Denver turning into hot CRE market

Denver is a hot market for commercial real estate.

For many of the nation's commercial real estate experts, Denver is no longer a secondary market.

As the city continues to accumulate a rush of younger residents, multifamily housing and office developers are looking to Denver as the next big thing. Steve Ferris, Denver's development services director, told Bloomberg that office developers have been keeping an eye on the area with hopes to create an urban center to benefit from Denver's robust employment growth. Ferris said the city has "started to compete very well against other higher-tier cities."

Denver equaled Seattle for the third-largest climb in 25- to 34-year-old residents from 2008 to 2012, according to data from the Census Bureau. Denver notched a 9.1 percent increase during that span, putting the city behind only Washington, D.C., with a 12 percent gain, and Baltimore, which posted a 9.6 percent surge. New York and Los Angeles, two markets Denver is now drawing young residents away from, had two of the smallest population increases for that age group over that span.

"What's working for Denver is that it's less expensive than San Francisco and New York, but that at the same time it has a growing and diverse industry – mutual funds, natural gas, technology," Christopher Frampton, a partner at Avon, told Bloomberg. "Denver now has a vibrant downtown. It never used to. So now you have a true mix of city and sky."

Denver, one of the top 25 most-populated cities in the country, is known for its outdoor activities. That draw, along with an improved job market, has made it easier for the city to appeal to young families looking for a less expensive option outside the more expensive cities on the nation's coasts.

"We wanted green and outdoor space but we don't want to live in the suburbs," Lyndsey Lodha, 34, told Bloomberg. "Denver has both. Lots of open spaces, great school options and a very vibrant city life. And it's affordable."

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