quarterly economic report third quarter 2017 - jeffcoedc · 2017-10-31 · jefferson county...

Jefferson County, Colorado

Quarterly Economic Report – Third Quarter 2017

Jefferson County Quarterly Economic Report – Third Quarter 2017

Page 1

1.7%

Apartment Vacancy Rate

Apartment Average Lease Rate

Up 0.6 percentage points from

2Q 2016

Up 3.2% from 2Q 2016

4.7%

Industrial Warehouse Vacancy Rate

Flex R&D Vacancy Rate 4.0%

Flex R&D Average Lease Rate $10.24

Retail Average Lease Rate $14.38

Retail Vacancy Rate 4.6%

Office Class A Average Lease Rate $26.42

Industrial Warehouse Average Lease Rate $9.09

Office Class A Vacancy Rate 10.2%

$1,371

Residential Building

Permits

431Down 55.2% from 2Q 2016

Single-Family Detached Average Price$463,359

Up 8.9% from 2Q 2016

Single-Family Attached Average Price$255,379

Up 10.7% from 2Q 2016

Unemployment Rate2.2%

Down 0.9 percentage points

from 2Q 2016

Existing Home Sales3,177

Up 5% from 2Q 2016

2017Third Quarter

Quarterly Economic Summary

Employment227,550

Down 0.6% from 1Q 2016

220,000

225,000

230,000

235,000

240,000

1Q16 2Q16 3Q16 4Q16 1Q17

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

U.S.

Colorado

Metro Denver

Jefferson County

2Q 2017

-

600

1,200

1,800

2,400

2Q16 2Q17

SFA

SFD

$200,000

$300,000

$400,000

$500,000

2Q16 3Q16 4Q16 1Q17 2Q17

SFA SFD

3.5%

4.0%

4.5%

5.0%

$1,000

$1,100

$1,200

$1,300

$1,400

2Q16 3Q16 4Q16 1Q17 2Q17

0

300

600

900

1,200

2Q16 3Q16 4Q16 1Q17 2Q17

0.0%

4.0%

8.0%

12.0%

Class A

Office

Industrial Flex Retail

2Q16 2Q17

$0.00 $6.00 $12.00 $18.00 $24.00

Retail

Flex

Industrial

Class A Office

2Q16 2Q17


Page 2

Jefferson County Economic Headlines

Rankings

Golden and Arvada ranked among the top 10 best cities in Colorado for raising a family, according to

SmartAsset. The ranking was based on metrics in 10 categories ranging from median home values to child

care costs. Golden (first) and Arvada (sixth) received accolades for rising median home values, low

unemployment rates, and low crime rates.

Arvada, Westminster, and Lakewood ranked among the 2017 best real estate markets in the nation,

according to WalletHub. Arvada ranked 13th, Westminster ranked 28th, and Lakewood ranked 41st. The

company compared 300 cities of varying sizes across 21 key indicators of housing-market attractiveness and

economic strength.

The Colorado School of Mines was the highest ranked school in the state on the U.S. News & World

Report’s annual list of the nation's 220 top national universities. The Colorado School of Mines tied two

other major universities at No. 75 on this year's list, up from No. 82 in the 2016 list. U.S. News bases its

annual rankings on such factors as assessments by peer universities and high school counselors, student

retention and graduation rates, and faculty resources. Princeton University ranked first, followed by Harvard

University and the University of Chicago.

Company Announcements

Trimble is expanding its operations in Jefferson County, and has begun construction on a second building at

its campus in Westminster. The expansion project has the potential to create up to 660 new high paying jobs

- more than doubling its existing workforce and making it one of Jefferson County's largest primary

employers. Once completed, the Westminster campus will be Trimble's largest employment center and will

serve as a central business hub for the company's core market segments. The new 120,000 square-foot facility

is scheduled for completion in late 2018.

Preliminary construction is underway at Lockheed Martin’s new $350 million Gateway Center facility that

will produce next-generation satellites. The new facility, slated for completion in 2020, is located on the

company’s Waterton Canyon campus in Jefferson County. Lockheed Martin has added more than 750 jobs

to its Colorado workforce since 2014, and currently has about 350 job openings in the Metro Denver area

alone.

Health care automation firm Swisslog Healthcare Solutions is relocating and expanding its operations in

Westminster. The company expects the expansion will create 173 high-paying jobs with an average salary of

$86,500, and bring $1.8 million in capital investment to the county over the next couple of years.

Plans are underway for Golden-based ski retailer Powder7 to build a new 18,000-square-foot facility. The

building will include a 13,400-square-foot warehouse, retail and office space, and two parking lots for

employees and customers.

Special Aerospace Services opened a new 25,000-square-foot automated machining and specialized

manufacturing facility in Arvada. The firm plans to expand manufacturing activities and will more than

double its workforce to 30 people in the next two years.

The $250 million Jefferson Parkway project—which has been in the planning phase for more than a

decade—is expected to take another step forward in coming months when it submits plans to the Colorado

Department of Transportation by the end of 2017. The project will connect the proposed toll road with the

Colorado highway system at three junctions: Highway 93, Highway 72, and Highway 128. The 10-mile

proposed toll road fills in the gap in Metro Denver’s beltway between the end of C-470 near Golden and the

start of the Northwest Parkway near Broomfield.

http://www.bizjournals.com/company/colorado-school-of-mines/60239

http://www.trimble.com/


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Goldberg Brothers announced it is relocating and expanding its operations into 95,520 square feet in the

Ken Caryl Business Center, in unincorporated Jefferson County. The manufacturing company has plans to

create 30 jobs and add $2 million in personal property.

Sprouts Farmers Market opened its first Arvada location in September 2017. The 28,000-square-foot store

is the chain’s 32nd Colorado location and will provide natural and organic food.

BPL Plasma opened its 37th plasma donation center in Lakewood. The new center will provide cutting-edge

pharmaceutical therapies, will support about 35 new jobs in its first year of operation, and up to 70 new jobs

in the future as its donor base expands. Each center infuses up to $5 million into the local economy each year

through fees paid to donors.

Golden-based Outward Bound USA received a $5 million donation from the S.D. Bechtel Jr. Foundation to

open a new lab to train instructors and create new curriculum. The Outward Bound Professional Learning Lab

will establish a process to measure student outcomes and assess their impact.

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.

Gemini Beer Co., a wholesaler of bottled beers, will open a taproom next to the new light rail station in

Westminster. The company will be the first tenant of a ground-up, mixed-use project planned near the

Westminster Station. Gemini will occupy 3,000 square feet on the bottom floor of the development and

expects to hire 10 employees.

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 Blvd. It will feature seven-barrel beer-making capacity and a permanent food truck.

Metropolitan Region and State Economic Headlines

Colorado ranked fourth after Nevada, Utah, and Florida, according to the Economic Innovation Group’s

Index of State Dynamism. 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 ranked No. 6 on CNBC’s list of “America’s Top States for Business”, down from No. 3 in 2016

and No. 4 in 2015. Of the 10 ranking categories, Colorado’s highest rankings were in quality of workforce

(#4), technology and innovation (#7), and business friendliness (#8).

Colorado ranked No. 6 on WalletHub’s annual “Best State Economies” list, No. 4 for startup activity, and

is in a four-way 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.

Colorado ranked eighth for attractiveness to the aerospace manufacturing industry in a report from

PricewaterhouseCoopers. Colorado was ranked No. 35 for cost; No. 3 for labor; No. 7 for infrastructure; No.

28 for industry; No. 30 for economy; and No. 2 for tax policy. The top states for aerospace manufacturing

included Georgia, Michigan, and Arizona.

Denver ranked among the top 10 in the nation for talent, capital, and growth opportunities for

technology, according to real estate services firm Cushman & Wakefield. In the Tech Cities 1.0 report, San

Jose-Silicon Valley is ranked No. 1, followed by San Francisco, Washington, D.C., and Boston. While


Page 4

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.

Employment Activity

Business Count, Average Weekly Wage, and Employment by Supersector

The number of businesses throughout Jefferson County increased 2.6 percent between the first quarters of 2016

and 2017, a net gain of 505 businesses. Ten of the 13 supersectors reported growth in the number of businesses,

with the largest percentage increase in the other services sector, recording a 14.3 percent increase or a gain of 222

new businesses. Education and health services also reported a significant increase in businesses, rising 6.1 percent

over-the-year, and creating 123 new businesses. Three supersectors—other services, education and health

services, and professional and business services—added the most new businesses over-the-year, representing

nearly 91 percent of the over-the-year absolute increase in the number of businesses. Mining and logging and

retail trade were the only supersectors to shed businesses during the period, decreasing 6.9 percent and 1.8

percent, respectively. The government sector was the only sector to maintain the same business levels compared

with one-year ago.

The average weekly wage for Jefferson County was $1,126 during the first quarter of 2017, rising 9.9 percent

over-the-year. The average weekly wage for Jefferson County was highest in the wholesale trade sector, where the

average individual earned $2,036 per week. This sector has maintained the highest average weekly wage for the

last three consecutive quarters. Twelve of the 13 supersectors recorded over-the-year increases in the average

weekly wage, led by the largest gains in the mining and logging (+25.8 percent) and information (+19.5 percent)

supersectors. The lowest average wage was in the leisure and hospitality supersector, with an average weekly

wage of $385. Transportation, warehousing, and utilities (-3 percent) was the only supersector to record a decline

in wages over-the-year.

1Q 2016 1Q 2017 1Q 2016 1Q 2017 1Q 2016 1Q 2017 1Q 2016 1Q 2017

19,453 19,958 $1,025 $1,126 228,819 227,550 1,543,542 1,575,561

Mining & Logging 144 134 $1,150 $1,447 907 784 12,693 12,409

Construction 2,056 2,101 $1,044 $1,126 14,094 15,026 87,354 91,831

Manufacturing 511 517 $1,873 $1,991 18,728 18,655 85,642 86,332

Wholesale Trade 1,534 1,553 $1,915 $2,036 7,172 6,919 76,196 77,413

Retail Trade 1,787 1,755 $549 $596 28,906 28,809 151,365 152,371

Transp., Warehousing & Utilities 284 288 $1,502 $1,457 3,343 3,620 52,024 55,238

Information 303 307 $1,471 $1,758 4,327 4,108 53,975 54,406

Financial Activities 2,135 2,156 $1,212 $1,348 11,172 11,235 107,109 110,081

Professional & Business Services 5,504 5,617 $1,357 $1,572 36,679 36,847 283,673 288,599

Education & Health Services 2,001 2,124 $783 $909 36,094 32,984 200,883 201,568

Leisure & Hospitality 1,449 1,457 $356 $385 25,562 25,582 168,095 173,003

Other Services 1,548 1,770 $667 $676 7,059 7,654 47,235 50,109

176 176 $1,070 $1,108 34,733 35,324 216,994 222,117

Total All Industries

Jefferson County Metro Denver

Average Weekly

Wage

Quarterly

Business Count

Note: Industry data may not add to all-industry total due to rounding, suppressed data, and employment that cannot be assigned to an industry.

Source: Colorado Department of Labor and Employment, Labor Market Information. Quarterly Census of Employment and Wages (QCEW).

Business and Employment Indicators by Supersector

Quarterly Employment

Level

Quarterly

Employment Level

Government

Private Sector


Page 5

Jefferson County employment decreased 0.6 percent in the first quarter of 2017 compared with the prior year,

representing a decline of 1,269 jobs. Seven of the 13 supersectors reported employment increases over-the-year.

The other services supersector recorded the largest percentage increase in employment, which rose 8.4 percent or

595 jobs between the first quarters of 2016 and 2017. The largest supersector by employment—professional and

business services—recorded a 0.5 percent increase over-the-year and added 168 new jobs. The transportation,

warehousing, and utilities and construction supersectors also recorded significant employment growing, rising 8.3

percent and 6.6 percent, respectively. Employment declined in six of the 13 supersectors during the period,

ranging from a 13.6 percent decrease in mining and logging to a 0.3 percent decline in the retail trade supersector.

The largest absolute decline was in the education and health services supersector, decreasing by 3,110 jobs over-

the-period primarily as a result of a reclassification of workers to the other services sector.

Metro Denver recorded moderate employment growth between the first quarters of 2016 and 2017, rising 2.1

percent to nearly 1.6 million jobs. Twelve of the 13 supersectors in Metro Denver reported increases over-the-

year. The largest absolute increases in employment were in the government (2.4 percent) and professional and

business services (1.7 percent), creating 5,123 jobs and 4,926 jobs, respectively. Transportation, warehousing, and

utilities recorded the largest percentage increase in employment over-the-year, rising 6.2 percent. The mining and

logging supersector (-2.2 percent) recorded the only decline in employment during the period.


Page 6

Labor Force and Unemployment

The Jefferson County unemployment rate

fell 0.9 percentage points between the

second quarters of 2016 and 2017 to 2.2

percent, the lowest level since 2000. The

county reported a 3 percent increase in the

labor force during the same period, with an

additional 9,440 individuals working or

looking for a job. Of the seven Metro

Denver counties, Jefferson County recorded the third-lowest unemployment rate and the fourth-largest over-the-

year decrease in the unemployment rate. Metro Denver’s unemployment rate fell at the same rate as Jefferson

County, decreasing 0.9 percentage points over-the-year to 2.3 percent. Metro Denver’s labor force also grew at

the same rate as Jefferson County’s rate of 3 percent over-the-year, adding 50,660 individuals working or looking

for jobs. Similar to Jefferson County, the second quarter 2017 unemployment rate was the lowest rate recorded

since 2000.

Colorado’s unemployment rate declined 1.1 percentage points over-the-year to 2.4 percent and the state’s labor

force rose 2.8 percent over-the-year. The unemployment rate in the U.S. declined 0.6 percentage points

between the second quarters of 2016 and 2017 to 4.2 percent, with a 0.8 percent increase in the labor force

over this period of time.

2Q 2016 2Q 2017Yr/Yr %

Change2Q 2016 2Q 2017

Jefferson County 315,594 325,031 3.0% 3.1% 2.2%

Metro Denver 1,686,591 1,737,248 3.0% 3.2% 2.3%

Colorado 2,884,896 2,966,778 2.8% 3.5% 2.4%

U.S. (000s) 159,141 160,378 0.8% 4.8% 4.2%

Labor Force Unemployment Rate

Sources: Colorado Department of Labor and Employment, Labor

Market Information; U.S. Bureau of Labor Statistics.


Page 7

Consumer Activity

Consumer Confidence

The Consumer Confidence Index for the U.S.

increased between the first and second

quarters of 2017, reporting a level of 118.1

from the revised first quarter 2017 level of

117.5, a 0.5 percent increase over-the-quarter.

The U.S. Index also increased over-the-year,

increasing 24.5 percent between the second

quarters of 2016 and 2017. Consumer

confidence in the U.S. has increased over-the-

year for four consecutive quarters.

Colorado is included in the Mountain Region

Index and the area reported an increase in

consumer confidence between the first quarter

of 2017 and the second quarter of 2017,

reporting a level of 132.5 from the revised

first quarter 2017 level of 124.8, a 6.2 percent

increase over-the-quarter. The Mountain Region Index also reported an over-the-year increase of 29.7 percent. In

the Mountain Region, consumer confidence in the second quarter was at its highest level since 2006.

Lodging

The West Denver market ended the first half

of 2017 with a hotel occupancy rate of 74.9

percent, 1.2 percentage points higher than the

same time last year. The market’s average

room rate was $114.24 per night, 3.5 percent

higher than last year. Metro Denver reported a

hotel occupancy rate of 74.1 percent for the

first half of the year, 0.4 percentage points

higher than last year. The average room rate

for Metro Denver was $140.04 per night year-

to-date, $3.32 per night higher than the same

period one-year prior.

Residential Real Estate

The Ascent, an $86 million apartment project in Westminster, broke ground. The Ascent project is part of the

old Westminster Mall redevelopment that will include a mix of residential, office, and entertainment. The

Ascent will include 10 percent of its 255 units reserved for income-restricted tenants and 24,000 square feet of

ground-floor retail.

The city of Westminster partnered with Mile High Development, Koelbel and Company, and Longs Peak

Advisors to build a five-story, mixed-use affordable housing project in Downtown Westminster. Eaton Street

Apartments will contain 118 affordable housing units that will serve residents earning 60 percent or less of

the area median income. The project is slated for completion in late 2018 and will have four stories of


Page 8

residential units over a ground floor common area and townhomes, as well as 22,000 square feet of retail

space.

Home Sales

Jefferson County’s housing market continued to show strong positive momentum. The number of single-family

detached homes sold increased 5.4 percent to 2,409 homes sold between the second quarters of 2016 and 2017.

Prices of single-family detached homes continued to appreciate, rising 8.9 percent to $463,359 during the period.

Among the seven counties in Metro Denver, Jefferson County recorded the third-highest number of homes sold

and reported the fifth-highest average sales price. The City and County of Denver posted the most homes sold

during the quarter, selling 2,667 homes, and reported an over-the-year increase of 1.8 percent. Boulder County

recorded the highest average sales price of $649,551, a 6.7 percent increase over-the-year. Four of the seven

counties in Metro Denver recorded an increase in the number of single-family detached homes sold over-the-year,

while the average sales price rose in all seven counties during this same period of time.

The number of single-family attached home sales in Jefferson County increased 3.9 percent between the second

quarters of 2016 and 2017, to 768 homes sold. The average sales price of a single-family attached home also

increased, recording a 10.7 percent increase to $255,379 during the same period. Among the counties across

Metro Denver, Jefferson County recorded the third-highest number of homes sold and reported the fifth-highest

average sales price in the single-family attached market. Arapahoe County posted the most single-family attached

homes sales (1,171 sales), while Boulder County reported the highest average sales price ($364,907) during the

second quarter. Four of the seven counties in Metro Denver recorded an increase in the number of single-family

attached homes sold over-the-year, while the average sales price rose in six of the seven counties during this same

period of time.

Apartment Market

Jefferson County tied with Douglas County for the second-lowest apartment vacancy rate of the six Metro Denver

county market groups for the second quarter of 2017. The Jefferson County vacancy rate rose 0.6 percentage

points between the second quarters of 2016 and 2017 to 4.7 percent vacancy and increased 0.5 percentage points

over-the-quarter. The Jefferson County vacancy rate was also 0.3 percentage points below the Metro Denver

average (5 percent). The average rental rate in the county for all apartment types ($1,371) increased 3.2 percent

Adams Arapahoe Boulder Broomfield Denver Douglas Jefferson

Home Sales

Single-Family Detached

2Q 2017 1,853 2,469 1,247 305 2,667 1,962 2,409 12,912

2Q 2016 1,913 2,367 1,279 321 2,619 1,837 2,286 12,622

Single-Family Attached

2Q 2017 484 1,171 290 40 1,140 360 768 4,253

2Q 2016 492 1,202 297 27 1,127 308 739 4,192

Average Sold Price

Single-Family Detached

2Q 2017 $339,378 $434,173 $649,551 $465,929 $527,377 $529,165 $463,359 $481,250

2Q 2016 $312,358 $403,250 $608,512 $440,635 $466,983 $485,310 $425,359 $440,396

Single-Family Attached

2Q 2017 $230,310 $235,874 $364,907 $292,145 $331,560 $322,161 $255,379 $281,043

2Q 2016 $210,180 $212,098 $370,226 $259,730 $290,101 $288,837 $230,599 $253,253

Metro

Denver

Total

Metro Denver County Markets

Source: ColoradoComps.

Existing Home Sales


Page 9

over-the-year and rose 1.6 percent between the first quarter and the second quarter. The Jefferson County average

rental rate was $49 below the Metro Denver average in the second quarter of 2017 and was the third-lowest

average rental rate among the six Metro Denver county market groups.

The Metro Denver

apartment rental market

remained constrained

between the second

quarters of 2016 and

2017. Four of the six

county market groups

in Metro Denver

reported over-the-year

declines in the vacancy

rate, while all six

posted increases in the

average rental rate. The

vacancy rate in Metro Denver fell 0.4 percentage points over-the-year to 5 percent. Douglas and Adams

counties recorded the largest over-the-year decreases in the vacancy rate, falling 3 percentage points and 1.2

percentage points, respectively. The Metro Denver average rental rate of $1,420 per month for all apartment

types increased 3.6 percent over-the-year. The largest over-the-year increase in the average rental rate was in

the Boulder/Broomfield area (+5.1 percent) to $1,605 for all apartment types. Douglas County reported the

smallest over-the-year increase in the average rental rate, rising 0.7 percent.

Foreclosures

Foreclosure fillings in Jefferson County

increased between the second quarter of 2016

and 2017, following four consecutive quarters

of over-the-year declines in foreclosures.

Foreclosure filings in the county rose 35.2

percent compared with the previous year to

142 total filings. Jefferson County recorded

the highest over-the-year absolute increase in

foreclosures of the seven Metro Denver

Counties. Foreclosure filings also increased

between the first and second quarters of the

year, rising 16.4 percent. Despite growth in

foreclosure filings, second quarter foreclosure

activity remained near historic lows in Jefferson County.

Metro Denver recorded a decrease in foreclosure activity over-the-year, falling 3.7 percent to 754 filings in the

second quarter. Unlike Jefferson County, foreclosure filings in Metro Denver decreased 2 percent over-the-

quarter.

County

Vacancy

RateEfficency 1 Bed

2 Bed

1 Bath

2 Bed

2 Bath3 Bed Other All

Adams 5.2% $1,094 $1,164 $1,286 $1,533 $1,846 $1,997 $1,338

Arapahoe 4.3% $1,066 $1,189 $1,304 $1,575 $1,969 $1,710 $1,362

Boulder/Broomfield 5.1% $1,429 $1,431 $1,504 $1,854 $2,056 $1,356 $1,605

Denver 5.6% $1,227 $1,301 $1,356 $1,794 $1,990 $2,013 $1,439

Douglas 4.7% $1,363 $1,348 $1,504 $1,701 $2,090 $2,307 $1,554

Jefferson 4.7% $1,039 $1,246 $1,286 $1,545 $1,789 $1,308 $1,371

Metro Average 5.0% $1,201 $1,264 $1,336 $1,662 $1,942 $1,569 $1,420

Source: Denver Metro Apartment Vacancy and Rent Survey.

Metro Denver Average Apartment Rents and Vacancy

Second Quarter 2017


Page 10

Residential Construction

Residential building permits in Jefferson County decreased 55.2 percent between the second quarters of 2016

and 2017. Single-family detached permits accounted for all permits issued during the second quarter of 2017.

There was a 6.5 percent decrease in single-family detached permits issued throughout Jefferson County over-

the-year. Multi-family building permits fell from 494 permits issued during the second quarter 2016 to zero

permits issued during the second quarter of 2017. Zero permits were issued for single-family attached units

during the second quarter of 2017, down six permits from one year earlier.

Cities across Jefferson County reported variable trends in the three building permit categories between the

second quarters of 2016 and 2017. Arvada recorded the largest number of total permits within the county,

reporting 165 single-family detached permits for the second quarter of the year, a 19.5 percent decrease over

the previous year’s level. Golden, Lakewood, and Edgewater reported increases in single-family detached

permits over-the-year, while declines were reported in four market areas, ranging from -25.5 percent in

Westminster to -6.3 percent in unincorporated Jefferson County.

Commercial Real Estate

A new shared workspace is under construction in Westminster. SolderWorks will cater to entrepreneurs

that need amenities like a 3-D printer, soldering gear, laser cutters, and etching equipment to develop

prototype circuit boards and test ideas. SolderWorks also aspires to host how-tos and tuition-based programs

teaching people the basics of electronic circuits and how to program devices.

Conor Commercial Real Estate and WHI Real Estate Partners LP have broken ground on the Park 12

Hundred Tech Center in Westminster. The complex will consist of four rear-loaded single- and/or multi-

tenant buildings equipped for tech-centric industrial manufacturing and research and development. The four

buildings will total 324,200 square feet of industrial space and sizeable truck courts.

Metro Denver’s second Origin hotel is set to break ground in downtown Westminster on part of the site

formally occupied by the Westminster Mall. The 125-room hotel will include a 9,000-square-foot Marczyk

Fine Foods market, a restaurant, 4,000 square feet of conference space, and another first-floor retailer. The

project is expected to be completed in late 2018 or early 2019.

The city of Westminster broke ground on Central Square, a $5.5 million, 1.2-acre plaza at its new downtown

Westminster site. The plaza will host up to 200 events per year and will feature a large central gathering

space, an open pavilion, a stage, and open space. Downtown Westminster has dedicated 18 of its 105 acres to

parks and public spaces, with Central Square being the first to break ground.

2Q 2016 2Q 2017 2Q 2016 2Q 2017 2Q 2016 2Q 2017 2Q 2016 2Q 2017

128 120 6 - 84 - 218 120

205 165 - - - - 205 165

- 2 - - - - - 2

3 21 - - - - 3 21

60 73 - - 410 - 470 73

55 41 - - - - 55 41

10 9 - - - - 10 9

461 431 6 0 494 0 961 431

Single-Family

Detached

Jefferson County Residential Building Permits

Single-Family

AttachedMulti-Family Total Units

Unincorp. Jefferson County

Arvada

Lakewood

Edgewater

*Westminster included in Adams and Jefferson Counties. Total may reflect construction not in Jefferson County.

Source: U.S. Census Bureau.

Total Units

Golden

Westminster*

Wheat Ridge


Page 11

The City of Edgewater broke ground on its new 50,000 square-foot Civic Center, which will include a

Jefferson County public library, recreation center, police station and administrative offices for the city.

Note: lease rates for industrial, flex, and retail property are triple-net; office rates are full-service.

Office Market

Jefferson County reported mixed trends in vacancy rates across the three classes of office space. The Jefferson

County office market reported an improvement in the vacancy rates for Class B and Class C space between the

second quarters of 2016 and 2017, but reported a slight increase in vacancy in Class A during the same period.

Class B space reported a 1.5 percentage point decline over-the-year in the vacancy rate, falling from 14.8

percent to 13.3 percent. The vacancy rate for Class C space fell 1.3 percentage points to 4.7 percent, while

Class A space increased 2.1 percentage points to 10.2 percent. About 158,000 square feet of Class A and B

office space was added to the market over-the-year, representing 5.5 percent of all Class A and B space added

in Metro Denver.

The average lease rates for office space in Jefferson County continued to climb across all three classes of

office buildings through the second quarter of the year. Class A and Class C space reported the largest

increases in the average lease rate, rising 4.4 percent for both office types over-the-year. Class B space also

reported significant growth, increasing 2.3 percent to $19.51 per square foot.

Similar to Jefferson County, the Metro Denver office market also reported varied trends across all three classes

of office space between the second quarters of 2016 and 2017. Class B space reported a decline in the vacancy

rate, falling 0.6 percentage points over-the-year to 9.5 percent. Class A space recorded an increase in the

vacancy rate, rising 2.7 percentage points, while there was no change in the vacancy rate reported for Class C

space. The average lease rate in the office market increased for Class B and Class C office space over-the-year,

rising 4.1 percent and 8.8 percent, respectively. Class A office space reported a decline, falling 1.5 percent to

$30.07 per square foot.

Industrial Market

Industrial warehouse vacancy in Jefferson County was unchanged at 1.7 percent between the second quarters

of 2016 and 2017. The average lease rate rose significantly in the industrial warehouse market, increasing 15.4

percent over-the-year to $9.09 per square foot. The vacancy rate in the flex/R&D market reported an over-the-

year decrease of 1.5 percentage points, declining from 5.5 percent to 4 percent. The average lease rate fell 5.6

percent during the same period, decreasing to $10.24 per square foot.

The industrial warehouse market in Metro Denver reported mixed signals over-the-year. The industrial

warehouse market reported a 0.1 percentage point increase in the vacancy rate, rising from 4 percent to 4.1

percent. The average lease rate rose 0.5 percent to $7.50 per square foot. The flex/R&D market in Metro

Denver reported a 5.6 percentage point decrease in the vacancy rate over-the-year, falling to 7.4 percent from

13 percent. The average lease rate rose 6.1 percent during the period to $12.42 per square foot.

Retail Market

The Jefferson County retail market continued to gain momentum through the second quarter of 2017. The

vacancy rate decreased 1 percentage point between the second quarters of 2016 and 2017, falling to 4.6

percent. The average lease rate increased 2.6 percent over-the-year, rising to $14.38 per square foot. The

Jefferson County average lease rate was the highest average lease rate recorded in the county since 2009. The

county added 137,561 square feet to the retail market over-the-year, representing 8.7 percent of the nearly 1.6

million square feet added in Metro Denver during the period.

The Metro Denver retail market reported similar trends as Jefferson County through the second quarter of the

year. The vacancy rate in the area fell 0.1 percentage points to 4.5 percent during the period. The average lease

rate increased 5.7 percent during the same period, rising from $16.48 per square foot to $17.42 per square foot.


Page 12

Similar to Jefferson County, the average lease rate in the second quarter of 2017 was the highest rate reported

since 2009.

Commercial Construction

Nine buildings totaling about 216,090 square feet of commercial space were completed during the first six

months of 2017. The majority of completed square footage was office space with 128,000 square feet,

followed by 65,890 square feet of retail space and 22,200 square feet of flex space. The largest buildings

completed were the St. Anthony Medical Plaza III office building in Lakewood and Empire Lakewood Nissan

in Golden.

There was nearly 527,170 square feet of commercial space under construction as of the end of the second

quarter of 2017. More than 84 percent or 444,810 square feet of the space under construction was retail,

followed by flex space (11.5 percent of the total or 60,830 square feet) and industrial space (4.1 percent of the

total or 21,530 square feet). The largest buildings under construction were the Walmart and King Soopers

stores in Arvada.

Provided by:

Jefferson County Economic Development Corporation

1667 Cole Boulevard, Suite 400

Golden, Colorado 80401

303-202-2965

www.jeffcoedc.org

Prepared by:

Development Research Partners, Inc.

10184 West Belleview Ave, Ste 100

Littleton, Colorado 80127

303-991-0070

www.developmentresearch.net September 2017

2Q 2016 2Q 2017 2Q 2016 2Q 2017 2Q 2016 2Q 2017

Class A 5,416,175 5,520,175 8.1% 10.2% $25.30 $26.42

Class B 14,172,571 14,226,571 14.8% 13.3% $19.07 $19.51

Class C 3,440,449 3,440,449 6.0% 4.7% $14.47 $15.11

Class A 63,948,231 65,999,895 9.6% 12.3% $30.53 $30.07

Class B 94,244,209 95,042,507 10.1% 9.5% $22.23 $23.15

Class C 21,788,208 21,788,208 4.1% 4.1% $17.57 $19.12

Industrial Warehouse 8,000,329 8,000,329 1.7% 1.7% $7.88 $9.09

Flex/R&D 1,402,696 1,402,696 5.5% 4.0% $10.85 $10.24

Industrial Warehouse 131,834,386 132,767,724 4.0% 4.1% $7.46 $7.50

Flex/R&D 10,145,475 10,228,766 13.0% 7.4% $11.71 $12.42

34,445,258 34,582,819 5.6% 4.6% $14.01 $14.38

164,405,967 165,986,470 4.6% 4.5% $16.48 $17.42

Industrial

Retail

Jefferson County

Metro Denver

Source: CoStar Realty Information, Inc.

Jefferson County

Metro Denver

Jefferson County

Metro Denver

Note: Vacancy rate and average lease rate are for direct space only (excludes sublet space). Industrial, f lex, and retail lease

rates are triple-net; off ice rates are full-service.

Office

Avg Lease Rate

(per sq. ft.)

Jefferson County Commercial Vacancy and Lease Rates by Property Type

Total Existing Square

FootageVacancy Rate

quarterly economic report third quarter 2017 - jeffcoedc · 2017-10-31 · jefferson county...

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