"Rates are either at the same level as last year or a little bit below," chief economist for the Metro Denver Economic Development Corporation (Metro Denver EDC) Patty Silverstein said. "So, we are definitely seeing some nice leveling off of activity in the commercial real estate market."
The vacancy rates are in office, industrial, flex and retail markets.
In addition to that, some development projects are currently underway. However, many were planned and funded before the recession hit.
"On that whole commercial side, because those lease rates are still soft, we're not really seeing any speculative development, but what we are seeing are some public projects that are still moving forward," said Silverstein. "So, we have things like the Denver Crime Lab, or at Metro State, their Hotel and Learning Center and even some medical projects of course too, such as the Children's Hospital Broomfield expansion."
The GID Urban Development Group also broke ground on its second phase of an apartment project in Riverfront Park, and the Urban Land Conservancy is planning a transit-oriented development along the West Corridor light rail line.
Because of deficit challenges, fewer public projects are expected to start. Apartments and other high-density housing are becoming the preferred developments with residential builders as financing for detached homes remains slow.
Denver's job market has shown some improvement with 5,200 jobs added in the first two months of the year.
However, the job market is still slow. In healthier economic periods over the last decade, employers have added, on average, close to 10,000 jobs during the month of February alone.
In addition to that, the employment rate has not gone down.
"The unemployment rate has been rising recently, but it's because we have more people moving back into the labor force, because they see that we're seeing jobs being added in the economy once again," said Silverstein. "In fact, if we take a look at just for the first two months of the year, we have 1,000 more jobs on average this year than we did last year. So that's attracting more people back into the market, but it's taking them awhile to find that position again."
Overall, the economy has improved slightly, in both commercial real estate and jobs.
"I am more optimistic this year than I was at this time last year," said Silverstein. "We do have about 17 percent of our employers that say they're going to hire. That's about on par with where we were last year. Only 6 percent say that they're going to be laying off [employees]. So, the situation is certainly improving right about now."
(KUSA-TV © 2011 Multimedia Holdings Corporation)