The over-the-month decrease in permits is attributed to a 12.5 percent decline in single-family attached units (28,000 permits) between October and November. However, the single-family attached permits were 3.7 percent above the previous year s level. Single-family detached permits nationwide fell 1.4 percent between October and November and were 1.1 percent lower than November Multi-family units were 6.5 percent below the previous month s level and 5.8 percent above the previous year s level. The Northeast reported an increase in permits over-the-month, rising 25.3 percent to 119,000 permits. The South reported the largest decline in permits over-the-month, falling 8.9 percent to 500,000 permits. The Midwest (-8.5 percent) and the West (-0.4 percent) reported decreases in permits over-the-month. The West and the Northeast were the only regions to report an increase in permits over-the-year, rising 12.3 percent and 6.3 percent, respectively. Residential building permits for the Metro Denver area slowed through November compared with the prior year. Metro Denver reported a 40.5 percent decrease in total permits issued between November 2013 and 2014, with 517 fewer permits issued. Single-family detached permits rose 10.1 percent over-the-year, while single-family attached permits fell nearly 93 percent with 26 fewer permits. Much of total permit decline was attributed to a significant decrease in multifamily permits, falling 66.8 percent and reporting 536 fewer permits in November 2014 compared with November Compared with October 2014, permits though November in Metro Denver fell 61.5 percent with 1,211 fewer permits. The single-family attached market type reported a 94.4 percent decrease in permits over-the-month, while the single-family detached market type recorded a 29.6 percent decrease. Residential Building Permits Month of Month of Month of YTD Total YTD Total YTD Total Total Total Nov-14 Oct-14 Nov % Change Single-Family Detached Units ,667 6, % 2,690 19,069 Single-Family Attached Units % Multi-Family Units 266 1, ,482 7, % 1,465 3,108 Total Units 758 1,969 1,275 15,471 14, % 4,288 22,551 Note: The source for this series changed with August 2014 data from The Homebuilder Association of Metro Denver to the U.S. Census Bureau; data cannot be compared with prior reports. Source: U.S. Census Bureau. Apartment Rental Market The Denver Metro Apartment Vacancy and Rent Survey for the third quarter of 2014 reported the third consecutive quarter of decreasing vacancy rates. The Metro Denver apartment vacancy rate fell 0.8 percentage points to 3.9 percent from the second quarter level, the lowest vacancy rate since the third quarter of Declines in five of the six submarkets contributed to the over-the-quarter decline. The City and County of Denver reported the largest decline in vacancy between the second quarter and the third quarter, falling 2.1 percentage points to 3.5 percent vacancy. The Boulder/Broomfield submarket also reported a significant decline in the vacancy rate, decreasing 1.1 percentage points to 3.3 percent. Adams County (3.9 percent), Douglas County (3.7 percent), and Jefferson County (3.2 percent) reported vacancy rate declines overthe-quarter of less than one percent. Arapahoe County (4.6 percent) reported no change in the vacancy rate during the same period. Metro Denver Economic Development Corporation January 6, 2015 Page 13

15 Apartment Statistics Quarter 3 Quarter 2 Quarter 3 YTD Average YTD Average YTD Average Annual Average Annual Average % Change Apartment Vacancy Rate 3.9% 4.7% 4.4% 4.6% 4.4% 8.1% 9.7% Average Monthly Rental Rate (all units) $1,145 $1,117 $1,049 $1,112 $1, % $877 $817 Source: Denver Metro Apartment Vacancy and Rent Survey. As vacancy rates declined during the third quarter, the average rental rate of apartments in Metro Denver continued to set new record highs. The third quarter average rental rate in Metro Denver ($1,145) was 2.5 percent higher than the previous quarter s level. This rate was also 9.2 percent higher than the third quarter of 2013, marking the 18th consecutive quarter of over-the-year gains. All six submarkets continued to report average rental rates above $1,000 during the third quarter, with average rental rates ranging from $1,067 in Adams County to $1,372 in Douglas County. Jefferson County (+11.5 percent), Douglas County (+11 percent), and Adams County (+10.8 percent) reported the largest increases in rental rates between the third quarters of 2013 and Commercial Real Estate The Boulder Planning Board gave initial approval to Google to build a four-acre campus in the city. The plan includes three four-story buildings at 30th and Pearl Streets. The buildings would create space for 1,500 employees and the company currently has 340 employees spread out around Boulder. The final construction would include a 600-space underground parking garage and 300 spaces for bicycles spread across the campus. Despite prior funding issues, construction on the Veterans Affairs (VA) Hospital in Aurora continues after budget issues were resolved. The VA s 2015 fiscal year budget ended with a balance of $1.985 billion and the VA received an additional $562 million to complete construction on the hospital. The remainder of hospital construction will be overseen by the U.S. Army Corps of Engineers. The Colorado air and space museum, Wings Over the Rockies, broke ground on an education and technology center at the Centennial Airport in Arapahoe County. The first phase of the $21 million project includes a museum addition at the airport called the Exploration of Flight Center. The museum raised $9 million towards the plan and the completed plan will include a Blue Sky Aviation Gallery hanger, aircraft ramp, public access road, and a service taxi lane to the site. Office Market The Metro Denver office market recorded declines in the vacancy rate and growth in the average lease rate through the fourth quarter of According to CoStar, the direct vacancy rate fell 0.5 percentage points to 10 percent vacancy. The 2014 direct vacancy rate was the lowest fourth quarter vacancy rate since the fourth quarter of 2001 when the vacancy rate was 9.8 percent. The average lease rate rose 3.7 percent during the fourth quarter compared with the previous year s level. The average lease rate gained $0.81 per square foot between the fourth quarters of 2013 and Office property construction continued through the fourth quarter and projects completed to date were significantly higher than prior years. There was 2.85 million square feet of space under construction during the fourth quarter of 2014, a 59.2 percent increase from the prior year. There was 1.16 million square feet of space completed as of December 2014, which was the highest level since the fourth quarter of The largest office projects completed in 2014 were the first two buildings of the Charles Schwab campus in Lone Tree, each spanning 187,500 square feet. Other notable completed construction in Denver for 2014 include a 147,400-square-foot mixed use building on Market Street between 15th and 16th streets, which has residential, office, and restaurant space; 123,000 square feet of coworking space at 3001 Brighten Boulevard called Industry ; and 112,600 square feet at One Union Station. Metro Denver Economic Development Corporation January 6, 2015 Page 14

16 Office Market Statistics Quarter 4 Quarter 3 Quarter 4 Quarter 4 Quarter 4 Quarter Number of Buildings 5,962 5,958 5,938 5,922 5,909 5,891 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 10.0% 10.5% 11.2% 12.1% 12.5% 12.9% Vacancy Rate (with sublet) 10.6% 11.0% 11.6% 12.4% 12.9% 13.6% Avg. Lease Rate (direct, per sq. foot, full service) $22.87 $22.74 $22.06 $20.89 $19.91 $19.92 New Construction Completed (year-to-date) 1.16 MSF, 0.98 MSF, 0.95 MSF, 0.87 MSF, 0.49 MSF, 1.14 MSF, Currently Under Construction Industrial & Flex Market 23 Bldgs 2.85 MSF, 25 Bldgs 18 Bldgs 1.81 MSF, 19 Bldgs 15 Bldgs 1.79 MSF, 23 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 8 Bldgs 0.90 MSF, 10 Bldgs 14 Bldgs 0.85 MSF, 7 Bldgs 13 Bldgs 0.45 MSF, 8 Bldgs CoStar Realty data recorded growth in the industrial market during the fourth quarter of The fourth quarter direct vacancy rate was 0.9 percentage points lower than the fourth quarter of The average lease rate rose 20.3 percent between the fourth quarters of 2014 and 2013, adding $1.03 per square foot to the average lease rate. There was also a 5.7 percent increase over-the-quarter in the average lease rate. There was 2.6 million square feet of industrial space completed in 2014, the highest level since the fourth quarter of There were 23 completed buildings through the fourth quarter, with six of them over 250,000 square feet. There was also 1.35 million square feet of space under construction during the period. Some of the notable buildings completed in 2014 included two Enterprise Business Center buildings, the third building of the Mile High Business Center, and the ViaWest Denver Data Center Compark. Industrial Market Statistics Quarter 4 Quarter 3 Quarter 4 Quarter 4 Quarter 4 Quarter Number of Buildings 6,937 6,933 6,914 6,904 6,893 6,883 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 3.0% 3.4% 3.9% 5.1% 6.6% 5.9% Vacancy Rate (with sublet) 3.3% 3.6% 4.2% 5.6% 6.9% 6.5% Avg. Lease Rate (direct, per square foot, NNN) $6.10 $5.77 $5.07 $4.70 $4.57 $4.67 New Construction Completed (year-to-date) 2.60 MSF, 2.13 MSF, 0.93 MSF, 0.58 MSF, 0.32 MSF, 0.07 MSF, Currently Under Construction 23 Bldgs 1.35 MSF, 6 Bldgs 19 Bldgs 1.77 MSF, 8 Bldgs 5 Bldgs 2.01 MSF, 15 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 8 Bldgs 1.05 MSF, 7 Bldgs 5 Bldgs 0.05 MSF, 2 Bldgs 3 Bldgs 0.08 MSF, 1 Bldg The Metro Denver flex market reported slight improvements through the fourth quarter of the year. The direct vacancy rate for flex space fell 0.1 percentage points to 8.8 percent between the third and fourth quarters of 2014, the lowest fourth quarter rate since the data has been collected. The average lease rate rose 1.7 percent over-the-quarter to $9.81 per square foot. The fourth quarter lease rate was also 4.6 percent higher than the prior year s level and added $0.43 per square foot. The flex market reported 571,000 square feet of new space was completed through the end of the year and 320,000 square feet of space remains under construction. Metro Denver Economic Development Corporation January 6, 2015 Page 15

17 Flex Space Statistics Quarter 4 Quarter 3 Quarter 4 Quarter 4 Quarter 4 Quarter Number of Buildings 1,468 1,466 1,459 1,454 1,451 1,451 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 8.8% 8.9% 10.6% 12.6% 13.3% 14.0% Vacancy Rate (with sublet) 10.0% 10.3% 12.0% 14.1% 14.5% 15.3% Avg. Lease Rate (direct, per square foot, NNN) $9.81 $9.65 $9.38 $8.77 $8.78 $9.07 New Construction Completed (year-to-date) 0.57 MSF, 0.37 MSF, 0.10 MSF, 0.13 MSF, 0 MSF, 0.05 MSF, Currently Under Construction Retail Market 9 Bldgs 0.32 MSF, 3 Bldgs 6 Bldgs 0.53 MSF, 6 Bldgs 3 Bldgs 0.23 MSF, 5 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 3 Bldgs 0.08 MSF, 3 Bldgs 0 Bldgs 0 MSF, 1 Bldg 2 Bldgs 0 MSF, 0 Bldgs The retail market in Metro Denver reported mixed trends through the fourth quarter of The direct vacancy rate decreased 0.1 percentage points between the third and fourth quarter of 2014, and was 0.4 percentage points below the third quarter 2013 level. The fourth quarter direct vacancy rate was the lowest level since the beginning of the data series in the first quarter of The average lease rate for retail space decreased over-the-quarter, falling 0.4 percent, but was 0.5 percent higher over-the-year, adding $0.07 per square foot. Most of the retail spaces completed have been relatively small projects. Of the 51 buildings completed in 2014, 39 of them are smaller than 10,000 square feet, with an overall average size of 11,600 square feet. Adams and Arapahoe Counties recorded the largest amount of retail space completed during 2014, both reporting over 182,000 square feet of completed space. Boulder County reported the third highest completed retail space at nearly 73,000 square feet. The City and County of Denver, the City and County of Broomfield, Douglas, and Jefferson Counties reported less than 56,000 square feet of competed space each in Retail Market Statistics Quarter 4 Quarter 3 Quarter 4 Quarter 4 Quarter 4 Quarter Number of Buildings 11,513 11,505 11,461 11,378 11,323 11,285 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 5.6% 5.7% 6.0% 6.5% 6.9% 7.5% Vacancy Rate (with sublet) 5.7% 5.8% 6.3% 6.7% 7.2% 7.7% Avg. Lease Rate (direct, per square foot, NNN) $15.47 $15.53 $15.40 $14.79 $14.61 $14.89 New Construction Completed (year-to-date) 0.59 MSF, 0.36 MSF, 1.15 MSF, 0.59 MSF, 1.02 MSF, 0.41 MSF, Currently Under Construction 51 Bldgs 0.87 MSF, 37 Bldgs 43 Bldgs 0.19 MSF, 16 Bldgs 69 Bldgs 0.42 MSF, 29 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 46 Bldgs 0.85 MSF, 7 Bldgs 25 Bldgs 0.20 MSF, 14 Bldgs 22 Bldgs 0.57 MSF, 6 Bldgs Metro Denver Economic Development Corporation January 6, 2015 Page 16

18 Monthly/Quarterly Direction Annual Direction Positive Changes 7 of of 18 Nonfarm Employment +3, ,700 Growth Employment up 0.2% from Oct. to Nov. YTD employment up 2.8% through Nov. 20% 20% % Companies Hiring Companies expecting to add workers YTD average up 2 percentage points (Denver Area) decreased from 4Q 2014 to 1Q 2015 compared with % 5.0% Unemployment Rate Unemployment increased 0.2 percentage points Oct. to Nov. Down from 2013 YTD average of 6.5% 54.0% -12.5% Initial Unemployment YTD average claims decreased through Nov. Insurance Claims Claims increased from Oct. to Nov Total Retail Sales 6.2% 3.4% Metro sales increased from Apr. to May YTD sales up through May 2014 Mountain Region Consumer Confidence Index Index down 3.9% from Nov. to Dec. YTD average up 19.4% through Dec % 77.4% Hotel Occupancy Decreased 16.7 percentage points from Oct. to Nov. YTD occupancy up 5.1 percentage points from last year -12.7% 2.2% DIA Passengers YTD passengers increased through Nov. Passengers decreased from Oct. to Nov Bloomberg Colorado Index % Index down 0.6% from Nov. to Dec. YTD return through Dec Dow Jones Industrial 17, % Average Index unchanged from Nov. to Dec. YTD return through Dec Home Sales (closed) 3,586 49,583 Sales down 25% from Oct. to Nov. YTD sales down 0.6% through Nov Median Home Price $315,500 $306,700 (Denver-Aurora MSA) Down 0.3% from 2Q 2014 to 3Q 2014 YTD price 10.3% higher through 3Q 2014 Foreclosures 354 4,899 Down 18.1% from Oct. to Nov. Down 30.4% YTD through Nov Residential Building Permits ,471 (Total) Permits decreased 61.5% from Oct. to Nov. YTD permits up 5.9% through Nov % 4.6% Apartment Vacancy Rate Vacancy decreased 0.8 percentage points from 2Q 2014 to 3Q 2014 YTD average up 0.2 percentage points through 3Q % -1 percentage points Office Vacancy Rate (with Vacancy rate down 0.4 percentage points 4Q 2014 vacancy rate down from 11.6% one Sublet) from 3Q 2014 to 4Q 2014 year ago 3.3% -0.9 percentage points Industrial Vacancy Rate Vacancy rate down 0.3 percentage points 4Q 2014 vacancy rate down from 4.2% one (with Sublet) from 3Q 2014 to 4Q 2014 year ago Retail Space Vacancy Rate (with Sublet) 5.7% -0.6 percentage points Vacancy rate down 0.1 percentage point from 3Q 2014 to 4Q Q 2014 vacancy rate down from 6.3% one year ago Metro Denver Economic Development Corporation January 6, 2015 Page 17

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