CREW Denver holds mid-year economic forecast

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Patty Silverstein

On July 14, CREW Denver held its mid-year economic forecast and happy hour at the University of Denver’s Knoebel Events Center. Patty Silverstein, President and Chief Economist of Developmental Research Partners, told him economic provide for 2021 which included commercial real estate and construction industry trends. Silverstein shared a presentation on tracking the Great Divide and how the United States experienced what some economists have called a “K-shaped recovery,” a term that illustrates how different parts of the economy are are straightened out at different rates, times or magnitudes.


Source: United States Bureau of Economic Analysis

The world situation

  • COVID-19 has infected 187 million people worldwide, resulting in 4 million deaths (7/13/2021
  • The federal budget deficit has fallen from $1T in 2019 to $3.1T in 2020. Expect $3T in 2021.
  • Total debt held by the public in 2021 = $23,000,000 (103% of GDP)
  • The Federal Reserve kept the federal funds rate in a range of 0 to 0.25%
  • The decline in GDP in 2020 was steep, but not as severe as the declines of the 1930s and 1940s

Work and employment

  • The labor force has almost recovered and unemployment is moderating by mid-2021.
  • As people re-enter the workforce, there is still a lack of job security. It will take time to see how this unfolds.
  • All states lost jobs, but they all increased year-over-year. Colorado is currently ranked No. 30 despite being ranked No. 5 before covid, in part due to the severe blow to the hospitality and leisure industry.
  • 5% of jobs in Colorado are recovered, with Colorado Springs leading the job growth and Greeley being the hardest hit. Boulder is also lagging in job growth.
  • Natural resources and mining offered the Denver metro area’s highest weekly earnings in 2020, while recreation and hospitality offered the lowest.
  • Even high-wage industries lost jobs.
  • Metro Denver is expected to add about 50,000 jobs by the end of the year.

Colorado Commercial Real Estate

The Denver office market is changing due to remote work. Source: CoStar Group Inc.


  • Total space 2Q 2021 = 199.5 MSF
  • Vacancy rate = 12.3%
  • Rental rate = $29.29/ft2. ft.
  • Annual lease change = +3%
  • Under construction = 1.75 MSF
  • Completions = 1.47 MSF
  • Silverstein expects to see office vacancy rates come down due to the return of social collaboration to the office.


  • Total space 2Q 2021 =
  • 237.5 MSF
  • Vacancy rate = 6.4%
  • Rental rate = $8.84 NNN
  • Annual lease change = +1.3%
  • Under construction = 6.26 MSF
  • Completions = 3.27 MSF


  • Total space 2Q 2021 =
  • 176.2 MSF
  • Vacancy rate = 5.1%
  • Rental Rate = $18.91 NNN
  • Annual lease change = +3.3%
  • Under construction = 1.12 MSF
  • Completions = 0.26 MSF

Denver Metro Building Permit. Source: US Census Bureau, Building Permits.

Consumer activity

  • Millennials are the largest generation in Colorado at 1.36 million, own 8% of assets, owe 27% of liabilities, net worth $6.0 billion.
  • Baby boomers own 50% of assets, owe 30% of liabilities, net worth $61.9 billion.
  • Domestic consumer spending habits have changed drastically due to COVID
  • Highly tactile industries are experiencing a sharp drop in consumer spending.
  • Non-store retailers, garden, food and beverage stores saw an increase in consumer activity in 2020.
  • The Denver metro area showed a “good distribution of spending.”
  • Apartments saw an increase of around 3% in rentals
  • 2020 saw a 1.5% increase in building permits and a sharp rise is expected in 2021 (up to 25%).