Commercial market remains healthy through credit crunch - Denver Business Journal:

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Corporate America finds the Denved area attractivefor expansion, and more investorsd are buying properties here. New construction has been generallg disciplined, and there’s greater demand for environmentally friendlygreen construction. Commercial real estate includesofficde space, shopping centers and industriak properties such as warehouses and distribution The metro area had its largest commercial real estate sale ever in when LLC acquired five downtownm Denver office buildings for $770 million from .
Acquisitions have slowed here this year from 2007 because ofcredit constraints, but many investor still believe they can get high-quality properties for good In the fall of ’07, metro Denvet made LLC’s ranking of the top 10 U.S. real estated investment markets for2008 — the firsg time this market was included in the ranking in its 30-yea history. “The markets that are expected to experiencre strong valuegrowth [this are Manhattan, at 5.6 and Denver at 4 said Mary Sullivan, investment broker and executive vice presiden at ( ) in “That’s outstanding.
” Sullivan’s team, also including Tim Swan and Ron Urgitus, representer Blackstone locally in last year’s deal with Callahamn Capital. Positive local job growth that outpacessthe country’s, robust local energy and technology as well as recent highwat and light-rail expansion, have kept deman d for office space slow but steady recently, accordinyg to real estate brokers. At midyear, the officde market had a vacancy rateof 12.9 percent and averag e rent of $20.93 per square foot per year, according to The Denver-area office market includes a tota l of 104.
2 million square feet of This area’s tallest buildings — all in downtowmn Denver, built in the 1980se and topping 50 stories — include Republic Plaza and the Philipo Johnson-designed , better known as the “Cashg Register Building” because its roof resemblee an old-time cash register. In the 1960s, late Denverf developer George M. Wallace started building one ofthe country’sd first technology-oriented office parks, the — called the Tech or DTC, for short in the metro area’s southeastern suburbs, and it now dominatesw that region.
Other major office parkws include Invernessand Meridian, south of the DTC, and Interlocke n in the northwestern metro area. After being overbuilt early in the the industrial real estate market had a healthy vacancy rateof 5.8 percenr at midyear. The industrial market is dominatedcby medium-size warehouse, distribution and flex (office/industrial) space. “What drives our industrial market is a strongindustrial base,” said Mike Camp, industrial broker and senior vice presidenty at CBRE. “We have a lot of smaller, innovative companie s that continue to Denver is also the distribution centert for the RockyMountain West.
” Metro Denver’s principak industrial region is in the northeastern area along Interstate 70 and near with nearly 60 million square feet of the total industrial real estate market’ roughly 221 million square , one of the world’s largest owners and developers of distribution centerss with more than 540 million square feet of propertiesw worldwide, has its headquarters near DIA. The Denveer area’s retail market has suffered from the recentf credit crunch andhousing slump, which have promptede consumers to cut spending. Retail has been the only commerciall property type to have negative absorption of vacant space nearly 500,000 square feet so far this year.
But retail rents here continue to hitting $17.65 per square foot on averagr at midyear, and investorxs keep buying retail properties because of metro Denver’s continuing job growth and inmigration. Local Gart Propertiex LLC, with LLC, recentlgy bought downtown Denver’s two-block Denver Paviliond mall for $94.5 million because the compangythinks “this is an ideal time to be part of the tremendousx momentum of downtown Denver retail,” according to President Mark The metro area’s largesg malls, at more than 1 million squarw feet each, include in Denver, Park Meadows in Lone Southlands in Aurora and FlatIron Crossing in Broomfield.