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0Colorado Charter School Policy & Facility Summit | Cushman & Wakefield

Economic & Real Estate Update

Presented to The Colorado Leagueof Charter Schools

Bryan FryTJ JohnsonTim Callahan

February 25, 2016


Global Effect

Economic Outlook 2016Market Factors

Source: C&W Research, Kiplinger, IMF

• Election Year 2016• GDP growth over all of 2016 will be 2.5%, up slightly from 2.4% in 2015.• Global growth, currently estimated at 3.1 percent in 2015, is projected at 3.4

percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than in the October 2015 World Economic Outlook (WEO), especially in emerging market and developing economies.

• Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.

• By the end of 2016, the 10-year Treasury bond rate should be 2.6%, versus 1.9% now, with the 30-year mortgage rate at 4.3%, from 3.8%.

2

Foreign Capital Pouring Into U.S. CREOrigin of Capital

$20

$6$7

$5

$1 $1 $1

$26

$5

$9

$6$5

$1 $1$0

$10

$20

$30

Total Asia Europe Canada Middle East Australia Latin America

2014 2015

Bill

ions

Foreign investment in U.S. CRE up 30%

Total

Source: Real Capital Analytics3

17%

14%

8%

10%

7% 7%6%

5%4% 4% 4% 3% 3% 2% 2% 2% 2% 1%

0% 0%

-1%-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Investors Are Drawn to the U.S. FundamentalsOffice Rent Growth: U.S. Markets vs. Other Cities Around the World

Source: CW Research, Costar 4


Local Economic Drivers

6

Front Range Economic Drivers

Source: Colorado Office of Economic Development & International Trade, CW Research

A few Colorado workforce highlights:

Aerospace: With more than 2,400 employed, there is a 60% higher concentration of aerospace engineers in Colorado than the U.S. as a whole.Defense & Homeland Security: While over the past decade military occupations have decreased nationally, in Colorado, military occupations have increased by nearly 12,500.Energy & Natural Resources: Colorado has nearly a 270% higher concentration of mining and geological engineers than the U.S. as a whole.Financial Services: From 2004 to 2013, those employed as securities, commodities and financial services sales agents increased in Colorado by nearly 43%.

Beverage Industry: High growth sector

http://www.advancecolorado.com/key-industries/aerospace

http://www.advancecolorado.com/key-industries/defense-homeland-security

http://www.advancecolorado.com/key-industries/energy-natural-resources

http://www.advancecolorado.com/key-industries/financial-services

7

Front Range Economic DriversPopulation Growth

Source: BLS, CW Research, Metro Denver EDC

Colorado

Year Metro Denver Total % Northern Colorado Total State Total %

2015 3,062,513 9% 616,135 5,443,612 9%

2020 3,325,925 8% 700,700 5,935,920 9%

2025 3,580,052 7% 795,383 6,454,860 8%

2030 3,830,320 6% 891,600 6,970,651 7%

2035 4,061,697 5% 990,482 7,462,182 6%

2040 4,270,888 4% 1,088,928 7,925,230 5%

2045 4,428,009 3% 1,184,755 8,321,179 4%

2050 4,558,437 1,280,435 8,686,850

Metro Denver Northern Colorado

8

Denver- Record Setting Job GrowthDenver-Aurora-Broomfield MSA

Source: BLS, DTZ Research

48 49

-60

-40

-20

0

20

40

60

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total Nonfarm, 000's

20-Year Avg = 20,000

Record

9

Job Growth by SectorDenver-Aurora-Broomfield: Nonfarm Employment, Q4 2015

43

196

259

55

100

68

247

150

180

0 50 100 150 200 250 300

Information

FederalGovernment

Trans. &Warehouse

Retail Trade

FinancialActivities

Manufacturing

Prof. & Bus.Services

Leisure &Hospitality

Education &Health

Nonfarm Employment-Q4 2015, '000's


10

Denver – Recent Employment Trends

1320

1330

1340

1350

1360

1370

1380

1390

1400

1410

Jul 2

014

Aug

201

4Se

p 20

14O

ct 2

014

Nov

201

4D

ec 2

014

Jan

2015

Feb

2015

Mar

201

5A

pr 2

015

May

201

5Ju

n 20

15Ju

l 201

5A

ug 2

015

Sep

2015

Oct

201

5N

ov 2

015

Dec

201

5

Total Nonfarm Employment, 000's

2022242628303234363840424446485052

Y/Y Job Growth, 000's

No Let Up in Denver Continued Growth in 2015

Oil prices began to fall here

36,825 pace in 2015


11

Fort Collins –Recent Employment Trends

140142144146148150152154156158160

Jul 2

014

Aug

201

4Se

p 20

14O

ct 2

014

Nov

201

4D

ec 2

014

Jan

2015

Feb

2015

Mar

201

5A

pr 2

015

May

201

5Ju

n 20

15Ju

l 201

5A

ug 2

015

Sep

2015

Oct

201

5N

ov 2

015

Dec

201

5


0

1

2

3

4

5

6




12

Colorado Springs CO –Recent Employment Trends

258

260

262

264

266

268

270

Jul 2

014

Aug

201

4Se

p 20

14O

ct 2

014

Nov

201

4D

ec 2

014

Jan

2015

Feb

2015

Mar

201

5A

pr 2

015

May

201

5Ju

n 20

15Ju

l 201

5A

ug 2

015

Sep

2015

Oct

201

5N

ov 2

015

Dec

201

5


0

1

2

3

4

5

6

7





Denver’s Stunning Growth TrajectoryTotal Nonfarm Employment

855,000

1.39M

2.11M

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

1990 2000 2015 2020 2025 2030

Nearly the size of San Francisco Today (2.2 M)

Source: BLS


Economy & EducationKey Concepts

Employment growth- more households, students in some locations.

Technology & Education integration- incubators

Metro Denver development corridors are light rail centric

How does education fit in the live, work, play development model

Will Millennials remain in urban density after children

How does the limited supply of properties and higher real estate prices impact Charter

School growth opportunities

Gentrification impacting housing prices and shifting enrollment

Source: BLS


Demographics


DemographicsMillennials

33% of all adults by 2020

75% of work force by 2025

$1T in US consumer spending

Colorado developers and employers are

adopting the workplace strategy to meet

their needs

Source: Brookings Institute



Source: Goldman Sachs


Colorado Top 15 School DistrictsEnrollment & # Facilities



DemographicsDPS Strategic Regional Analysis- Spring 2015


Demographic/Capacity gap: compares the number of DPS students today (and forecast in 5 years) to the number of seats available in the region.




Gentrification Forecast 2020


Real Estate Overview


Rent Growth: Who’s HotOffice Asking Rents: Q4 2015 over Q4 2014, % Chg.

Source: Cushman & Wakefield Research

12%

8%7% 7% 7% 6%

5% 5% 5% 4%3%

4%

0%

2%

4%

6%

8%

10%

12%

14%

San

Fran

cisc

o

Nas

hvill

e

Cha

rlotte

Mia

mi

New

Yor

k-B

rook

lyn

Min

neap

olis

Den

ver

Tucs

on

Chi

cago

Atla

nta

Ora

nge

Cou

nty

U.S

.

*Statistics based on legacy DTZ data.


DemographicsFort Collins

158,600 population

Median Age: 29.5

Median HH Income: $53,780

Diversified Employment Base- Technology, Healthcare, Financial Services, Energy,

Education

Attracting Millennials for jobs and lifestyle

Source: BLS


Ft Collins – Commercial Development UpdateHarmony Technology Park

Being developed by MAVDevelopment

• 105 acre site• Planned for Office, Flex, and Retail spaces

• HTP One• Proposed 70,700 SF office building

• 5042 Technology Place• Existing 50,000 SF flex building, only 9,600 SF currently

available for lease.

• Retail center• 36,000 Sf of retail space expected to deliver late 2015.


DemographicsMetro Denver

3,000,000 Population

Median Age: 36.6

Median HH Income: $56,514

Diversified Employment Base- Technology, Healthcare, Financial Services, Energy

Attracting Millennials for jobs and lifestyle

Source: BLS


Joint Venture between Continuum Partners and CIM Group• $419 million project

• $47.9 million in tax-increment financing from Denver

• 26 acre site• University of Colorado Health Sciences vacated in 2008

• Proposing 900-1,100 apartment units, for-sale housing, 250,000 SF of retail 125,000 SF of office and a 140-room hotel.

• Will demolish all existing structures except for the historic nurses dormitory, five-story bridge and parking structure• Dormitory will be converted to apartments and the bridge

will become the Hotel.

• 1st phase scheduled to open late Summer 2017• 600 apartment units and ground floor retail.

Denver- Commercial Development Update9th & Colorado Blvd. Redevelopment


Denver- Commercial Development UpdateUnion Station

OFFICE• Six Buildings built since 2009 (Five completed

since 2014)

• 697,938 square feet

• Two Buildings under construction


• One Building planned


RETAIL

• 149,440 square feet of newly constructed retail since 2012.

• King Soopers, Twelve new restaurants in and around Union Station

• 70,238 square feet under construction

• Whole Foods

• As of now, aware of another 19,429 square feet that is planned.

RESIDENTIAL• Four Buildings built since 2013

• 1,098 units

• Two Buildings under construction

• 740 units

• One Building planned

• 618 units

HOSPITALITY

• Crawford Hotel (opened July 2014)

• 112 Rooms

• Kimpton Hotel (expected to deliver April 2016)

• 200 Rooms

• Hotel Indigo (expected to deliver October 2016)

• 203 Rooms

• Hilton Garden Inn (proposed)

• 200 Rooms


DemographicsColorado Springs

600,000 population

Median Age 35.2

Median HH Income $55,650

Government –DoD driven employment base

93% High School Graduation Rate- National Average 86%

Source: BLS


Colorado Springs Development

Collection of Four Venues that are expected to attract 1,000,000 new visitors each year, create 300 construction jobs, thousands of new retail jobs and $10 million in additional tax revenues.

UNITED STATES OLYMPIC MUSEUM | City for Champions | January 2018 | SW Downtown Urban Renewal Area

COLORADO SPORTS & EVENTS CENTER | City for Champions | TBD | SW Downtown Urban Renewal Area

SPORTS MEDICINE & PERFORMANCE CENTER | City for Champions | Spring 2017 | N Nevada UCCS Campus

• Museum providing highly interactive “Olympic Experience”, highlighting values, historic moments, outstanding athletes and teams, and collective memories of the Olympic & Paralympic games.

• State-of-the-art theater, gift shop, café, and broadcast studio.

• Outdoor multi-use stadium accommodating soccer, rugby, and lacrosse. • Indoor venue with flexible hard-court configuration. • Pre-Olympic and amateur sporting events (Olympic Time Trials, Qualifiers, Playoffs and World Championship events).

• Will be a nationally renowned destination for elite athlete clinical, testing, and counseling services and related university research and education.

• Will include a handicapped-accessible track and field facility.

CATALYST CAMPUS | O’Neil/Braxton | Summer 2016 | Pikes Peak & Colorado

• Collaborative work and education environment geared toward bolstering local technology, engineering and manufacturing industries.• Private sector companies (primarily DoD in nature) collaborating with public sector entities to spur workforce development, education and

startups to create long-lasting jobs in the community.


Class B Office Market AnalyticsFort Collins-Loveland-Greeley


Class B Office Market AnalyticsBoulder-Longmont


Class B Office Market AnalyticsNorth Metro Denver


Class B Office Market AnalyticsDowntown


Class B Office Market AnalyticsSouth Metro Denver


Class B Office Market AnalyticsColorado Springs


Class B Office Market AnalyticsPueblo


Residential GrowthMetro Denver


1

2

34

5

6

7

8

9

10

RESIDENTIAL GROWTH AREAS

1. NW Metro

2. Arvada

3. Parker/ Douglas County

4. Castle Rock

5. SW Metro

6. DIA Corridor

7. SE Aurora

8. East Aurora

9. NE Metro

10. Denver


NORTHWEST METRO

• Avg. Price Pt. for New Home:$548,803

• # of New Units: 356

• Avg. Price Point for Existing Homes: $453,956

**

*ANTHEM

COAL CREEK VILLAGES

FLATIRON MEADOWS


** *

ARVADA

• Avg. Price Pt. for New Home: $509,355


• Avg. Price Pt. for Existing Homes: $343,664

**

*CANDELAS

LEYDEN ROCK

WHISPER CREEK


*** *

PARKER / DOUGLAS COUNTY




SIERRA RIDGE

RIDGEGATE

MERIDIAN VILLAGE


*

**

*

CASTLE ROCK




MEADOWS

TERRAIN

CRYSTAL VALLEY RANCH


*

**

SOUTHWEST METRO




SOLTERRA

LYONS RIDGE


* *

*

DIA CORRIDOR




GREEN VALLEY RANCH

DENVER CONNECTION

HIGHPOINTE


*

*

*

SOUTHEAST AURORA




SOUTHSHORE

INSPIRATION

COPPERLEAF


** *

*

EAST AURORA




TRADITIONS

ADONEA

MURPHY CREEK


**

**

*

NORTHEAST AURORA




REUNION

BRANTNER

BUFFALO RUN


*

DENVER




STAPLETON

BOULEVARD ONE

SLOAN’S LAKE


Demographic Trends

Who is moving here?

Why are they

moving?

What does the

future hold?


Residential Trends

Branding Within

Communities

Density

Home Prices


cushmanwakefield.com

BRYAN FRY

+1 303 312 4221

[email protected]

TJ JOHNSON

+1 303 312 4222

[email protected]

© 2015

Cushman & Wakefield makes no guarantee, warranty, or representation about information contained herein which is subject to errors, and omissions, and change without notice. It is your responsibility to independently confirm its accuracyand completeness.The information contained herein shall not be used with the consent of Cushman & Wakefield

TIM CALLAHAN

+1 303 312 4216

[email protected]

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