Jun 1, 2017, 6:58 PM
2016 Tech Outlook - Denver
Over the past two years, tech companies have flooded into Denver’s downtown area to take advantage of the ever-increasing concentration of young and talented labor. As a result, more millennials are coming downtown, boosting the value of retail and residential space across the CBD.
Key stats as of Q2 2016
|Average asking rent (per square foot)||$26.28|
|12-month rent growth||+7.8%|
|Employee cost (average wage 2015)||$105,830|
|% of population with bachelor's degree or higher||40.8%|
|Share of Millennials||22.3%|
|Change in tech employment YoY||+6.6%|
|VC funding (Q3 2015 - Q2 2016)||$305.8M|
|Average monthly apartment rent||$1,305|
|Urban core premium||+18.9%|
Where there's opportunity
Top talent: Skilled tech workers continue to join Denver’s labor pool, giving tech companies a strong supply of talent. Most of that labor is staying downtown, so companies are responding by moving operations to the CBD. In 2015 alone, 54,370 tech-related jobs were created.
Affordability in high rises: Despite space in Lower Downtown (LoDo) and the River North Art District (RiNo) going for top dollar, value remains in Midtown CBD and Uptown high rises—especially in the form of available oil-and-gas sublease options.
Retail and residential take off: The “millennial effect” has brought more people to the core in the search for jobs. In response, more restaurants, shops, bars and residential buildings are popping up—giving employees the live-work-play environment they demand.
Where there are challenges
Property taxes increase: As taxes rise, net operating income for owners is down. Many are now are increasing office rental rates as a result in order to account for lost income.
Elevated buildout costs: Transforming cube farms into the preferred open layout most tech companies want is becoming increasingly costly.
Want more? Download the complete 2016 Denver Technology Office Outlook.
See how other markets stack up in the 2016 Tech Outlook:
Or check out the full national 2016 Tech Outlook.
Researcher: Mandy Seyfried | Editor: Michael Cronin