New Survey Pinpoints Denver and Phoenix as Economic Growth Centers

An index appraising office investment opportunities and general economic development conditions in nearly two dozen U.S. cities, has given high marks to both Denver and Phoenix.

Published by Newmark Group, Incorporated, the Newmark Opportunity Index notes that, on a national scale, the country’s industrial market in the last year “fared better than any other sector during the pandemic, with demand and rents for industrial space on the rise, and an uptick in industrial sales volume.”

At the same time, the survey notes that office vacancy rates jumped from 13% in early 2020 to nearly 16%, “resulting in many asset owners offering substantial concessions, thereby reducing effective rents.”

Of Denver, the report accompanying the survey, notes that the city’s “industrial leasing market ranked in the bottom half of the pack with tepid absorption and rising vacancy.”

At the same time, “real estate assets in growing secondary markets like Denver have been attractive to investors, as evidenced by its #3 ranking among capital markets metrics.”

The report additionally posits that “strong prospects for continued economic and population growth will make Denver a continued target for investment dollars, particularly in the multifamily space.”

Overall, the index gave Denver a 12 ranking out of a possible 22 for investment opportunities.

Newmark is more bullish on Phoenix, giving it a 4 ranking, and noting that despite an increase in office vacancies and decline in rents, the city was “one of the areas least impacted by pandemic restrictions,” predicating a “quicker economic recovery.”

Noting that Phoenix is substantially outperforming other Sunbelt markets, Newmark predicts that the city is “likely to continue experiencing economic growth and will remain a target for investors.”

Based in New York, the Newmark Group is regarded as one of the largest commercial real estate advisory firms in the country.

​By Garry Boulard

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