T he last few years have been a bit of a wild ride for all of us. Starting from the pandemic in early 2020, to the wild elec- tion season of late 2020 into 2021, massive bull market of 2021 into 2022, the geopolitical climate with Rus- sia and China, and now into a time of economic uncertainty, fear of recession and the question of what is the best decision to make with investment real estate. Through all these ups and downs, there is one thing that seems to remain constant: Denver is still a top target for investment, with a vibrant economy and continued economic tail winds. Will the party keep going? Let’s take a look at some stats to see what they say. Colorado gained nearly 30,000 peo- ple between July 2020 and July 2021, according to the U.S. Census Bureau. Much of that growth was focused in Denver proper. The metro’s populace expanded by roughly 25,000 individuals in that same span. So, the metro area is still growing as people choose to move here. Denver is expected to add 55,000 jobs in 2022, equating to a 3.6% rate of annual employment growth. The metro’s employment base should end the year roughly 47,000 positions higher than the pre-pandem- ic mark, which was surpassed in Febru- ary. As the local unemployment rate fell below 4% in June, this strong job recovery will support additional reloca- tions and household formation that will lift demand for essential and non- essential goods. So, we have jobs for all the people moving here. Despite all the national and inter- national fears of slowing economic growth, aka the R word, Denver is poised to weather any economic storm coming this way. So how does that affect the office and industrial invest- ment markets? The stats are showing several positives on that front. The office sector obviously was hit by the work-from-home models adopted during the pandemic but is seeing continued improvement. Employment sectors that traditionally use offices collectively created over 10,000 new jobs in the first half of the year and are on track to add 22,000 positions by the end of 2022. Overall, staff counts in this category have grown 9% from the pre-pandemic level, or by about 40,000 jobs. While the share of employees working physically from offices every day is below historical norms, larger staffs help offset the impact to space demand. The population of 20- to 34-year-olds in Denver grew by 1.1% last year, compared to a slight contrac- tion in that cohort nationally due to aging. The influx of younger profes- sionals, who gain advantages from being in the office through mentorship and training, will contribute to many companies’ space needs. The return to the office from the work-from-home INSIDE Corporate HQ design PAGE 10 Employees search for meaningful connection to their work and their work environment Brandon Kramer First vice president, investment, Marcus & Millichap September 2022 PAGE 14 PAGES 21-35 Not just an office MOBs house physician offices and serve more chronically and seriously ill patients Industrial section While industrial real estate market may have peaked, should return to pre-pandemic trends Please see Market, Page 18 Recession fears? Not in Denver’s office, industrial Industrial 2022 Outlook 40 6.8% 4,400,000 CONSTRUCTION: VACANCY: RENT: EMPLOYMENT: +3.9% 2.1% 5.1% $9.45 per sq. ft. of stock will be created will be completed decrease in vacancy in asking rent JOBS 60,000 SQ. FT. BASIS POINT INCREASE Employment Trends Y-O-Y Percent Change United States Metro -8% -4% 0% 4% 8% 22* 21 20 19 18 Supply and Demand Completions/Absorption (Millions) Completions Vacancy Rate Vacancy Rate 0 2 4 6 8 22* 21 20 19 18 4.0% 4.5% 5.0% 5.5% 6.0% Net Absorption