James Real Estate RE Mkt Cond Dnvr 2000 4th Qtr Page 17
JAMES REAL ESTATE SERVICES, INC.
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The National Real Estate Index (NREI) provides the following data:
NREI OFFICE DATA
Average Sale Price/SF
Average Rent/SF (Gross)
Average Cap Rate
Time Period
Denver
Western
Region
Denver
Western
Region
Denver
Western
Region
2
nd
Q 2000
$170.20
$181.4
$25.42
$25.23
8.25%
8.4%
1
st
Q 2000
$150.51
$168.96
$25.23
$27.25
9.25%
8.85%
1
st
-4
th
Q 1998
$143.12
$163.07
$24.55
$26.40
9.3%
8.8%
1
st
-4
th
Q 1998
140.75
153.68*
22.73
24.98*
9.1%
8.9%*
1
st
-4
th
Q 1997
118.10
127.19
20.61
22.31
9.4%
9.2%
1
st
-4
th
Q 1996
117.99
121.38
19.38
20.47
8.8%
9.0%
1
st
-4
th
Q 1995
103.50
122.65
16.43
19.20
8.5%
8.6%
1
st
-4
th
Q 1994
99.16
119.67
15.79
18.66
8.8%
8.8%
1
st
-4
th
Q 1993
90.09
106.04
14.02
16.52
8.6%
8.7%
1
st
-4
th
Q 1992
80.24
111.12
13.85
17.30
9.7%
9.2%
1
st
-4
th
Q 1991
78.65
114.66
13.89
17.36
9.9%
9.2%
1
st
-4
th
Q 1990
73.06
116.69
13.44
18.05
10.3%
9.2%
1
st
-4
th
Q 1989
73.56
114.96
13.26
16.91
10.6%
9.4%
Source: National Real Estate Index/James Real Estate Services, Inc.
*2
nd
4
th
Quarters only
The following are average year-end office rents (gross) for metro Denver by class, as compiled
by the Frederick Ross Co.:
MEDIAN OFFICE RENTS (GROSS)
Year
Class A
Class B
Class C
2000 $23.75 $19.25 $16.50
1999 21.00 17.50 14.00
1998 19.71 15.93 12.64
1997 18.20 14.32 11.79
1996 17.00 14.50 11.25
1995 16.00 14.00 11.00
1994 16.00 13.00 10.50
1993 13.50 11.00
8.80
1992 13.00 10.50
8.80
1991 12.50 10.20
8.50
1990 12.25 10.00
8.00
1989 11.50 9.50
8.00
1988 10.50 9.00
8.25
Source: Frederick Ross Co. James Real Estate
With all three classes showing rent growth, low-end rates for Class B and C properties have
recently increased most. The importance of this occurrence is that activity at the low end helps prevent
the local real estate market from growing too fast and rates getting prohibitively high. The Class A
market reported a vacany rate of 7.2%. The second half of 2000 is critical for the Class A market as
new construction is to come on line. Approximately 50% of the space has been preleased. The Class B
market reports a lower vacancy rate of 7.62% down from 7.90% at year end 1999. The largest amount
of space to come on line in this sector was the redeveloped Catholic Archdiocese Building in Cherry
