James Real Estate RE Mkt Cond Dnvr 2000 4th Qtr Page 22
JAMES REAL ESTATE SERVICES, INC.
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Since 1995 approximately 38 hotels with more than 4,200 guest rooms have been added to the
Denver metro area market. It is projected that fewer than 800 rooms will be added to the market in
2001 due in part to softening in the market as a result of office and industrial space coming on line.
Rental rates increased 22.5% between 1995 and 1998, the largest growth of the market and rates have
increased another 3.2% since the beginning of the year. The market achieved an occupancy rate of
69.9% during the same period. This is an increase of 2.1% over the same period in 1999.
The majority of the growth occurred in the southeast and DIA sectors. Although there was a
large amount of growth over the past several years, there are sectors that have not been fully developed.
The E-470 corridor has not begun a large amount of development. The Boulder Turnpike corridor has
had five new hotels opened recently and developers are waiting to see the supply and demand in this
sector. The Downtown sector is considered to be the strongest hotel sector in the market. With no more
room to expand the sector, the Cherry Creek, midtown and Stapleton sectors are expected to absorb the
overflow.
Demand for hotels in the market continues to remain strong. As office development continues
in markets such as the Boulder Turnpike, Highlands Ranch, E-470 and C-470, the need for hotels
continues to increase. Developers are in a "holding pattern" to evaluate the supply and demand in these
areas of the market.
