Why Invest in Denver Commercial Real Estate?


Why You Should Invest in Denver Commercial Real Estate

It is well known that investing is important to building wealth. Additionally, investment in the stock market, bonds and market funds are all satisfactory ways to build wealth. However, investment in real estate is one of the best methods to grow your portfolio and diversify your assets. Investing in real estate also gives you sufficient control, unlike investments in the stock market. Typically, commercial real estate is not affected when the stock market encounters a sudden decline in stock prices. Correspondingly, real estate investments typically protect you from the turbulent nature of this ever-changing, unpredictable market.


Why Should You Invest in Denver?

The Denver commercial real estate market has remained steady throughout COVID-19 and through recent supply shortages. There are many benefits to an investment in commercial real estate, such as a higher return on investment (ROI), frequently in the range of 6%-12%, a steady stream of cash flow and a less saturated market than residential real estate. For example, on average, industrial properties saw a significant ROI of 9.5% (1-year ROI in 2021). Economic experts expect commercial real estate values to show substantial appreciation in 2023.


Denver is a lively and exciting city to invest in! Home to over 3 million people living in the current metro area, this city continues to grow beyond what many envisioned possible. Denver is seeing a massive rise in population and job growth. Denver’s tech industry has experienced enormous growth as we predict that Denver will be the next big hub for tech workers.  With that being said, the Denver commercial real estate market reflects the growth seen in the population and job market. In short, Denver is experiencing an economic BOOM in commercial real estate, which will only continue in the upcoming years. With a massive rise in construction projects, over 4.4 million square feet of commercial real estate space is available (all product types) in the Denver metropolitan area. While the supply is large, it is tempered by continued strong demand. When you invest in commercial real estate, you invest in a geographic area with its own unique market trends and supply and demand features.


Partly as a function of Covid-19, companies/tenants are benefiting from more competitive lease rates. However, the overall commercial real estate fundamentals remain strong for Denver, and more attractive purchase opportunities have arisen, with overall sale prices having moderated some.


The Denver area expects to increase investor demand in the upcoming years, resulting in price growth and investment volume increases in 2022. Both residential and commercial real estate in Colorado will increase slightly as the state is a desirable alternative to larger, more population-dense cities such as New York, Los Angeles, San Francisco and Boston. Within the past decade, Denver has become a destination for corporate organizations to relocate and for small startup companies to expand due partly to the lower prices, diversified economy and highly educated workforce that Denver possesses. Corporate companies such as Wells Fargo, United Airlines and Comcast are all examples of corporate organizations headquartered in the Denver area. The Denver commercial real estate market will only continue to show strength, and it is predicted that commercial real estate asset values will reach 47.1 billion dollars by Q1 of 2023.


How Do I Start Investing in Commercial Real Estate? 

Of course, like any investment, you will need to perform in-depth research to understand the current market and price fluctuations. Commercial real estate can be complex, and it can be even more challenging to understand the market trends that go along with it. This is where Tyler Duncan Realty Partners comes in! We have the tools you need to succeed in finding your perfect Denver commercial real estate property. With 35+ years of experience in the commercial and residential real estate industry, you can trust us in this complex and ever-changing market.