Downtown Denver’s 2019 Economic Forecast
By Randy Thelen, Vice President of Economic Development, Downtown Denver Partnership
In a time of extreme ups and downs in the stock market, it is more important than ever for all of us as leaders to have a deep understanding of the underlying data. We must avoid letting the market swings dictate our mood and in turn our decisions as we consider the opportunities and risks before us. Instead, let’s be more fact-based and data-driven in our decision making.
Downtown Denver’s economy continues to perform exceptionally well. Companies and their employees continue to flock to downtown at a pace well above national, state and regional growth. Downtown jobs are providing people higher-paying job opportunities; downtown population continues to climb and our forecasts suggest even greater growth ahead; our retail scene continues to grow and prosper.
Let’s look at the data!
Office
Our downtown vacancy rates have dropped by 1.1 percentage points, which represents a nearly 10% drop in vacancy. The vacancy rate drop is even more impressive when you consider that Downtown Denver delivered 1.4MM+ square feet of new office space in 2018.
We grew the amount of square footage by well over 1 million square feet and we still realized reduced vacancies.
Our office absorption reached 1.8MM square feet last year, helping the Denver metro become the third highest in the country for net absorption last year, behind only New York City and San Francisco. With this extraordinary growth, we now find ourselves in an unusual, unenviable position.
Retail
Retail sales, as determined by sales tax receipts, show continued growth in 2018. Downtown Denver’s sales are up 3.6%. This represents a steady climb as we add new retail and restaurants to the mix. When you look at this growth over time, you realize this has been a remarkable run-up. Downtown retail has nearly doubled since 2010. This means more restaurants, more shops, and more entertainment; more opportunities to enjoy a robust urban center.
Jobs
Since 2010, 30,000 new jobs have been added to Downtown Denver (to be exact, 29,923 jobs).
We have proven ourselves capable of absorbing extraordinary growth in the heart of our city. Over the last year alone, the number of downtown jobs has grown by 4.1%. This is more than 50% faster growth rate than the region, state, and nation. The 4.1% job growth rate represents 5,400 new jobs. Companies—from startup to Fortune 500—are concentrating their operations more and more in our center city, and our existing companies are growing and prospering.
Digging into these jobs a bit further, we find that the wage scale continues to climb.
Over the past year, Downtown Denver’s wages grew by 6.8%.
This remarkable wage growth is driven largely by growing bonuses at our high-performing companies and the growing influence of technology jobs in our downtown. The growth and development of our downtown are creating better and better career opportunities for the people of Denver. Forecasters anticipate continued robust job growth downtown, reaching nearly 160,000 jobs downtown over the next four years.
People
The Downtown Denver population continues to climb as people young and old choose to enjoy our urban lifestyle. Today, our center city is home to nearly 26,000 people. We have added over 10,000 residents downtown in the past 8 years, and forecasts suggest we will add another 7,000 people in the next five years.
Forecasting further out, we will exceed 40,000 people living downtown by 2030.
Conclusion
Our economic indicators are showing a Downtown Denver economy that remains dynamic and strong. The data is showing us a robust office market that calls for more available product, population growth that indicates a need for even greater housing offerings, and retail growth that can be supported by the job and population growth. Opportunities remain for new investment in our center city.