MonthlyEconomicIndicators. July2017. Monthlyanalysis of18keyeconomic indicatorsin MetroDenver. EnergeticBodies.EnergeticMinds.

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1 MonthlyEconomicIndicators July2017 EnergeticBodies.EnergeticMinds. Monthlyanalysis of18keyeconomic indicatorsin MetroDenver

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 (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 sections: labor force and employment, the consumer sector, residential real estate, and commercial real estate. Notable Rankings According to the 2017 Kauffman Index of Startup Activity, Colorado was No. 5 among the largest 25 states. The Kauffman Index examines four separate indicators, consisting of beginnings of entrepreneurship, rate of new entrepreneurs, opportunity share of new entrepreneurs, and startup density. The rate of new entrepreneurs was 0.35 percent, meaning that 350 people out of every 100,000 adults became entrepreneurs each month. The opportunity share of new entrepreneurs was 87.2 percent, meaning that slightly more than eight out of every 10 entrepreneurs in the state had other jobs or were in school before they opened their business, and less than two out of every 10 started their business while they were unemployed. Metro Denver ranked No. 10 out of 40 metropolitan areas, had a rate of entrepreneurs at 0.39 percent, and an opportunity share of new entrepreneurs at 82.9 percent. Startup activity across the nation has increased three years in a row and is reaching the peak that was recorded before the Great Recession. The latest Fortune 500 list included 10 Metro Denver companies among the nation s largest public and private corporations. Arrow Electronics was the highest ranked Colorado company at #118 with $23.8 billion in revenue. The remaining nine companies in Metro Denver were DaVita HealthCare Partners Inc. (181), Dish Network (186), Liberty Interactive (269), Ball Corp. (306), Newmont Mining Corp. (328), Level 3 Communications Inc. (336), Western Union (478), Liberty Media (491), and CH2M (494). Colorado ranked No. 6 on WalletHub s annual Best State Economies list, No. 4 for startup activity, and is in a fourway tie for No. 1 for lowest unemployment rate. The survey of all 50 states and the District of Columbia also found Colorado No. 3 for overall economic health, No. 5 for innovation potential, No. 5 for highest GDP growth, No. 5 for highest nonfarm payroll, and No. 15 for economic activity. The Top 10 states on the 2017 WalletHub list are: 1 Washington 2 California 3 Utah 4 Massachusetts 5 District of Columbia 6 Colorado 7 Oregon 8 New Hampshire 9 Maryland 10 Delaware Colorado ranked fourth after Nevada, Utah, and Florida, according to the Economic Innovation Group s Index of State Dynamism. The index measured the ability of an economy and its population to adopt to changing conditions and looked at factors such as the share of adults participating in the workforce, rates of job switching, cross-state migration, new business formations, and the share of workers employed at new versus old companies. Colorado had the highest rate of job turnover, ranked high in the share of workers employed in new companies (16 years or newer), and remained high for in-migration of workers. Colorado leads the nation with the highest percentage of home-based workers in the country. According to the U.S. Census Bureau s American Community Survey, an estimated 173,871 people in Colorado, or 6.7 percent of the Metro Denver Economic Development Corporation July 5, 2017 Page 1

3 workforce, are home-based workers. Vermont also recorded that 6.7 percent of their workforce are home-based workers. Across the country, home-based workers have increased nearly 43 percent, from 4.8 million to 6.8 million between 2005 and Western states, including Arizona, California, New Mexico, and Utah, tend to have the highest percentage of home-based workers. According to real estate services firm Cushman & Wakefield, Denver ranks eighth nationally when it comes to talent, capital, and growth opportunities for technology. In the Tech Cities 1.0 report, San Jose-Silicon Valley is ranked No. 1, followed by San Francisco, Washington, D.C., and Boston. A spokesperson for Cushman and Wakefield stated that while Denver is not the headquarters for many big technology companies, it has continued to see larger, more established firms opening offices in Denver, including Google, Apple, and Amazon. Genetic Engineering and Biotechnology News (GEN) released their annual ranking for the nation s top 10 biopharmaceutical clusters. While Denver did not make the top 10 list, it sits just behind at No. 11 and is expected to grow in the coming years. GEN ranks the regions based on five criteria, consisting of NIH funding, venture capital funding, patents, lab space, and jobs. Denver ranked No. 9 in lab space (4 million square feet), and No. 10 in jobs (27,666). According to Abodo, an online apartment search site, Denver-area millennials are buying homes at a pace above the U.S. average. Abodo found that 34.2 percent of Denver-area millennials, defined as those between 18 and 35 years old, own their own homes, a large drop from the 43.8 percent of adults in the same age group who owned a home in Nationally, percent of millennials own their own homes, with the highest rate being in Ogden, Utah at 51 percent. Denver ranks No. 63 in terms of cities with the most millennial homeowners out of 135 cities Abodo studied, and among the 45 largest metros, Denver ranked 15th. Colorado leads the nation when it comes to having the lowest percentage of homeowners who are past due on their mortgage payments. Colorado recorded that 2.12 percent of homeowners are behind in their mortgage payment, with Mississippi (10.16 percent) recording the largest percentage of homeowners behind on their payments. Nationally, the percentage of homeowners behind on their mortgage payments is 3.79 percent, according to mortgage data firm Black Knight Financial Services. The percentage remains low in Colorado despite Denver homeowners spending 25% of their income on their mortgage payments, well above the national average of 14.6 percent. A new report by the National Multifamily Housing Council and the National Apartment Association found that Denver is the ninth hardest metro area to build in with an index score of 6.5. The index combines measures of zoning regulation and availability of buildable land, which makes it challenging for developers to expand housing. Honolulu ranked first with an Index Score of 19.5, followed by Boston (13.1), Baltimore (11.9), and Miami (9.3). The study also looked at which metro areas will have the highest demand for new apartments in buildings with at least five units from 2017 to Denver did not make it in the top 10 list. RewardExpert, an online travel service company, reported that Denver is the 10th most bike-friendly city for tourists. The report ranked the U.S. s 53 largest cities based on 13 metrics, such as bike infrastructure, city profile, bike-sharing availability, and biking safety. This followed a report by WalkScore.com, who ranked Denver as the 4th most bikefriendly in the U.S., which was calculated by measuring bike infrastructure, hills, destinations and road connectivity, and the number of bike commuters. National Economic Overview The U.S. Bureau of Economic Analysis (BEA) released the third estimate of real gross domestic product (GDP) for the first quarter of The third estimate is based on more complete source data than were available for the second estimate issued last month. The estimate showed that GDP increased at a slower rate in the first quarter, recording an annual rate of 1.4 percent, which was 0.7 percentage points below the fourth quarter of 2016 of 2.1 percent. The deceleration in real GDP in the first quarter reflected a downturn in private inventory investment, a deceleration of personal consumption expenditures, and a downturn in state and local government spending that was partly offset by an upturn in exports, an Metro Denver Economic Development Corporation July 5, 2017 Page 2

4 acceleration in nonresidential fixed investment, and a deceleration in imports. The advance estimate of real GDP for the second quarter of 2017 will be released July 28, The June meeting of the Federal Open Market Committee (FOMC) reported that the labor market continued to strengthen and that economic activity has been rising modestly so far this year. Job gains have moderated but have been solid and the unemployment rate declined. Household spending has picked up in recent months and business fixed investment has continued to expand. On a 12-month basis, inflation has declined and, like the measure excluding food and energy prices, is running somewhat below 2 percent. With this current economic outlook, the FOMC decided to raise the target range of the federal funds rate at 1 percent to 1.25 percent. The committee also set out a detailed plan to start slowly shrinking its $4.5 trillion portfolio of bonds and other assets in The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation. The next FOMC meeting will be held July Economic Indexes & Notable Data Releases National & International The U.S. trade deficit was $47.6 billion in April, up $2.3 billion from the March deficit of $45.3 billion (revised). Imports decreased to $238.6 billion, rising $1.9 billion between March and April. April exports were $191 billion, a decrease of $0.5 billion from March. For goods, the deficit was $68.4 billion in April, up from $66.1 billion in March. For services, the surplus was $20.8 billion in April, a decrease of less than $0.1 billion. The Conference Board Leading Economic Index (LEI) for the U.S. increased in May to 127 (2010=100), following a 0.2 percent increase in April, and a 0.4 percent increase in March. According to the Conference Board analysts, the continued upward trend of the U.S. LEI suggests the economy is likely to remain on, or perhaps even moderately above, its long-term trend of about 2 percent growth for the remainder of the year. The Institute for Supply Management s Manufacturing Index increased 0.1 percentage points in May to 54.9 percent, compared with the April level of 54.8 percent. Among the 18 manufacturing industries tracked in the index, 15 reported growth between April and May, while one industry recorded no change over-the-period. The Customers Inventories Index recorded the largest over-the-month increase, rising 4 percent, followed by the New Orders Index (+2 percent) and the Employment Index (+1.5 percent). Six of the indexes recorded contractions in May, with the Prices Index recording the largest contraction, falling 8 percentage points. The overall economy grew for the 96th consecutive month. The Institute for Supply Management s Non-Manufacturing Index grew in May for the 89th consecutive month. The Index registered 56.9 percent for the month of May, falling 0.6 percentage points from April. This represents continued growth in the non-manufacturing sector but at a slower rate. Of the 18 non-manufacturing industries, 17 reported growth in May, with Educational Services reporting the only contraction between April and May. The Employment Index recorded the largest increase over-the-month, rising 6.4 percentage points, while the New Export Orders Index recorded the largest decline over-the-month, falling 11 percentage points. The American Society of Civil Engineers (ASCE) released their 2017 Infrastructure Report Card for the U.S. The comprehensive assessment of America s infrastructure is done every four years and provides information on the nation s 16 major infrastructure categories using an A to F school report card format. America s cumulative infrastructure GPA in 2017 was a D+, which indicates that the infrastructure is in fair to poor condition and mostly below standard, with many elements approaching the end of their service life. The 2017 grades ranged from a B in Rail to a D- in Transit. Three categories (Parks, Solid Waste, and Transit) received a decline in grade in 2017, while seven (Hazardous Waste, Inland Waterways, Levees, Ports, Rails, Schools, and Wastewater) saw slight improvements. The remaining six categories (Aviation, Bridges, Dams, Drinking Water, Energy, and Roads) remained unchanged from The report also estimated that the cost of infrastructure needs till 2025 totaled $4.6 trillion, with an estimated total funding gap of $2.1 trillion. The ASCE estimated that the failure to close the funding gap will cause $3.9 trillion in losses to U.S. GDP by 2025, $7 trillion in lost business sales by 2025, and 2.5 million lost American jobs in Metro Denver Economic Development Corporation July 5, 2017 Page 3

5 Local The University of Colorado Boulder Leeds School of Business released their third quarter Leeds Business Confidence Index (LBCI) for The overall expectations for both the national economy and state economy slowed for the third quarter of 2017, but the outlook remains positive. The index value of 59.7 for the third quarter of 2017 was down 3.7 points from last quarter but up 5.1 points from the third quarter of Of the index components, national expectations decreased from 63.9 to 54.6, and state expectations fell from 67 in the second quarter to 60.9 in the third. Both sales and profits expectations were the highest among the six components but still recorded decreasing trends. Sales expectations fell by 1.9 points in the third quarter of 2017, while the profits expectations declined 1.6 points. LBCI panelists responded that the top problem facing the Colorado economy is labor issues. With historically low unemployment rates, employers are finding it difficult to hire new employees to fill vacant or new positions. The U.S. Federal Reserve System released its latest Beige Book report, and reported that the 10th district, which includes Colorado, had positive economic activity that continued to increase moderately in April and early May. Most sectors expect continued growth in the next few months. Professional, high-tech, and transportation firms reported a strong increase in sales, and manufacturing activity expanded at a moderate pace. District real estate activity rose modestly compared to the previous survey period, and bankers reported steady overall loan demand, stable deposit levels, and a slight decline in loan quality. Overall district employment and employee hours continued to increase at a modest pace in late April and early May. Contacts in the retail, wholesale trade, transportation, professional and high tech, real estate, tourism, and manufacturing sectors noted an increase in employment over the period. However, contacts in the auto, health services, and restaurants industries noted a decline. According to the U.S. Bureau of Labor Statistics, wages declined in all nine of Colorado s largest counties, those with employment of 75,000 or more, between the fourth quarter of 2015 and the fourth quarter of In the Metro Denver area, Douglas County recorded the largest decrease of 6.8 percent over-the-year 1, followed by Boulder County (-2.4 percent), Arapahoe County (-1.8 percent), Adams County (-1.3 percent), Jefferson County (-0.9 percent) and the City and County of Denver (-0.4 percent). The Colorado statewide average wage decreased 1.5 percent. Also, among the 344 largest counties in the U.S., 290 had over-the-year declines in average weekly wages in the same time period. The nationwide year-over-year decline in wages was only the eighth annual decrease since According to an annual compensation survey from the Mountain States Employers Council, Metro Denver employers plan pay raises of 3.1 percent next year, the biggest pay raise hike since The survey of 491 employers covering nearly 50,000 workers across the state have provided pay raises under three percent (usually tracking with inflation) since the Great Recession, in part because employers diverted more resources toward benefits to deal with rising health care premiums. The 3.1 percent increase in 2018 represents a large premium above the 2.6 percent inflation rate that the Colorado Legislative Council has forecasted. 1 Douglas County s average weekly wage historically has fluctuated due to the handful of Fortune 500 CEOs in the area. The end-of-theyear bonuses received by the CEOs, or lack thereof, can skew the average weekly wage that the Bureau of Labor Statistics reports. Metro Denver Economic Development Corporation July 5, 2017 Page 4

6 Labor Force and Employment Employment in Metro Denver increased 2.7 percent between May 2016 and 2017, adding 43,900 jobs during the period. The employment growth consisted of a 2.5 percent increase in the Denver-Aurora-Lakewood MSA, adding 35,100 jobs, and a 4.9 percent increase in the Boulder-Longmont MSA, representing an additional 8,800 jobs. The transportation, warehousing, and utilities supersector reported the largest percentage increase of 5.3 percent over-the-year, adding 2,900 jobs. The leisure and hospitality supersector recorded the second-largest growth over-the-year of 4.9 percent, creating 9,000 new positions during the period. Two supersectors recorded declines in employment over-the-year. The information supersector declined 1.8 percent and lost 1,000 jobs and the manufacturing supersector declined 0.7 percent and lost 600 jobs. Colorado employment rose 2.4 percent in May compared with the previous year s level, adding 62,400 new jobs. National employment levels increased 1.5 percent over-the-year, with an additional 2.2 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 May-17 (p) Apr-17 (r) May % Change Total 11-County Metro Denver* 1, , , , , % 2.9% 2.1% Denver-Aurora-Lakewood MSA 1, , , , , % 2.9% 2.1% Boulder MSA % 2.7% 2.2% Natural Resources & Construction % 5.1% -1.4% Manufacturing % 2.2% -1.5% Wholesale & Retail Trade % 2.2% 2.1% Transp., Warehousing & Utilities % 2.7% 2.8% Information % -0.9% 0.8% Financial Activities % 2.1% -0.6% Professional & Business Services % 5.1% 5.7% Education & Health Services % 3.7% 3.9% Leisure & Hospitality % 3.4% 2.6% Other Services % 2.8% 2.0% Government % 0.9% 1.8% Federal Gov't % -0.8% -0.7% State Gov't % 1.8% 2.8% Local Gov't % 0.9% 2.1% Colorado 2, , , , , % 2.4% 2.3% United States 146, , , , , % 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 Lockheed Martin is donating $1 million to Metropolitan State University of Denver (MSU Denver) over the next four years to support advanced manufacturing instruction and laboratories at the school s new Aerospace and Engineering Sciences Building. The funding will provide a new Lockheed Martin Additive Manufacturing Laboratory and will also establish an endowed director for the Advanced Manufacturing Sciences Institute. Metro Denver Economic Development Corporation July 5, 2017 Page 5

7 Boulder-based Ball Aerospace completed a six-month Phase A study of the scientific and technology requirements for the Wide Field Survey Telescope (WFIRST) project s Wide Field Instrument. WFIRST will be NASA s next flagship space telescope under development and will follow NASA s James Webb Space Telescope. WFIRST, the top priority of the most recent Decadal Survey in 2010, would bring the ability to capture individual images with the depth and quality of the Hubble Space Telescope, while covering 100 times the area. Aviation Centennial-based Boom Supersonic received 76 plane orders from five airlines after the company unveiled their completed design of its demonstration airplane at the International Paris Air Show. Currently, the company is building the XB-1 Demonstrator aircraft, which will launch from Centennial Airport in early Boom now employs 35 people and expects to double in size next year. Beverage Production Denver Beer Co. opened their new Arvada location, marking the brewing company s second taproom. The 4,350- square-foot brewery and taproom occupies the former Craig Chevrolet location at 5768 Olde Wadsworth Boulevard. It will feature seven-barrel beer-making capacity and a permanent food truck. Declaration Brewing Co. added 5,000 square feet of warehouse space near their current brewery to decentralize their grain and milling operations. The space will be used for beer-related experiments and will house their new graingrinding setup. With the new addition, the brewery aims to brew 20,000 barrels of beer a year and expand distribution into Wyoming. Bioscience Denver-based CirrusMD, which offers a text-first approach to telemedicine for large health systems and insurers, raised $7 million in a Series A funding round. The company plans to use the money to expand its sales and marketing staff, invest in customer support, and integrate more data analytics. Cirrus also plans to hire another 20 workers by the end of CardioNXT, a Westminster medical device company, raised $2.1 million in financing from several investors. The company makes technology targeting the understanding of cardiac arrhythmias such as atrial fibrillation. The funding will help the company perform a RADAR clinical trial to bring their technology closer to market. Energy Fossil Fuels Noble Energy Inc., the second-biggest oil and gas producer in Colorado, will shift about 100 workers from its Denver office to Greeley and Houston. According to spokespeople, the relocation of employees is attributed to changes in the company s portfolio of assets and operations and a need to focus on its three remaining areas of operation, which includes the Denver-Julesburg Basin. Noble plans to invest more than $850 million in the Denver-Julesburg Basin in 2017, which accounts for about 47 percent of the company s $1.83 billion budget for U.S. onshore operations. Westminster-based Tri-State Generation and Transmission Association, Inc. has shut down the New Horizon Mine in Nucla, Colorado. The mine shut down as a part of an agreement announced in September 2016 that will eliminate more than 500 megawatts of power produced at two coal-fired power plants by The New Horizon Mine supplies coal to Nucla Station which produces 100-megawatts of power and is expected to be retired by December 31, The shutdown has brought the total employment in Colorado coal mines to 995, down from 2,118 jobs in Denver s Caerus Oil and Gas LLC purchased $735 million of Encana Corp. s natural gas assets in the Piceance Basin on Colorado s Western Slope. With the acquisition, Caerus has more than 800 wells that are spread across more than 500,000 acres of mineral rights. The wells involved in the purchase produced an average 240 million cubic feet per day of natural gas plus 2,178 barrels per day of associated liquids (such as butane and propane) during the first quarter of Metro Denver Economic Development Corporation July 5, 2017 Page 6

8 XTO Energy, an oil and gas producer, will close its regional office in Englewood and relocate the 110 jobs based there. The closure is part of a larger move by XTO s parent company, ExxonMobil Corp., to consolidate employees at the company s new headquarters campus near Houston. Energy Cleantech According to a U.S. Energy Information Administration report, roughly 24 percent of all March electricity production in Colorado came from wind and solar, while the nation averages only 10 percent. This was well above the roughly 18 percent Colorado saw for Only seven states-minnesota, Illinois, Kansas, Oklahoma, Iowa, California, and Texashad a bigger share of electricity generated by renewables in The Colorado Legislature has mandated that 30 percent of Colorado s electricity from investor-owned utilities must come from renewable sources by Boulder-based Namasté Solar Inc. raised $3.1 million from more than 91 investors. The money raised is the secondlargest amount ever raised by an employee-owned cooperative in the country. The company will use the funding to support its expanding operations that have now grown to New York and California. The company also expects to grow its current 165 employees to 180 by the end of Utah-based Vivint Solar Inc. is expanding into Colorado with a new sales office in Centennial and plans to work with customers in the Denver and Boulder area. The company announced it has acquired new tax equity commitments for $100 million that will enable the company to install an estimated 70 megawatts of residential solar energy systems. Financial Activities Kansas-based Sunflower Financial Inc. and Texas-based Strategic Growth Bancorp Inc. finalized their merger. The combined company s headquarters will be in downtown Denver, making it the third-largest Colorado headquartered bank in total assets, behind FirstBank Holding Co. and National Bank Holdings Corp. The merger will create 60 offices in Colorado, Kansas, Missouri, New Mexico, and Texas with about $4 billion in banking assets and $3 billion in both net loans and deposits. Two banking transactions will lead to 15 Colorado bank branches changing hands. Greenwood Village-based National Bank Holdings Corp. is buying the assets of privately held Peoples Inc., which has six bank branches in Colorado. The deal was valued at $143 million. Texas-based Independent Bank Group Inc. announced it would be selling nine of its branches in Colorado to TBK Bank. The deal includes $100 million in loans and assumes about $168 million in deposits. IT-Software According to staffing firm Robert Half, Denver information technology firms are expected to increase hiring in the second half of The study found that 20 percent of Denver CIOs plan to add full-time technology professionals to their companies. However, 66 percent of Denver hiring leaders say that it is somewhat or very challenging to find skilled IT professionals. With Colorado s unemployment rate at an all-time low, the market for talent is extremely tight and technology professionals are in especially high demand. Software company Conga, which makes tools to help companies compose and edit documents and check contracts from within salesforce.com, has raised a strategic investment from Salesforce Ventures. The company will use the funding to expand its Broomfield-based headquarters, adding nearly 50 new employees in 2017 and funding research and development, sales, and conferences. North Carolina information technology company Peak 10 Inc. acquired Greenwood Village-based ViaWest in a $1.7 billion sale. The deal will create North America s largest privately held data center company. Denver-based Notion, which creates a wireless home monitoring system and awareness sensors, secured $10 million in Series A funding. The additional funding will allow the company to amplify their relationship with insurance companies and build more positive connections with homeowners. It will also be used to support product development and manufacturing, increase marketing efforts, and hire new employees in Notion s engineering, data science, and marketing departments. Metro Denver Economic Development Corporation July 5, 2017 Page 7

9 Boulder-based Sphero has split into two separate companies, with Sphero continuing their work on toy robots while the new company, Misty Robotics, will begin work on producing home-robots. The spin-off company hopes to bring a utility robot to every household and office with their first robot expected to be released in The company received $11.5 million in venture capital and will increase its team to about 30 employees. Xactly, a California sales performance software company, added 4,000 more square feet to its existing 1860 Blake St. location. The expansion will be followed by plans to hire 25 more workers to their current 75 employee workforce. Marketo, which creates software to manage marketing campaigns, has acquired temporary office space in Denver until they expand into 50,000 square feet this coming fall. Currently, the company has 14 employees with expectations to hire 150 by the end of 2017 and to have a total of 400 employees in the coming years. Evolve, a private home rental website service, plans to move their headquarters to the Denver City Center building. The company also received an $11 million investment, and plans to hire 100 employees over the next 12 months. Denver-based Ombud, a company that makes software that tracks how client organizations respond to requests and learns what decisions led to good outcomes, received an investment from the venture capital arm of the Central Intelligence Agency. The partnership with In-Q-Tel is expected to lead to Ombud doing 20 percent of its business with U.S. intelligence agencies. The company expects to grow from 25 employees to nearly 40 by the end of Ibotta Inc., a Denver-based tech company that provides an app that facilitates cash back on purchases, will double its space by the end of Currently, the company leases 38,000 square feet and will increase that to 76,000 square feet and add 92 employee to the current 259-person workforce. Technology firm TapInfluence is moving its headquarters from Denver to Silicon Valley to be closer to its partners, clients, and the technology talent the company requires. Currently, the company has 43 employees and an undisclosed number of local employees will not be moving with the company. Thankx, a San Francisco-based technology company that helps retailers and other companies personalize digital engagement, plans to open their second office in Denver in July. The company has hired 12 employees and aims to hire seven additional employees in Denver each month through the end of the year. Other Industry Headlines Amazon announced plans to build their second Colorado fulfillment center, and the state s first Amazon Robotics facility, in Thornton. The company will create 1,500 jobs in the new center who will work alongside innovative technologies at the 855,000-plus square-foot building. Amazon has agreed to purchase Whole Foods Market Inc. for $13.7 billion, or $42 per share. Whole foods has 19 stores in Colorado and a distribution center in Aurora, while Amazon has a sortation warehouse in Aurora, is building a fulfillment center in Aurora, and is planning another fulfillment complex in Thornton. Boulder-based Cocona, which produces woven fabric for companies including Adidas and Kenneth Cole, received $3.75 million in investments that the company will be use to expand inventory and invest in research and development. Conduent Inc., a business process services company, cut 244 jobs at its Highlands Ranch facility. The majority of the layoffs are employees that were hired for customer-care positions and were eliminated due to a change in business needs of a client. Nestlé Waters North America is launching a new ReadyRefresh facility in Denver, which will require a 10,000 square foot expansion to the company s 350,000-square-foot Denver facility. Coinciding with the move, the company will increase its delivery truck fleet from two to 30 vehicles, serving customers in a 50-mile radius. Metro Denver Economic Development Corporation July 5, 2017 Page 8

10 Employment Outlook The Manpower Employment Outlook Survey expects that the percentage of companies in the Denver-Aurora-Broomfield MSA hiring in the third quarter of 2017 will increase compared with the previous quarter. The percentage of companies hiring rose 3 percentage points between the second quarter of 2017 and the third quarter of 2017, with 30 percent of companies planning to expand their employment levels. The percentage of companies planning to decrease employment levels rose 3 percentage points from the second quarter, with 5 percent of companies planning to reduce employment levels. The majority of companies intend to maintain staff levels through the third quarter of the year, with the level falling 5 percentage points over-the-quarter to 64 percent. In the third quarter of 2017, job prospects appear best in transportation and utilities, wholesale and retail trade, information, financial activities, professional and business services, education and health services, leisure and hospitality, other services, and government. Hiring in construction, durable goods manufacturing, and nondurable goods manufacturing is expected to remain unchanged. Employment Outlook Survey Quarter 3 Quarter 2 Quarter 3 YTD YTD Ann Avg Denver-Aurora-Broomfield MSA Percent of Companies Hiring 30% 27% 25% 27% 24% 17% Percent of Companies Laying Off 5% 2% 3% 5% 3% 6% Percent of Companies No Change 64% 69% 69% 66% 71% 74% Percent of Companies Unsure 1% 2% 3% 2% 3% 3% United States Percent of Companies Hiring 24% 22% 23% 22% 22% 18% Percent of Companies Laying Off 4% 3% 5% 4% 5% 8% Percent of Companies No Change 70% 73% 71% 72% 72% 71% Percent of Companies Unsure 2% 2% 1% 2% 2% 4% Source: Manpower Inc. Hiring expectations in the U.S. strengthened slightly through the third quarter of 2017 compared with the prior quarter. The percentage of employers planning to increase employment levels rose 2 percentage points to 24 percent between the second and third quarters of The percentage of companies planning to reduce employment levels increased 1 percentage point over-the-quarter, with 4 percent of companies planning to lay off employees. The percentage of companies planning to maintain staffing levels (70 percent) was 3 percentage points lower than the prior year s level, and 1 percentage point lower than a year ago. Unemployment Metro Denver s not-seasonally adjusted unemployment rate in May rose 0.2 percentage points from the April level of 2.1 percent. The May unemployment rate was 0.7 percentage points below the May 2016 level of 3 percent. All seven Metro Denver counties reported increases in unemployment rates over-the-month, but all seven Metro counties reported decreases in unemployment rates over-the-year of 0.6 percentage points or more. Metro Denver Economic Development Corporation July 5, 2017 Page 9

11 Labor Force Statistics (000s, not seasonally adjusted civilian labor force) May 2017 (p) 2017 YTD AVG 2016 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, % 7.6% 3.8% Adams County % % % 9.4% 4.2% Arapahoe County % % % 7.7% 3.7% Boulder County % % % 6.2% 3.3% Broomfield County % % % 6.6% 3.5% Denver County % % % 7.9% 4.1% Douglas County % % % 6.0% 3.1% Jefferson County % % % 7.4% 3.6% Colorado 2, % 2, % 2, % 7.9% 3.7% United States 159, % 159, % 158, % 8.1% 4.6% Source: Colorado Department of Labor and Employment, Labor Market Information. (p) =preliminary Adams County recorded the highest unemployment rate for May 2017, rising 0.2 percentage points over-the-month to 2.6 percent. Douglas County recorded the lowest unemployment rate of 2 percent, and also rose 0.2 percentage points overthe-month. Colorado s unemployment rate rose 0.2 percentage points over-the-month to 2.4 percent during the month of May. The national unemployment rate of 4.1 percent in May was unchanged from the previous month, but decreased 0.4 percentage points over-the-year. Weekly First-Time Unemployment Insurance Claims Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg May-17 Apr-17 May % Change Metro Denver 1,116 1,103 1,220 1,165 1, % 1,627 1,211 Colorado 2,220 2,375 2,545 2,220 2, % 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. May unemployment insurance claims increased in Metro Denver, rising 1.2 percent between April and May, but recorded an 8.5 percent decrease over-the-year. The average year-to-date insurance claims in May 2017 was the lowest since November Claims throughout Colorado decreased over-the-month, falling 6.5 percent. Colorado s unemployment insurance claims decreased 12.8 percent between May 2016 and Consumer Sector Sentiment & Spending The Consumer Confidence Index for the U.S. increased in June 2017 after two months of decline, reporting a level of from the revised May level of 117.6, a 1.1 percent increase over-the-month. The national index for June 2017 was 22.1 percent above the June 2016 level of Analysts at The Conference Board stated that between May and June, the Present Situation Index increased from to 146.3, while the Expectations Index declined from last month to Consumers assessment of present-day conditions improved in June. Those saying business conditions are good increased from 29.8 percent to 30.8 percent, while those saying business conditions are bad declined from 13.9 percent to 12.7 percent. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating. Metro Denver Economic Development Corporation July 5, 2017 Page 10

12 Colorado is included in the Mountain Region Index and the area reported an increase in consumer confidence between May and June. The index rose to in June from the May revised level of 125.8, an increase of 6 percent over-the-month and a 33.6 percent increase over-the-year. For the Mountain Region, the Present Situation Index rose to in June from in May (revised), while the Expectations Index increased to from in May (revised). Consumer Confidence Index Month of Month of Month of YTD Avg YTD Avg YTD Avg Ann Avg Ann Avg June-17 (p) May-17 (r) June % Change Mountain % United States % Source: The Conference Board. (p) = preliminary (r) = revised National retail sales decreased 0.3 percent between April and May, totaling nearly $474 billion. Compared with year-ago data, retail sales were up 3.8 percent or an additional $17.4 billion. Motor vehicle sales rose 3.7 percent over-the-year but fell 0.2 percent between April and May. The building materials sector reported an increase of 10.8 percent over-the-year, and remained unchanged over-the-month. Gasoline sales rose 6.2 percent over-the-year but decreased 2.4 percent overthe-month. Core retail sales, which excludes motor vehicle, building material, and gasoline sales, recorded a 2.9 percent increase over-the-year and remained unchanged over-the-month. emarketer released their 2017 back-to-school spending forecast, with total spending expected to increase by 4 percent from last year during the shopping season of July to August. Retail sales in the U.S. during those core months are expected to reach $857.2 billion, accounting for 17 percent of total retail sales for the year. E-commerce for the backto-school season will grow 14.8 percent to $74 billion in 2017, representing 8.6 percent of total back-to-school retail sales. 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 overthe-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 % Change Total Metro Denver 7,440,821 7,526,929 7,345,759 14,967,750 15,400, % 6.4% 9.8% Adams County 1,478,241 1,508,804 1,447,453 2,987,045 2,967, % 10.4% 13.0% Arapahoe County 1,428,805 1,442,657 1,462,199 2,871,462 3,081, % 3.1% 8.5% Boulder County 616, , ,273 1,292,809 1,377, % 8.2% 6.6% Broomfield County 155, , , , , % 0.2% 7.6% Denver County 1,872,968 1,887,623 1,927,396 3,760,591 3,974, % 1.9% 15.5% Douglas County 735, , ,983 1,409,817 1,218, % 17.0% 5.0% Jefferson County 1,154,043 1,175,758 1,141,207 2,329,801 2,471, % 8.2% 3.9% Colorado 12,375,305 12,581,790 12,371,256 24,957,095 25,944, % 7.0% 9.9% Source: Colorado Department of Revenue. Metro Denver Economic Development Corporation July 5, 2017 Page 11

13 The U.S. Consumer Price Index (CPI-U) increased 0.1 percent in May to 244.7, up from in April. The advance in the housing component (+0.3 percent) was the major contributor to the overall monthly increase. The food and beverage index recorded the smallest increase of 0.1 percent, while the medical care index remained unchanged over-the-month. The apparel index (-1.4 percent) and the education and communication index (-0.2 percent) recorded the largest declines overthe-month. For the Denver-Boulder-Greeley area, the all items index increased by an average of 2.8 percent in The housing index (+6.1 percent) and medical care index (+1.3 percent) saw the largest increases over-the-year, with transportation reporting the largest decrease of 1.6 percentage points over-the-year. According to the AAA Daily Fuel Gauge Report, the national average fuel price for June decreased 5.4 percent from May to $2.24 per gallon. The June average fuel price was 2.1 percent lower than the prior year s level ($2.29 per gallon). Metro Denver reported a 4.8 percent decrease in the average fuel price between May and June. The average fuel price of $2.22 per gallon for June in Metro Denver was $0.02 lower than the national average. The area reported average fuel prices that were 0.8 percent higher in June 2017 than the previous year s level. Stock Market Two of the four stock market indices improved between May and June, but all four recorded increases between June 2016 and The Bloomberg Colorado index fell 4.1 percent over-the-month to 530.2, but was 3 percent above the prior year s level. The DJIA rose 1.6 percent between May and June and rose 19.1 percent over-the-year. The NASDAQ recorded a decrease between May and June of 0.9 percent, but recorded a 26.8 percent increase over-the-year. The S&P 500 recorded a 0.5 percent increase over-the-month and increased 15.5 percent between June 2016 and Stock Market Indexes Month of Month of Month of YTD Return YTD Return Ann Avg Return Ann Avg Return June-17 May-17 June Bloomberg Colorado % 3.6% 3.5% 17.7% S&P 500 2, , , % 2.7% 13.4% 3.5% NASDAQ 6, , , % -3.3% 15.9% 9.8% DJIA (Dow Jones) 21, , , % 2.9% 7.3% 6.4% Travel & Tourism Sources: Bloomberg.com; Yahoo! Finance. Auto club AAA expected 44.2 million people to travel at least 50 miles from home over the fourth of July weekend, a 2.9 percent increase from last year s record. The company also predicted that 37.5 million Americans (+2.9 percent) will drive for the holiday weekend and more than 3.4 million will fly (+4.6 percent). Colorado has moved back into the top 10 tourist-drawing states in America for the first time in 22 years in The state drew 82.4 million visitors who spent $19.7 billion in 2016 and generated $1.2 billion in local and state tax revenue, according to the Colorado Tourism Office. Because Colorado has set records for six straight years for the number of tourists, Colorado s share of the national tourist market increased to 3.1 percent, moving it up from the 13th-most-visited state in America to 9th. Denver hosted 31.5 million visitors in 2016 (+6 percent), with 17.3 million spending at least one night in Denver, setting a tourism record. According to Longwoods International, Denver surpassed 30 million total visitors and recorded the 11th consecutive year of record tourism numbers. Overnight visitors spent 5 percent more money than last year, setting a new tourism revenue record of $5.3 billion. Leisure travelers who stayed at least one night increased 7 percent to 14.7 million visitors. Skier visits to Colorado fell during the recently concluded season but recorded its second-best year in history. Colorado Ski Country USA, a collection of 22 Colorado resorts, attracted 7.3 million visitors during the season, a 2.5 percent decrease from last season. However, the 7.3 million visitors was up 6 percent over the five-year average. Metro Denver Economic Development Corporation July 5, 2017 Page 12

14 The Outdoor Industry Association and the Colorado Tourism Office have released reports finding that outdoorrecreation and tourism industries accounted for $28 billion and $19.7 billion, respectively, in consumer spending last year. Of the travelers who visited Colorado in the summer, 52 percent take scenic drives, 46 percent visit a state or national park, and 32 percent hike or backpack. Outdoor recreation and tourism last year brought in $2 billion and $1.2 billion in state and local taxes, respectively. Outdoor recreation directly created 229,000 jobs and nearly $10 billion in wages, while tourism created 165,000 jobs and $5.8 billion in wages. The average hotel occupancy rate in Metro Denver rose 10.9 percentage points to 82.2 percent occupancy in May compared with the April level. The May level was also 4.4 percentage points above the previous year s level. The average room rate for May was $ per night, 6.9 percent higher than the April level, and 2.5 percent higher over-the-year. Metro Denver Hotel Statistics Month of Month of Month of YTD Avg YTD Avg YTD Avg Annual Annual May-17 Apr-17 May % Change Percent of Hotel Rooms Occupied 82.2% 71.3% 77.8% 71.0% 70.7% 0.4% 68.0% 67.0% Average Hotel Room Rate $ $ $ $ $ % $ $ Source: Rocky Mountain Lodging Report. Spokespeople for Denver International Airport (DEN) reported that over 4.8 million passengers passed through the airport in April, decreasing 7.3 percent from the 5.2 million passengers in March. The April 2017 level was 9.9 percent higher than the April 2016 level, reaching a new April passenger record. Denver International Airport Passengers Month of Month of Month of YTD Total YTD Total YTD Total Annual Annual Apr-17 Mar-16 Apr % Change Number of Airline Passengers 4,812,910 5,193,855 4,377,597 18,646,371 17,425, % 53,156,278 49,863,286 Source: Denver International Airport, Traffic Statistics. Residential Real Estate Oakwood Homes plans to add 360 more homes in the Green Valley Ranch neighborhood by the end of 2017, alongside their current 148 homes. The new homes will be 1,200 to 1,400 square feet and are priced from $250,000 to the high $300,000s. Trammell Crow Residential purchased 20 acres of land in northeast Boulder, where the Dallas-based company will build a mixed-use development of 357 apartments, offices for nonprofits, a restaurant, and a green space. Richman Signature Properties completed a 273-unit apartment building at 2298 W. 28th Ave. in the LoHi district. The building offers one- and two-bedroom apartments ranging from 443 to 1,294 square feet. Amenities include a pet spa, a fully equipped fitness center, a clubhouse with sports bar and billiards, and a resort-style pool. San Francisco-based Carmel Partners broke ground on a 253-unit apartment complex on a 3.5-acre site on Osage Street in Lincoln Park. The five-story complex will have a ground floor gym, a rooftop patio and 368 parking spaces. The complex will be the company s fifth ground-up development in the Denver area. Camden Property Trust started demolishing the block at 32nd and Walnut streets to make way for a 230-unit apartment project that will cost $70 million to build. The tiered design will have three stories facing Larimer Street and up to five stories toward the middle of the block. The company said 10 percent of the units will be studios, 70 percent will be one-bedroom apartments, and 20 percent will be two-bedroom layouts. The complex will also include leasing offices, a fitness center, and 360 parking spaces in a parking structure. Metro Denver Economic Development Corporation July 5, 2017 Page 13

15 A new 14-story apartment tower is planned for the southeast corner of 13th and Delaware in Downtown Denver s Golden Triangle district. Argyle Residential will develop the 176-unit apartment complex that will include a fitness center, 1,580 square feet of retail space, and four floors of parking spaces. The transit-oriented development Central Park Station in the heart of Denver s Stapleton neighborhood is moving forward with the first phase. The development will consist of a five-story, 120-unit condominium project, a 190,000- square-foot Class A office building, a 300-unit apartment building, and 60,000 square feet of retail space. The condo project, the first phase of three, will include units that range from 550 to 1,200 square feet with prices ranging from the mid-$200,000s to the mid-$500,000s. The development is expected to break ground March Home Resales Existing home sales in Metro Denver increased between April and May, rising 24.2 percent to 6,004 homes sold during the month. Home sales rose 9.8 percent between May 2016 and Unsold homes on the market were 7.9 percent higher in May 2017 than May 2016, with 432 more homes on the market as of the end of the month. In addition, unsold homes on the market rose by 10 percent between April and May The average sales price for single-family homes rose 9.4 percent over-the-year to $476,705, while the average sales price of condominiums ($272,788) increased 6.1 percent during the same period. Between May 2016 and 2017, the single-family market added $40,877 to the average sales price, while the condominium market added $15,620 to the average sales price. Previously-Owned Home Sales Activity Month of Month of Month of YTD Total YTD Total YTD Total Ann Total Ann Total May-17 Apr-17 May % Change Home Sales (Closed) 6,004 4,834 5,470 22,234 21, % 45,203 49,789 Unsold Homes on Market 5,895 5,361 5,463 5,895 5, % 10,085 27,911 Average Sales Price-Single Family $476,705 $474,957 $435,827 $456,081 $419, % $304,178 $310,418 Average Sales Price-Condo $272,788 $271,411 $257,168 $265,119 $245, % $179,616 $180,321 Median Sales Price-Single Family $378,000 $365,000 $400,000 $250,000 $245,000 Median Sales Price-Condo $224,000 $218,400 $245,000 $142,000 $150,000 Source: Colorado Comps LLC; Denver Metro Association of Realtors; REcolorado. According to the National Association of Realtors (NAR), existing-home sales in May 2017 rebounded and climbed 1.1 percent to a seasonally adjusted annual rate of 5.62 million, up from the revised 5.56 million in April. Existing home sales in May increased by 2.7 percent over-the-year and at the third highest pace over the past year. Total housing inventory at the end of May increased 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 straight months. First-time buyers were 33 percent of sales in May, which was down from 34 percent in April but up from 30 percent a year ago. NAR economists said that the job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace, and the prevalence of multiple offers in some markets are pushing prices higher. Properties typically stayed on the market for 27 days in May, down from 29 days in April, and down from a year ago (32 days). Home Prices According to California-based Veros Real Estate Solutions, the Denver-area will record the second-highest home appreciation rate of 10.3 percent in the country over the next 12 months, behind only Seattle s expected 11.1 percent appreciation. Spokespeople from Veros explained that because Denver continues to show a tightening of home supply at around 1.1 months, an extremely low unemployment rate of 2.1 percent, and rapid population growth, Denver is forecasted to be one of the strongest markets in the country. Nationally, homes are expected to appreciate 3.7 percent in the next year. NAR data shows the median existing-home price for all housing types in May was $252,800, up 5.8 percent from May 2016 ($238,900). May's price increase marked the 63rd consecutive month of year-over-year gains. Median home prices in the Metro Denver Economic Development Corporation July 5, 2017 Page 14

16 West were the highest among all four regions ($368,800), rising 6.9 percent over-the-year. The median home price in the South increased 5.3 percent over-the-year, rising to $221,900. The Northeast median home price of $281,300 was 4.7 percent higher than the same time last year. The Midwest had the lowest median home price at $203,900, which was 7.3 percent higher than May A separate NAR report revealed that median home prices throughout the Metro Denver area increased between the fourth quarter of 2016 and the first quarter of The median price in the Boulder MSA ($548,400) was 10.8 percent higher over-the-quarter and was 14.3 percent higher than the first quarter of The Denver-Aurora MSA ($396,100) was 3.8 percent higher than the fourth quarter of 2016 and 7.3 percent above the year-ago level. The national median sales price fell 1.4 percent over-the-quarter to $232,100 but was 6.9 percent higher than the previous year s level. Of the 178 MSAs included in the first quarter 2017 report, the Boulder MSA reported the sixth-highest median price, while the Denver- Aurora MSA median price was the 12th highest. Median Sales Price of Existing Single-Family Homes ($000s) Quarter 1 Quarter 4 Quarter 1 YTD Avg YTD Avg YTD Avg Median Median 2017 (p) 2016 (r) % Change Boulder MSA $548.4 $494.8 $479.7 $548.4 $ % $383.7 $376.2 Denver-Aurora MSA $396.1 $381.6 $369.0 $396.1 $ % $252.4 $245.4 United States $232.1 $235.4 $217.2 $232.1 $ % $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 increased 1.3 percent between March and April The Denver index was in April, recording 16 straight months of growth. Prices in all 20 cities tracked by the index increased or remained constant over-the-month and all 20 cities recorded increases over-the-year. Denver s home prices in April 2017 were 8.2 percent higher than the prior year s level, recording the fourth largest over-the-year increase of the 20 cities. Seattle (+12.9 percent) and Portland (+9.3 percent) recorded the largest over-the-year increases, while Cleveland (+3.4 percent) reported the smallest increase. The national home price index increased 5.5 percent between April 2016 and Analysts for the index reported that demand is exceeding supply and financing is available, which means there is nothing right now to keep prices from increasing. The supply of homes for sale has barely kept pace with demand and the inventory of new and existing homes for sale shrunk down to only a four-month supply. Adding to price pressures, mortgage rates remain close to 4 percent and affordability is not a significant issue. Foreclosures Metro Denver recorded a 9.3 percent increase in foreclosures in May over the previous month and a 14.7 percent increase over the year-ago level. Foreclosures increased in Metro Denver from 225 in May 2016 to 258 in May Douglas County reported the only decrease in foreclosures over-the-year, falling 28.6 percent. The City and County of Broomfield recorded the largest increase of 200 percent over-the-year, while Jefferson County recorded the smallest increase of 5.6 percent. Three of the seven counties recorded decreases in the number of foreclosures over-the-month. Douglas County reported Metro Denver Economic Development Corporation July 5, 2017 Page 15

17 the largest decrease over-the-month, falling 31.8 percent to 15 foreclosures, while Boulder County reported the smallest decrease over-the-month, falling 21.4 percent. Real Estate Foreclosures Month of Month of Month of YTD Total YTD Total YTD Total Annual Total Annual Total May-17 Apr-17 May % Change Total Metro Denver* ,255 1, % 15,013 27,355 Adams County % 3,183 6,192 Arapahoe County % 3,589 6,237 Boulder County % Broomfield County % Denver County % 3,064 8,240 Douglas County % 1,534 1,865 Jefferson County % 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 New Homes The Census Bureau report on new home sales after adjustment for seasonal trends stated that national home sales increased in May to 610,000 annual sales from the revised April level of 593,000 annual sales. The May home sales level was 2.9 percent above April and was 8.9 percent above the previous year s level. Two of the four regions reported over-the-month increases in home sales. The West reported the largest over-the-month increase in sales, increasing 13.3 percent to 162,000 sales. The South recorded a 6.2 percent increase over-themonth, rising to 360,000 sales. The Midwest (-25.7 percent) and the Northeast (-10.8 percent) recorded declines in home sales overthe-month. Two of the four regions reported over-the-year increases with the South recording the largest increase of 15 percent, followed by the West (+14.1 percent). The Midwest recorded the largest over-the-year decrease, falling 23.6 percent. The Northeast recorded no change from May 2016 to May The National Association of Homebuilders (NAHB)/Wells Fargo Housing Market Index for newly built single-family homes decreased in June, reporting a level of 67, down from the revised May level of 69. Readings above 50 indicate builders view sales conditions as good rather than poor. The index has been above 60 since September According to the Census Bureau, the seasonally adjusted annual number of nationwide residential building permits decreased 4.9 percent in May (1.17 million permits) from April, and was 0.8 percent below May The over-the-month decrease was driven by a 13.9 percent decrease in single-family attached units, a 10.1 percent decrease in multi-family units, and a 1.9 percent decrease in single-family detached units. Only one of the three housing types increased between May 2016 and 2017 with single-family detached recording an increase of 6 percent. Multi-family permits decreased 13.1 percent, while single-family attached units recorded no change. The Northeast (124,000 permits) reported the largest increase in permits over-the-year, rising 20.4 percent, while the South (1.9 percent) recorded the smallest increase to 577,000 permits. The West recorded the largest decrease in permits over-the-year, falling 11.7 percent to 293,000 permits, while the Midwest decreased 1.7 percent to 174,000 permits. Metro Denver Economic Development Corporation July 5, 2017 Page 16

18 Residential building permits for the Metro Denver area decreased 39 percent in May compared with the prior year. The over-the-year decrease in total units permitted was attributed to a 74.9 percent decrease in multi-family permits and an 81.4 percent decrease in single-family attached units. However, the single-family attached market recorded an increase in permits over-the-month, increasing 60 percent. The number of single-family detached units permitted increased over-the month and over-the-year, rising 15.2 percent and 21.5 percent, respectively. The total number of units permitted in Metro Denver decreased 45.8 percent between April and May Residential Building Permits Month of Month of Month of YTD Total YTD Total YTD Total Total Total May-17 Apr-17 May % Change Single-Family Detached Units 1, ,595 4, % 5,947 7,799 Single-Family Attached Units % Multi-Family Units 343 1,644 1,369 5,344 4, % 8,679 6,195 Total Units 1,375 2,538 2,255 10,084 9, % 14,925 14,392 Apartment Rental Market Source: U.S. Census Bureau. The Denver Metro Apartment Vacancy and Rent Survey for the first quarter of 2017 reported decreasing vacancy in the metro area, falling 0.5 percentage points to 5.7 percent from the fourth quarter of The average vacancy rate in the first quarter of 2017 also decreased over-the-year by 0.4 percentage points. Vacancy rates ranged from 4.2 percent in Jefferson County to 6.6 percent in Adams County. Douglas County reported the largest over-the-year decrease of the submarkets, falling 5.3 percentage points. Vacancy rates declined over-the-year in four of the six submarkets, with the exception of Adams County that increased by 1.9 percentage points and Denver County that increased by 0.3 percentage points. Apartment Statistics Quarter 1 Quarter 4 Quarter 1 YTD Average YTD Average YTD Average Annual Average Annual Average % Change Apartment Vacancy Rate 5.7% 6.2% 6.1% 5.7% 6.1% 4.7% 6.2% Average Monthly Rental Rate (all units) $1,383 $1,347 $1,315 $1,383 $1, % $974 $856 Source: Denver Metro Apartment Vacancy and Rent Survey. The average monthly rental rate of apartments in Metro Denver increased across all six submarkets in the first quarter of The first quarter average rental rate in Metro Denver ($1,383) was 2.7 percent higher than the previous quarter s level. The rate was also 5.1 percent higher than the first quarter of 2016, representing an increase of $67 in the average monthly rental rate over-the-year. The average rental rate ranged from $1,278 in Adams County to $1,565 in the Boulder/Broomfield submarket. Commercial Real Estate Forest City Realty Trust will begin work in the spring of 2018 on a six-story, 190,000-square-foot Class A office building called Central Park Station One. The transit-oriented development (TOD) near the Central Park Station will also include 300 apartment units, 120 condos, and 60,000 square feet of retail. At buildout, the development will have 1 million square feet of office space, 100,000 square feet of retail, 1,000 apartments, 400 condos, and a 120-room hotel on 70 acres. A proposed expansion of the Pearl East office park could add three new buildings and about 222,000 total square feet of space east of Boulder Junction. Unico Properties and OZ Architecture presented the plans and have not released a start or completion date for the project. Metro Denver Economic Development Corporation July 5, 2017 Page 17

19 Tributary Real Estate purchased two acres of land at 3600 and 3695 Wynkoop St. in RiNo for $8 million. The area is part of the company s final plan to create a six-block mixed-use district and a community with walkable access to office space, retail, restaurants, hospitality, and other types of entertainment. About 7 acres on the northeast corner of Iliff Avenue and Parker Road in Aurora are being redeveloped with four buildings coming to the block. A Murphy USA gas station, Bubba s 33 restaurant, Arby s, and Caribou Coffee & Einstein Bros Bagels have signed leases for the $3.5 to $4 million project. Construction is set to start soon with stores opening in early Hotel research company STR found that Denver is seventh in the nation for new hotel room construction. Currently, Denver is constructing 4,872 hotel rooms, a 64.3 percent increase in building compared with a year ago. Only New York (15,473), Dallas (7,503), Los Angeles (5,887), Nashville (5,335), Seattle (5,325), and Houston (4,993) have more hotel rooms under construction. The University of Colorado Boulder approved the construction of an $82.5 million, 139,000-square-foot aerospace engineering sciences building. The facility will include a 200-seat auditorium, distance-learning-equipped classrooms, faculty offices, and spaces for graduate students. It is expected to be completed in The Anschutz Student Center at Colorado Christian University is on track to be completed by the fall semester in late August. The center will house a dining hall, bookstore, and meeting places for students in hopes of attracting more students to the Lakewood campus. Additionally, the 60,000-square-foot center will have an auditorium-style amphitheater, a great room for meeting and gatherings, and a coffee shop. Construction began in April Office Market The Metro Denver office market reported increases in the vacancy rate and the average lease rate through the second quarter of According to CoStar, the direct vacancy rate rose 0.7 percentage points over-the-year to 9.9 percent vacancy. The average lease rate rose 2.1 percent between the second quarters of 2016 and 2017, gaining $0.52 per square foot during the same period. Office construction in Metro Denver was robust during the second quarter of There was 1.96 million square feet of space completed across 21 buildings in the second quarter of Some of the largest office buildings completed through 2017 included the 318,000-square-foot One Belleview Station office building in Denver and the 300,000-square-foot Denver Health Administration office building in Denver. There was 4.69 million square feet of space under construction during the second quarter of 2017, an 18.7 percent increase in space under construction compared with the same time last year. Of this space, nearly 2.68 million square feet of space was under construction in the City and County of Denver, the largest amount of space of the seven counties at 57 percent of total Metro Denver construction. Office Market Statistics Quarter 2 Quarter 1 Quarter 2 Quarter 2 Quarter 2 Quarter Number of Buildings 6,140 6,129 6,103 6,065 6,044 6,021 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 9.9% 9.7% 9.2% 9.6% 10.7% 11.5% Vacancy Rate (with sublet) 10.9% 10.7% 9.8% 10.2% 11.1% 11.9% Avg. Lease Rate (direct, per sq. foot, full service) $25.88 $25.55 $25.36 $24.09 $22.74 $21.46 New Construction Completed (year-to-date) Currently Under Construction 1.96 MSF, 21 Bldgs 4.69 MSF, 41 Bldgs 0.77 MSF, 9 Bldgs 5.66 MSF, 45 Bldgs 0.46 MSF, 10 Bldgs 3.95 MSF, 34 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 0.30 MSF, 7 Bldgs 2.93 MSF, 26 Bldgs 0.31 MSF, 12 Bldgs 1.73 MSF, 21 Bldgs 0.49 MSF, 8 Bldgs 0.79 MSF, 10 Bldgs Metro Denver Economic Development Corporation July 5, 2017 Page 18

20 Industrial & Flex Market CoStar Realty data revealed that the industrial market remained relatively constant from the first quarter of 2017 to the second quarter, but loosened a bit compared to last year. The second quarter direct vacancy rate was 0.5 percentage points higher than the second quarter of The average lease rate rose 1.1 percent between the second quarters of 2016 and 2017, adding $0.08 per square foot to the average lease rate. There was also a 3.1 percent increase over-the-quarter in the average lease rate. Industrial Market Statistics Quarter 2 Quarter 1 Quarter 2 Quarter 2 Quarter 2 Quarter Number of Buildings 6,984 6,972 6,945 6,926 6,913 6,890 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 3.9% 3.9% 3.4% 2.8% 3.7% 5.1% Vacancy Rate (with sublet) 4.3% 4.3% 3.6% 3.1% 4.0% 5.3% Avg. Lease Rate (direct, per square foot, NNN) $7.56 $7.33 $7.48 $6.59 $5.61 $4.84 New Construction Completed (year-to-date) 1.93 MSF, 0.68 MSF, 2.07 MSF, 0.89 MSF, 1.18 MSF, 0.88 MSF, Currently Under Construction 22 Bldgs 3.26 MSF, 24 Bldgs 10 Bldgs 4.21 MSF, 31 Bldgs 11 Bldgs 3.46 MSF, 23 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 3 Bldgs 0.86 MSF, 3 Bldgs 13 Bldgs 1.31 MSF, 9 Bldgs 3 Bldgs 0.17 MSF, 4 Bldgs There were 22 industrial buildings completed in 2017 year-to-date, with 1.13 million square feet of the total industrial space completed in Adams County, or 59 percent. There were 24 buildings with nearly 3.26 million square feet of space under construction during the period, including the 1 million-square-foot Amazon fulfillment center in Aurora. The Metro Denver flex market recorded falling vacancy rates and increasing average lease rates through the second quarter of the year. The direct vacancy rate for flex space fell 0.5 percentage points to 7.1 percent between the second quarters of 2016 and The average lease rate rose 8.9 percent over-the-year to $11.79 per square foot but fell 0.8 percent overthe-quarter. There was 461,090 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. Four buildings offering over 136,000 square feet of new flex space are under construction. Flex Space Statistics Quarter 2 Quarter 1 Quarter 2 Quarter 2 Quarter 2 Quarter Number of Buildings 1,482 1,482 1,469 1,461 1,454 1,447 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 7.1% 7.7% 7.6% 8.0% 8.7% 12.2% Vacancy Rate (with sublet) 7.2% 7.9% 7.6% 9.2% 10.2% 13.6% Avg. Lease Rate (direct, per square foot, NNN) $11.79 $11.88 $10.83 $10.26 $9.77 $9.09 New Construction Completed (year-to-date) 0.46 MSF, 0.46 MSF, 0.1 MSF, 0.32 MSF, 0.36 MSF, 0.07 MSF, Currently Under Construction 9 Bldgs 0.14 MSF, 4 Bldgs 9 Bldgs 0.06 MSF, 2 Bldgs 3 Bldgs 0.31 MSF, 7 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 3 Bldgs 0.07 MSF, 1 Bldg 5 Bldgs 0.42 MSF, 6 Bldgs 2 Bldgs 0.10 MSF, 3 Bldgs Metro Denver Economic Development Corporation July 5, 2017 Page 19

21 Retail Market Metro Denver s retail market continued to gain momentum through the second quarter of 2017, based on data from Costar Realty Information. The direct vacancy rate decreased 0.1 percentage points between the second quarters of 2016 and 2017 but was 0.1 percentage points above the first quarter 2017 level. The average lease rate for retail space rose 5.7 percent over-the-year, adding $0.94 per square foot during this same period. Retail Market Statistics Quarter 2 Quarter 1 Quarter 2 Quarter 2 Quarter 2 Quarter Number of Buildings 12,007 11,986 11,910 11,806 11,732 11,652 Existing Square Feet (millions) Vacant Square Feet (direct, millions) Vacancy Rate (direct) 4.5% 4.4% 4.6% 5.0% 5.5% 6.0% Vacancy Rate (with sublet) 4.9% 4.8% 4.8% 5.3% 5.6% 6.2% Avg. Lease Rate (direct, per square foot, NNN) $17.42 $17.15 $16.48 $15.86 $15.49 $15.21 New Construction Completed (year-to-date) 0.86 MSF, 0.53 MSF, 0.64 MSF, 0.34 MSF, 0.32 MSF, 0.69 MSF, Currently Under Construction 45 Bldgs 1.43 MSF, 73 Bldgs 20 Bldgs 1.27 MSF, 63 Bldgs 44 Bldgs 1.04 MSF, 45 Bldgs Source: CoStar Realty Information, Inc. MSF=Million Square Feet 20 Bldgs 0.78 MSF, 32 Bldgs 32 Bldgs 0.58 MSF, 23 Bldgs 39 Bldgs 0.35 MSF, 16 Bldgs The majority of completed retail projects during the year were smaller than the previous quarter. Of the 45 buildings completed so far in 2017, the overall average size was 19,077 square feet. Douglas County recorded the largest amount of retail space completed through 2017, reporting 397,124 square feet of retail space completed. There were 73 buildings under construction during the second quarter of 2017, totaling 1.43 million square feet. Nearly 50 percent of the retail space under construction was found in four buildings, with the largest building being the 235,000-square-foot general retail building at 9th and Colorado Blvd in Denver. Metro Denver Economic Development Corporation July 5, 2017 Page 20

22 Monthly Economic Indicators Positive Changes Nonfarm Employment Growth % Companies Hiring (Denver Area) Unemployment Rate Initial Unemployment Insurance Claims Total Retail Sales Monthly/Quarterly Direction Year-Over-Year Direction 8 of of of 18 14,700 43,900 35,400 Employment up 0.9% from Apr. to May 30% 30% 27% Companies expecting to add workers rose 3 percentage points from 2Q 2017 to 3Q % -0.7 percentage points 2.6% Unemployment rose 0.2 percentage points between Apr. and May Employment up 2.7% from May 2016 to 2017 Companies expecting to add workers rose 5 percentage points from 3Q 2016 to 3Q 2017 Unemployment rate down from May 2016 to 2017 Year-to-Date Direction 1.2% -8.5% -12.4% Claims increased from Apr. to May Claims decreased from May 2016 to 2017 YTD employment up 2.2% through May YTD average up 3 percentage points compared with 2016 Down from 2016 YTD average of 3.4% YTD average claims decreased through May % 1.3% -2.8% Metro sales decreased from Jan. to Feb. Metro sales up from Feb to 2016 YTD sales down through Feb Mountain Region Consumer Confidence Index % Index up 6% from May to June Index up from June 2016 to 2017 YTD average up 30.8% through June 2017 Hotel Occupancy DIA Passengers Bloomberg Colorado Index 82.2% +4.4 percentage points 71.0% Increased 10.9 percentage points from Apr. to May -7.3% 9.9% 7.0% Passengers down from Mar. to Apr. Occupancy increased from May 2016 to 2017 Passengers up from Apr to 2017 YTD occupancy up from last year YTD passengers increased through Apr % 2.6% Index down 4.1% from to May to June Index up from June 2016 to 2017 YTD return through June 2017 Dow Jones Industrial Average 21, % 8.0% Index up 1.6% from May to Jun. Index up from Jun to 2017 YTD return through Jun Home Sales (closed) Median Home Price (Denver-Aurora MSA) 6, % 22,234 Sales up 24.2% from Apr. to May Sales up from May 2016 to 2017 YTD sales up 3.3% through May 2017 $396, % $396,100 Up 3.8% from 4Q 2016 to 1Q 2017 Price up from 1Q 2016 to 1Q 2017 YTD price 7.3% higher through 1Q 2017 Foreclosures % 1,255 Up 9.3% from Apr. to May Up from May 2016 to 2017 Down 14.4% YTD through May 2017 Residential Building Permits (Total) 1, % 10,084 Permits decreased 45.8% from Apr. to May Permits down from May 2016 to 2017 YTD permits up 11.1% through May 2017 Metro Denver Economic Development Corporation July 5, 2017 Page 21

23 5.7% -0.4 percentage points 5.7% Apartment Vacancy Rate Vacancy decreased 0.5 percentage points from 4Q 2016 to 1Q 2017 Vacancy decreased from 1Q 2016 to 1Q 2017 YTD average down 0.4 percentage points from last year 10.9% +1.1 percentage points +1.1 percentage points Office Vacancy Rate (with Sublet) Vacancy rate up 0.2 percentage points from 1Q 2017 to 2Q 2017 Vacancy rate up from 9.8% one year ago Vacancy rate up from 2Q 2016 to 2Q % +0.7 percentage points +0.7 percentage points Industrial Vacancy Rate (with Sublet) Vacancy rate unchanged from 1Q 2017 to 2Q Q 2017 vacancy up from 3.6% one year ago 2Q 2017 vacancy up from 3.6% one year ago 4.9% +0.1 percentage points +0.1 percentage points Retail Space Vacancy Rate (with Sublet) Vacancy rate up 0.1 percentage points from 1Q 2017 to 2Q Q 2017 vacancy rate up from 4.8% one year ago 2Q 2017 vacancy rate up from 4.8% one year ago Metro Denver Economic Development Corporation July 5, 2017 Page 22

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