State of Downtown Denver 2018 Table of Contents 01 Key Facts 02 Year in Review 05 Rankings 12 Mobility 06 Development 14 Residents 08 Office Market 16 Retail 10 Talent 18 Public Space 20 Tourism 22 Benchmarking Produced by the Downtown Denver Partnership, a non-profit business organization dedicated to building an economically powerful center city. downtowndenver.com Highlights 2018 State of Downtown Denver 39.3% of downtown downtown residential 74% increase in tech employees commute population has tripled employment since by transit since 2000 2010 “With the abundance of talent in Denver, we know it’s a perfect fit.” – James Quarles, 133,500 downtown $2.3 billion of investment CEO, Strava employees, an all through developments in time high the pipeline 265 68% of downtown residents tech startups formed 3.3% retail have a bachelor’s degree over the past three vacancy rate in or higher years Downtown Denver 79% average hotel 45,000 college 4,525 residential occupancy in Downtown students in Downtown units in the Denver Denver pipeline 1 Produced by the Downtown Denver Partnership Year in Review Downtown Denver enjoyed a record-setting year in 2017. This growth and prosperity is driven by the Downtown Denver Partnership’s vision and strategy to build an economically powerful center city. Record-Setting Year The rise of Downtown Denver continued throughout 2017 and the first half of 2018, establishing record highs for employment, residents, hotel occupancy, and tech startup formation. City builders throughout Denver have supported investments that are providing an extraordinary return—investments in strategic planning, transit, arts and culture, technology, infrastructure, parks and recreation, conventions and visitors have all created an environment that has propelled our economically powerful center city forward. Highlights from the 2018 State of Downtown Report include: + Downtown’s residential population has tripled since 2000, with nearly 23,000 people now living downtown. + Employment downtown reached a record-high of 133,478 people, which is up 2.5% from last year. + Over $1.35 billion in new development was completed in 2017 and early 2018, with another $2.26 billion under construction or planned. + Retail downtown experienced a solid growth year, with retail sales tax collections up 6.4% year-over-year. + Hotel performance is achieving modern day records with an average 79% occupancy rate and $186 average daily room rate for downtown hotels in 2017. + Technology employment is up 74% since 2010 with 626 technology businesses located in Downtown Denver. 2 2007 Downtown Area Plan > Mid-Point Reflection The 2007 Downtown Area Plan set forth a 20-year vision to make Downtown Denver one of the most livable places in the world. Ten years into the plan, the next generation of downtown leaders are marking its mid-point with a determination to keep the plan relevant with focused energy for the next ten years. To achieve a vibrant, economically healthy, growing and vital downtown, Denver is showing a sustained effort in each of the plan vision elements, Prosperous, Walkable, Diverse, Distinctive, and Green. This continued effort reflects downtown’s commitment to planning with a purpose, building our center city, and making meaningful impact. 38TH ST 38TH AVE BOUNDARY E 37TH AVE E 36TH LEGEND: ST MARION E 35TH AVE LAFAYETTE ST LAFAYETTE City of BRIGHTON BLVD E 34TH E BRUCE ZUNI ST Cuernavaca PECOS ST PECOS Park HIGH ST VINE ST GILPIN ST RINO RACE ST HIGHLAND 30TH ST FRANKLIN ST BLAKE ST E 31ST AVE LAFAYETTE ST LAFAYETTE CURTIS PARK/ E 30TH AVE ST GILPIN 2 WILLIAMS ST 0 E 29TH AVE N T FIVE POINTS SP H E ST MARION ER PLATTE ST CENTRAL VINE ST 25 PLATTE VALLEY CHAMPA ST CommonsPark HUMBOLDT ST HUMBOLDT HIGH ST HIGH JEFFERSON BALLPARK PARK AVE S P DENVER E 25TH AVE E UNION PARK E R STATION CENTER CITY E 24TH AVE CentennialGardens 16TH STLODO MALL Jefferson NEIGHBORHOOD Park VINE ST GILPIN ST RACE ST RACE BOUNDARY WILLIAMS ST Gates ST DOWNING Crescent ST LINCOLN 20TH AVE Park E 20TH AVE FEDERAL BLVD FRANKLIN ST FRANKLIN E 19TH RACE RACE ST CENTRAL E 18TH AVE AURARIA BUSINESS UPTOWN Civic VINE ST Center DISTRICT ST HUMBOLDT Park GILPIN ST E 16TH W COLFAX AVE ST WILLIAMS W COLFAX AVE HIGH ST Civic Center Park E 14TH AVE E 13TH AVE ST RACE DOWNTOWN Rude GOLDEN B Park E SPEER BLVD GRANT ST GRANT R VINE ST O DENVER Lincoln TRIANGLE ST HUMBOLDT Park A D CAPITOL BOUNDARY W LA ALMA/ W A E 11TH AVE HILL LINCOLN PARK Y SUN VALLEY SANTA FE DR FE SANTA All data in this report uses ST VINE W 8TH AVE E 8TH AVE the Downtown Denver HUMBOLDT ST HUMBOLDT RACE ST RACE A I GILPIN ST GAYLORD ST GAYLORD boundary, unless L L I E 6TH AVE FRANKLIN ST otherwise noted. W 3 HIGH ST E 6TH AVE Produced by the Downtown Denver Partnership > 4 Photo Credit: Keri Geha Rankings Highest increase in Top metro for small skilled labor business employment 1 - JLL, 2018 1 - Paychex, 2018 1. Denver, CO 1. Denver, CO 2. Washington, D.C. 2. Seattle, WA 3. Philadelphia, PA 3. Houston, TX 4. Boston, MA 4. Dallas, TX 5. Portland, OR 5. Riverside, CA Third best place to Third fastest growing live in the U.S. large city 3 - US News and World Report, 2018 3 - WalletHub, 2018 1. Austin, TX 1. Austin, TX 2. Colorado Springs, CO 2. Charlotte, NC 3. Denver, CO 3. Denver, CO 4. Des Moines, IA 4. Seattle, WA 5. Fayetteville, AR 5. Nashville, TN Fourth best place for Fourth best city for business and careers working women 4 - Forbes, 2017 4 - MagnifyMoney, 2018 1. Portland, OR 1. Washington, D.C. 2. Raleigh, NC 2. Minneapolis, MN 3. Seattle, WA 3. Sacramento, CA 4. Denver, CO 4. Denver, CO 5. Des Moines, IA 5. San Francisco, CA Fourth most exciting food Fifth best economy city in America among large US cities 4 - Zagat, 2018 5 - Business Insider, 2018 1. Los Angeles, CA 1. San Jose, CA 2. Austin, TX 2. San Francisco, CA 3. Chicago, IL 3. Austin, TX 4. Denver, CO 4. Seattle, WA 5. Seattle, WA 5. Denver, CO 5 Produced by the Downtown Denver Partnership Development With record setting numbers of downtown jobs, residents, and visitors, developers are finding downtown a prime location for new investment, with $2.3 billion of projects in the pipeline. + In 2017 and early 2018, 17 projects were completed in Downtown Denver, totaling $1,352,880,000 in investment and adding 1,711 residential units, 1,141 hotel rooms, and 1.1 million square feet of office. + As of mid-2018, there are 27 projects under construction and 8 planned for development in Downtown Denver, totaling $2,260,160,000 of investment and adding 4,525 residential units, 772 hotel rooms, and 2.7 million square feet of office to Downtown Denver. + The largest office project completed in the past year was Hines’ 1144 Fifteenth Street, a 40-story, 670,000 square foot, spec office tower that was nearly fully leased at opening in spring 2018. + The largest residential project completed in the past year was Holland Partner Group’s Union, adding 579 apartments adjacent to Denver Union Station and anchored by a flagship Whole Foods Market. + The largest hotel project completed in the past year was White Lodging’s Le Meridien/AC Hotel, featuring 495 new hotel rooms, 12,000 square feet of meeting and event space, and an outdoor rooftop bar. $4.3$4.4 Billion Invested Over 5 Years $1.5B $975M $742M $280M $940M 2014 2015 2016 2017 2018 (projected) Denver continues to see strong demand from capital investors “ nationally and now globally. We see this demand continuing and look forward to Denver’s continued rise as a destination for investment capital. 6 – Mark Katz Photo Credit: Ryan Dravitz Senior Managing Director, HFF > Building for Growth 52 projects completed in 2017 & 2018, under construction, or planned Residential Office Hotel Units Added SF Added Rooms Added 6,236 3,807,514 1,913 Leads to Leads to Leads to capacity for capacity for capacity for 7,700 13,400 680,000 NEW DOWNTOWN NEW DOWNTOWN NEW DOWNTOWN RESIDENTS EMPLOYEES VISITOR NIGHTS (Estimated) (Estimated) (Estimated, annual) 7 Photo Credit: Ryan Dravitz Produced by the Downtown Denver Partnership Office Market A downtown office location provides exceptional access to our regional talent pool and mobility options, driving 2.5% employment growth year- over-year and attracting a steady stream of business expansions. + Employment in Downtown Denver is at an all-time high of 133,478, a 2.5% year-over-year increase, compared to 1.9% year-over-year increase metro-wide and a 1.2% increase nationwide. + Downtown Denver has a total of 38,000,000 square feet of office space, up over 2% year-over-year. + While vacancy rates have increased slightly over the past few years to 11.4%, average lease rates have held steady at around $33/sf. + Downtown’s largest sectors are Professional/Business Services (31% of total employment), Government (19%), Leisure/Hospitality (16%), Financial Activities (12%), and Natural Resources/Construction (7%). Largest Downtown Denver Employers* • Accenture • Comcast • Hyatt Regency Hotel • TIAA • Wells Fargo • ALPS Fund Services • DaVita HealthCare at the Colorado • Transamerica • Xcel Energy • Anadarko Petroleum Partners Convention Center Investments & • Anthem Blue Cross • Deloitte LLP • KPMG LLP Retirement *list includes Blue Shield • Encana • Mortenson Company • US Bank private, for-profit • CenturyLink • Gates Corporation • Sheraton • Vertafore employers only Downtown Denver OfficeOffice MarketMarket TrendsTrends TotalTotal DowntownDowntown Employment Employment Direct Vacancy Rates Direct Average Lease Rates (Per Square Foot) 135K 16% $35 130K 125K $30 120K 115K 11% 110K $25 105K 100K 6% $20 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 15 15 15 15 16 16 16 16 17 17 17 17 - - - - - - - - - - - - 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Denver is geographically central to our business and will be a great location for our new headquarters and employees, offering a high quality of life, “ affordability, and access to premium cultural and recreational activities.