2020 forecast: A look into the future of the Denver area construction market
The economy is strong. Unemployment is at a 50-year low. The gross domestic product has continued to grow slowly and is likely to continue to grow.
In Colorado, we have one of the top five economies in the country. We continue to see strength in our population and job growth within the state, and because of that, the construction market has been strong over the last several years and it’s likely to continue.
Looking at the overall U.S. economy and the Denver-specific economy, the outlook for 2020 seems robust. Here is what Brinkmann Constructors sees as areas of strength in the coming months.
Retail and mixed-use. According to CBRE research, retail sales in the U.S. increased by 3.5% year over year in late 2019, and with low unemployment numbers, people are shopping. The growing e-commerce market is driving a lot of growth in the industrial world, but there are still traditional retail opportunities in areas seeing residential growth.
Mixed-use spaces have become increasingly popular in recent years with the increasing desire for a more well-balanced life. People don’t want to spend their days in the car driving from store to store. They want to live and play in the same place.
Flatiron Marketplace, which we are building in Broomfield, is an example of this type of project. With 406,000 square feet of apartments and retail, this development from Provident Realty Advisors Inc. will give the community a place to live and play. Residents can enjoy a spa, courtyards, a pool, and recreation areas while having retail shops, restaurants and grocery stores within walking distance. It’s the best of both worlds.
Another trend emerging is the development of areas for mixed-use facilities near public transportation. As the public becomes more and more conscious of its carbon footprint and environmental impact, public transit is becoming an increasingly vital part of the infrastructure. Evergreen Development Group’s Nine Mile Corner in Erie is an example of this type of development, called a transit-oriented development. This project, which we are building, will bring multifamily living and retail to an area with easy access to public transportation.
Industrial. The industrial market continues to be strong, on both a national and local level, and we will likely see the demand for new builds – for both big box and flex space – grow with strong demand going into 2021.
Brennan Investment Group’s Colorado Logistics Park under construction in Commerce City is an example of the strong warehouse and distribution market. The project will total 880,000 square feet and comprise seven total facilities. And German manufacturer Kärcher chose Aurora to base its North America headquarters and manufacturing center, bringing a 380,000-sf facility to the area.
Senior living. As Denver matures and the large number of baby boomers age, the need for senior living facilities has grown, and the last few years have seen many senior housing builds in the area. CA Ventures’ Englewood Senior Living is an example of a mixed type senior living facility that includes assisted living and memory care. And Erickson Livings’ Wind Crest Senior Living Community offers options for independent living as well as continuing care.
While we see strong demand for assisted and memory care, we’re seeing more and more demand for independent living both locally and nationally. There is a strong path for continued growth in independent living facilities in 2020.
Office. There is continued strength in the Denver/Colorado market for large corporate relocations and expansions. This means more opportunity for build-to-suit office space as well as some speculative space being developed in select markets. We anticipate a steady flow of office builds in the coming year and into 2021.
The Clinica Family Health office space in Lafayette is an example of the need to combine resources into one facility. We built an integrated medical and dental clinic, administration area, a training center and a live roof all in one building. This build won an Urban Land Institute Influence Award.
Published in the March 4-17, 2020, issue of CREJ.