Colorado’s statewide reassessment in 2017 lead to double-digit value increases in the Metro Denver area. Even though mill levies have decreased, resulting property taxes will still be more expensive for 2018.
Market trends show continued growth in Denver's commercial real estate, which will likely result in higher values for years to come.
Metro Denver's apartment market continues to perform very well despite record levels of new construction. A total of 29,728 units were under construction during the third quarter of 2017 with more than 6,700 located in the Central Business District, according to Colliers International.
Multi-family vacancy rates have held stable the past several years in the four-to-six percent range.
Denver's overall average apartment rental rate hit a new high of $1,423 per unit, an increase of 4.7 percent from the previous year. While owners are stepping up concessions in the downtown luxury apartment market, the net rents achieved in these properties are still very strong.
Investment activity in the Metro Denver retail sector totaled approximately $325 million during the third quarter. This brings the year-to-date total to more than $600 million.
Average asking rates surpassed an average of $17 per square foot mark for all types of stores. Retail vacancies were a mixed bag depending on the category. See table below.
Office leasing activity in Metro Denver slowed during 2017. However, demand for new office product is apparent as nearly half of the 4.6 million square feet under construction was already spoken for at the end of the third quarter.
Most tenants looking for new offices have their sights set on Denver's primary submarkets such as downtown and the Southeast. Projects outside of these areas, like Colorado Center III are still sitting vacant. The overall office vacancy rate appears to be stabilizing just above the 12 percent mark.
Rents continue to increase, albeit at a more moderate pace compared to previous years. The average asking office rent was $26.68 in the third quarter, a 3.6 percent increase year-over-year.
Denver's real estate market is fueled by the area's natural beauty and economic strength. The Mile High City has won many accolades, including:
It's easy to see that Metro Denver is positioned for sustained growth. With it, will come higher real estate values and higher tax bills.
Appeals are the best way to hold the line on increasing property taxes.
A prior year appeal opportunity is still available for 2017 property tax assessments. It must be filed no later than January 2, 2019.