FORT COLLINS Q2 2020 - uniqueprop.com · 7/28/2020 · MARKET REPORT OFFICE Q2 2020 ......

FORT COLLINS

MARKET REPORTOFFICE

Q2 2020

303.321.5888 UNIQUEPROP.COM

FULL-SERVICE COMMERCIAL REAL ESTATE SOLUTIONSPrivately-Owned and Operated for Over 40 Years

OFFICE MARKET REPORT

Market Key Statistics 2

Leasing 3

Rent 8

Construction 10

Under Construction Properties 11

Sales 12

Sales Past 12 Months 13

Economy 15

Market Submarkets 18

Supply & Demand Trends 20

Rent & Vacancy 22

Sale Trends 24

Fort Collins Office

7/28/2020Copyrighted report licensed to Unique Properties, Inc. - 1130503

OverviewFort Collins Office

15.6 K (225 K) 6.0% 1.9%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth

As Colorado slowly reopens its economy, all eyes will beon the reclamation of jobs this quarter to determine theshape of the recovery. The recent national Mayemployment data surprised to the upside, and couldbode well for the Denver, which outperformed thenational benchmark in April.

Initial unemployment claims in Colorado have climbedpast 550,000 since mid-March as the pandemic haswrought economic damage across job sectors,specifically in retail, leisure and hospitality, and energy.But the latest weekly jobless claims suggest the worst isin the rearview mirror. In the week ending on June 6, justunder 13,000 initial claims were filed for the secondstraight week. Continuing jobless claims as of May 23were at about 245,000, down from over 265,000 in theprior week.

Fiscal and monetary stimulus was quickly enacted toprovide a bridge for those impacted by the crisis, at leastin the short-term. The Governor's stay-at-home ordersexpired on April 26, although the counties of Denver,Broomfield, Adams, Arapahoe, and Jefferson extendedshelter-in-place orders through May 8.

Local officials are in agreement that the economy will bereopened in phases and social distancing policies willremain in place. The Governor has stated that all retailestablishments will be allowed to offer curbside delivery

starting on April 27, and certain businesses will be ableto open on May 1 with some restrictions. On May 4,large workplaces were allowed to open at 50 percent ofcapacity, and are recommended to screen workersbefore they enter the workplace.

We will be updating our analysis frequently as moreinformation becomes available. The current report largelyreflects the environment before the pandemic.

Fort Collins has a dynamic office market fueled byColorado State University. The school is the metro'slargest employer, and also serves as an incubator forlocal tech firms, feeding them talented graduates withhands-on experience. Several prominent companieshave established a presence here, including Hewlett-Packard and Intel.

Despite an uptick in development in recent years,vacancies are exceptionally tight. At the same time, rentgains remain modest with supply pressure likely playinga role. Nevertheless, the vacancy and availability rateswere near cyclical lows entering 2020.

With the lack of institutional-grade product in the market,outsized deals are rare, although one of the biggestbuildings in the metro recently sold. Investors continuedto make plays for mid-tier product in 2019, with morethan 5% of inventory trading on the year.

KEY INDICATORS

Market RentVacancy RateRBACurrent Quarter Availability RateNet Absorption

SFDeliveries SF

UnderConstruction

$34.114.8%1,074,5874 & 5 Star 9.2% 0 0 68,850

$23.306.7%6,909,4183 Star 8.4% 15,016 0 26,193

$19.405.1%3,743,6131 & 2 Star 7.1% (10,757) 0 0

$23.116.0%11,727,618Market 8.1% 4,259 0 95,043

ForecastAverage

HistoricalAverage

12 MonthAnnual Trends Peak When Trough When

5.9%7.8%2.0%Vacancy Change (YOY) 12.1% 2009 Q4 3.7% 2018 Q4

48,742197,239(225 K)Net Absorption SF 570,526 2005 Q2 (235,685) 2020 Q2

65,266216,47515.6 KDeliveries SF 562,695 2005 Q3 0 2013 Q4

0.4%0.8%1.9%Rent Growth 7.8% 2014 Q2 -6.7% 2009 Q3

N/A$49.8M$69.6 MSales Volume $119.8M 2015 Q4 $0 2003 Q3


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LeasingFort Collins Office

The lights are beginning to turn on in the office market.With large workplaces allowed to open at 50 percent ofcapacity as of May 4, many office workers will return toan environment conducive to social distancing practices.However, many will also continue to work from home inthe coming months, giving tenants and landlords moretime to ponder the long term viability of a remoteworkforce.

Fort Collins is a well-educated metro boosted by thepresence of Colorado State University (CSU), the largestemployer in the market with more than 7,000 employees.The university feeds the local office employers with asteady stream of intellectual capital, helping to supportoffice demand and employment growth. In fact,employment growth in Fort Collins has outpaced thenational average every year of the recovery until 2019.

Tech firms have taken advantage of partnerships withCSU and their research facilities, incubating an employeebase already experienced in innovation and laboratorywork. Intel, Hewlett-Packard and Agilent Technologiesare among the metro's biggest tenants, although Hewlett-Packard has noticeably downsized this cycle.

Several years ago, Comcast moved into one of Hewlett-Packard's former buildings at 3420 E Harmony Rd aftercompleting $10 million of renovations. However, Comcastvacated their 82,000 SF space in January 2020 andstarted marketing it for sublease at the end of 19Q3. The

telecommunications company's decision will affect 237workers, although many will be offered other positionswithin the company. The move-out has put upwardpressure on vacancies to start the new year, but FortCollins' vacancy rate still remains below its long termaverage.

The biggest lease of 2019 was Prosci Inc.'s 43,000 SFspace at 2950 E Harmony Rd. The global changemanagement firm's expansion comes after it outgrew its20,000 SF space at 5042 Technology Parkway. Prosciwill still retain this space, but its 2950 E Harmony Rdlocation will serve as its new headquarters.

In one of the biggest wins for Fort Collins this cycle(especially considering Hewlett Packard's downsizing),marketing tech firm Madwire recently moved into 106,000SF at 3405 S Timberline Road. The building will serve asits headquarters and underwent a significant renovationfollowing Madwire's signing. The space hadbeen entirelyvacant and available for about two years prior to thelease. Madwire is one of the biggest private employers inthe metro with more than 500 workers.

Another tech firm, Columbus, OH-based Vertiv, aprovider of equipment and services for data centers,moved into nearly 6,500 SF at 1300 Riverside Ave afterleasing 19,000 SF at the Hahns Peak Two building inCenterra.


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NET ABSORPTION, NET DELIVERIES & VACANCY

VACANCY RATE


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AVAILABILITY RATE


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12 MONTH NET ABSORPTION SF IN SELECTED BUILDINGS

3rd QtrBuilding Name/Address Submarket Bldg SF Vacant SF

1st Qtr 2nd Qtr 4th Qtr 12 Month

Net Absorption SF

Fort Collins/Loveland 25,000 0 25,000 0 0 0 25,0002543 Business Park

Fort Collins/Loveland 58,111 0 0 0 0 0 15,833Rangeview

Fort Collins/Loveland 36,450 26,648 0 9,802 0 0 9,802Collinsbrook Bldg

Fort Collins/Loveland 31,926 1,573 941 (1,573) 0 0 7,189Everitt Plaza

Fort Collins/Loveland 37,226 4,046 0 0 0 0 6,408Colorado Newspaper Building

Fort Collins/Loveland 6,570 0 0 0 4,919 0 6,398Arena Office Park

Fort Collins/Loveland 12,807 1,663 0 (1,663) 0 0 6,199Traynor Office Park

Fort Collins/Loveland 6,092 0 0 6,092 0 0 6,0924750 Larimer Pky

Fort Collins/Loveland 15,360 0 0 0 0 0 5,328Clocktower Bldg

Fort Collins/Loveland 15,114 0 1,254 0 0 0 5,126Poudre Valley Plaza

Outlying Larimer Cou… 27,756 6,500 4,312 0 0 0 4,312Home State Bank Building

Fort Collins/Loveland 8,794 0 0 0 0 0 4,136808 W Eisenhower Blvd

Fort Collins/Loveland 4,083 0 4,083 0 0 0 4,083451 N Railroad Ave

Fort Collins/Loveland 18,188 0 0 0 0 0 4,031California Plaza

Fort Collins/Loveland 3,928 0 0 3,928 0 0 3,9282524 E Vine Drive

Fort Collins/Loveland 20,000 0 0 0 0 0 3,869Rialto Theater Center

Fort Collins/Loveland 6,086 1,944 1,944 0 0 0 3,413750 14th St SW

333,491 42,374 37,534 16,586 4,919 0 121,147Subtotal Primary Competitors

11,394,127 661,522 (152,578) (144,109) (660) 0 (346,470)Remaining Fort Collins Market

11,727,618 703,896 (115,044) (127,523) 4,259 0 (225,323)Total Fort Collins Market


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TOP OFFICE LEASES PAST 12 MONTHS

Building Name/Address Submarket Leased SF Tenant Name Tenant Rep Compa… Leasing Rep CompanyQtr

Johnstown Plaza Fort Collins 87,000 Home Furnishings - Carson Development, I…Q3 19

3420 E Harmony Rd Fort Collins/Loveland 31,000 ASRC Federal Holding Co… CBRE Cushman & WakefieldQ2 20

Harmony Technology Park Fort Collins/Loveland 20,236 Joy Organics Cushman & Wakefield CBREQ4 19

Rangeview Fort Collins/Loveland 15,833 - - Cushman & WakefieldQ4 19

Johnstown Plaza Fort Collins 14,200 Rod Works - Carson Development, I…Q2 20

3101-3121 Kintzley Ct Fort Collins 11,837 Anfeald - -Q4 19

Collinsbrook Bldg Fort Collins/Loveland 9,802 - CBRE CBREQ1 20

3420 E Harmony Rd Fort Collins/Loveland 8,840 - Cushman & Wakefield CBREQ3 19

Centerra Fort Collins/Loveland 8,506 - - CBRE;McWhinneyQ3 19

4036 S Shields St Fort Collins/Loveland 8,000 Calvary Fellowship of Fort… - Cushman & WakefieldQ3 20

Horsetooth East Business Park * Fort Collins/Loveland 7,648 Telesto Solutions, Inc - CBREQ3 19

Centerra Fort Collins/Loveland 7,548 Aspen View Homes CBRE Cushman & Wakefield;…Q2 20

East Drake Terrace Fort Collins/Loveland 7,256 Veterinary Inc. - RE/MAX Commercial A…Q3 19

Colorado Newspaper Building Fort Collins/Loveland 6,408 - Cresa Cushman & WakefieldQ4 19

Legacy Plaza * Fort Collins/Loveland 6,104 Adult Parole Supervision… JLL Cushman & Wakefield;…Q2 20

4812 McMurry Ave Fort Collins/Loveland 6,019 - - Waypoint Real Estate,…Q1 20

400 E Horsetooth Rd Fort Collins/Loveland 5,759 Foundations Counseling,… CBRE Cushman & WakefieldQ4 19

3420 E Harmony Rd Fort Collins/Loveland 5,375 Novus Ag LC Real Estate Grou… CBREQ4 19

Precision Drive Business Park * Fort Collins/Loveland 5,236 Antea Group Savills McWhinneyQ2 20

Centerra Fort Collins/Loveland 5,112 Advance HOA Property M… CBRE CBRE;McWhinneyQ2 20

428-450 Cleveland Ave Fort Collins 4,846 Radial Development Grou… Realtec Loveland LC Real Estate Group…Q4 19

The Square Fort Collins/Loveland 4,730 Windermere Fort Collins,… Windermere Real Es… Cushman & WakefieldQ1 20

Horsetooth East Business Park Fort Collins/Loveland 4,669 Automation-X Corporation Cushman & Wakefield CBREQ4 19

3491 E Harmony Rd Fort Collins/Loveland 4,438 - RE/MAX Traditions,… Cushman & WakefieldQ2 20

Key Bank Tower Fort Collins/Loveland 4,434 Revel Resources, LLC - -Q1 20

Continental Plaza Fort Collins/Loveland 4,418 Palmer Properties - Cushman & Wakefield;…Q3 19

Home State Bank Building Outlying Larimer County 4,312 - - JLLQ1 20

750 14th St SW Fort Collins/Loveland 4,142 Telesto Solutions, Inc. - NAI AffinityQ3 19

Poudre Valley Plaza Fort Collins/Loveland 4,129 SWCA, Incorporated Realtec Loveland Cushman & WakefieldQ4 19

Preston Center Office Prk Fort Collins/Loveland 3,978 Foundations Counseling CBRE CBREQ4 19

5110 Granite St Fort Collins/Loveland 3,844 Endeavor Exteriors, LLC Zakhem Real Estate… LC Real Estate Group…Q1 20

320 Cleveland Ave Fort Collins/Loveland 3,387 Level Engineering, LLC - Cushman & WakefieldQ4 19

Continental Plaza * Fort Collins/Loveland 3,359 - Avison Young Cushman & Wakefield;…Q3 19

1661 N Estrella Ave Fort Collins/Loveland 3,349 Heart Center Counseling CBRE LC Real Estate Group…Q2 20

Arena Office Park Fort Collins/Loveland 3,148 Endeavor Business Soluti… CBRE Commercial Real Estat…Q1 20

Everitt Plaza Fort Collins/Loveland 3,071 Regents of the University… Commercial Real Es… Cushman & Wakefield;…Q4 19

Poudre Valley Plaza Fort Collins 3,018 GOAL Academy Waypoint Real Estat… Cushman & WakefieldQ1 20

401 Linden Center Dr Fort Collins/Loveland 3,000 Jennifer M Kelly - -Q1 20

Monroe Station Condos Fort Collins/Loveland 2,952 On Trac, Inc Cushman & Wakefield -Q2 20

Oakridge Business Park Fort Collins/Loveland 2,803 Kadiant, LLC - Cushman & Wakefield;…Q3 19

Renewal


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RentFort Collins Office

Tight vacancies and healthy demand drove robust rentgrowth in the past decade, pushing rents north byroughly 30%. Rent growth has moderated in recentquarters as speculative development has ramped up,although fundamentals remain in excellent shape. Thisfollows similar slowdowns in both the Boulder andDenver metros.

Rents at recent or upcoming speculative projects varydepending on the location within the metro. Two recent

projects in the 5,000 to 10,000 SF range in Loveland (onEisenhower Blvd alongside Lake Loveland) listed spacefor $23 to $25/SF triple-net. An 8,000 SF speculativebuilding was recently asking $17/SF NNN.

Space at the North Building of The Exchangedevelopment in Downtown Fort Collins is running fromabout $23 to $25/SF NNN for spaces with street or plazafrontage, and about $19/SF for those without.

MARKET RENT GROWTH (YOY)


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RentFort Collins Office

MARKET RENT PER SQUARE FEET

4 & 5 STAR EXPENSES PER SF (ANNUAL)

Utilities Cleaning InsuranceMarket / Cluster Taxes Other Total

Fort Collins $1.01 $0.16$0.48 $6.11 $5.11 $12.87

Fort Collins/Loveland $1.01 $0.16$0.48 $6.40 $5.12 $13.17

Outlying Larimer County $0.97 $0.15$0.46 $1.44 $4.96 $7.98

Expenses are estimated using NCREIF, Trepp, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.

3 STAR EXPENSES PER SF (ANNUAL)


Fort Collins $0.82 $0.11$0.43 $4.71 $2.68 $8.75




1 & 2 STAR EXPENSES PER SF (ANNUAL)


Fort Collins $0.53 $0.11$0.40 $3.96 $2.05 $7.05





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ConstructionFort Collins Office

The Colorado Governor's stay-at-home orderconsidered jobs in the construction industry as essential,which allowed developers to move forward with projectsif they chose to do so. Deteriorating economic conditionscould keep upcoming groundbreakings on hold, andspeculative projects slated to deliver in 2020 mustgrapple with the uncertainty of demand.

Builders were fairly active in the past decade, but theprevious cycle saw far more development. Several yearshad more than 1% of inventory growth, with build-to-suit

projects comprising the majority of new space. Forexample, the biggest delivery this cycle, the RangeviewFive building in Loveland, was built for Agrium AdvancedTechnologies. It's the only property built to this point ofthe cycle larger than 100,000 SF.

Development continues to generally consist of smallerprojects, a handful of them speculative. The largestproject underway at the start of 2020 was a 69,000square-foot medical office building at 221 E MountainAve.

DELIVERIES & DEMOLITIONS

SUBMARKET CONSTRUCTION

Average Building Size

RankUnder Constr

Under Construction Inventory

All ExistingSF (000) Pre-Leased SF (000)SubmarketNo. RankBldgs Pre-Leased %

1 Fort Collins/Loveland 2 95 47,52243.6% 1 11,92441 1

2 Outlying Larimer County 0 - -- - 7,333- -

Totals 2 95 47,52243.6% 11,64641


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Under Construction PropertiesFort Collins Office

2 95,043 0.8% 43.6%Properties Square Feet Percent of Inventory Preleased

UNDER CONSTRUCTION PROPERTIES

UNDER CONSTRUCTION

Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner

Aug 2019221 E Mountain Ave

68,850 4 Oct 2020Neenan Archistruction

Elevations Credit Union1

Feb 20203491 E Harmony Rd

26,193 2 Oct 2020-

Constance Marla Dohn2


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SalesFort Collins Office

Investment activity has slowed dramatically in the nearterm as the financial impact of the coronavirus isassessed.

The metro does not have a large institutional gradestock. There are only five non-government 100,000 SF-plus office buildings in the metro, four owned by localinvestment/development firms, and another owned byHewlett-Packard (but recently sold). While tremendousongoing growth in Northern Colorado's I-25 corridor isattractive, the office market here is largely controlled bylocal or, less frequently, regional players.

In the biggest trade of 2019, local investment anddevelopment firm McWhinney acquired 3420 E HarmonyRd from Hewlett-Packard for $21 million ($114/SF). The

building was formerly home to Hewlett-Packard, butprior to the sale the building was fully occupied byComcast and Madwire. In January 2020, Comcastvacated their 82,000 SF space that was made availablefor sublease at the end of 19Q3. The building wasrecently renovated with upgrades to the common areasand lobby.

In a more typical trade for Fort Collins, Colorado SpringsEarly Colleges acquired 4701 Royal Vista Circle from aGreeley-based investor for $5.6 million ($160/SF). The35,000 SF building was completely vacant at the time ofsale and will be repositioned to be used as aneducational facility. The asset delivered in 1999 and wasrenovated in 2011.

SALES VOLUME & MARKET SALE PRICE PER SF


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Sales Past 12 MonthsFort Collins Office

78 6.4% $205 10.3%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale

SALE COMPARABLE LOCATIONS

SALE COMPARABLES SUMMARY STATISTICS

Sales Attributes Low Average Median High

Sale Price $270,000 $1,958,337 $1,100,000 $14,575,000

Price/SF $93 $205 $213 $740

Cap Rate 4.7% 6.4% 6.7% 7.0%

Time Since Sale in Months 0.2 6.2 6.2 11.4

Property Attributes Low Average Median High

Building SF 984 9,769 6,456 54,230

Stories 1 2 2 4

Typical Floor SF 984 5,040 3,876 18,225

Vacancy Rate At Sale 0% 10.3% 0% 100%

Year Built 1892 1972 1981 2020

Star Rating 2.5


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Sales Past 12 MonthsFort Collins Office

Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF

Property

Sale Date

Sale

Cap Rate

RECENT SIGNIFICANT SALES

-1 Rangeview One2002 54,230 0% $14,575,000 $269

2725 Rocky Mountain Ave1/30/2020 7.0%

-2 Collinsbrook Bldg1982 36,450 100% $4,950,000 $136

3351 Eastbrook Dr11/11/2019 -

-3 Crossroads Business Park2016 11,978 0% $4,053,000 $338

4090 Clydesdale Pky3/13/2020 6.6%

-4 608 E Harmony Rd2007 14,294 0% $3,820,000 $2674/10/2020 6.7%

-5 4872 Endeavor Dr2019 12,500 0% $2,875,000 $2301/15/2020 -

-5 4872 Endeavor Dr2019 12,500 0% $2,875,000 $2301/15/2020 -

-6 Bldg A1998 19,164 20.1% $2,747,696 $143

1075 W Horsetooth Rd8/19/2019 -

-7 Bldg F1998 15,114 8.3% $2,215,567 $147


-8 Building A2019 5,492 67.5% $1,960,920 $357

4650 Signal Tree Dr5/12/2020 -

-9 1028 Centre Ave1995 3,384 0% $1,575,000 $4651/20/2020 -

-10 4007 Automation Way1998 7,360 0% $1,565,000 $21310/15/2019 -

-11 1148 E Elizabeth St1980 5,880 0% $1,450,000 $2478/16/2019 6.3%

-12 Bldg B1999 8,111 50.9% $1,234,853 $152


-13 1000 Centre Ave1995 6,443 0% $1,200,000 $1862/21/2020 -

-14 B 1002019 3,188 0% $1,179,330 $370

4650 Signal Tree Dr11/13/2019 -

-15 1708 Boise Ave1994 10,724 0% $1,100,000 $1034/30/2020 -

-16 6629 S College Ave1984 8,159 0% $1,100,000 $1352/25/2020 -

-17 Historic Linden Condomi…1882 1,412 0% $1,045,000 $740

201 Linden St6/29/2020 -

-14 B 1002019 8,966 0% $1,000,000 $112

4650 Signal Tree Dr9/30/2019 -

-18 The Point1987 8,423 0% $975,000 $116

1236 E Elizabeth St12/20/2019 -


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EconomyFort Collins Office

As Colorado slowly reopens its economy, all eyes will beon the reclamation of jobs this quarter to determine theshape of the recovery. The recent national Mayemployment data surprised to the upside, and couldbode well for the Denver, which outperformed thenational benchmark in April.

Initial unemployment claims in Colorado have climbedpast 550,000 since mid-March as the pandemic haswrought economic damage across job sectors,specifically in retail, leisure and hospitality, and energy.But the latest weekly jobless claims suggest the worst isin the rearview mirror. In the week ending on June 6, justunder 13,000 initial claims were filed for the secondstraight week. Continuing jobless claims as of May 23were at about 245,000, down from over 265,000 in theprior week.

Fiscal and monetary stimulus was quickly enacted toprovide a bridge for those impacted by the crisis, at leastin the short-term. The Governor's stay-at-home ordersexpired on April 26, although the counties of Denver,Broomfield, Adams, Arapahoe, and Jefferson extendedshelter-in-place orders through May 8.

Local officials are in agreement that the economy will bereopened in phases and social distancing policies willremain in place. The Governor has stated that all retailestablishments will be allowed to offer curbside deliverystarting on April 27, and certain businesses will be ableto open on May 1 with some restrictions. On May 4,large workplaces were allowed to open at 50 percent ofcapacity, and are recommended to screen workersbefore they enter the workplace.

We will be updating our analysis frequently as moreinformation becomes available. The current report largelyreflects the environment before the pandemic.

While many might consider Fort Collins a collegetown—it is virtually wedded to Colorado StateUniversity—the city's economic strength stems from thediversity of the employers located here. Colorado StateUniversity's influence cannot be disregarded, however. Itplays a vital role in drawing the city's high-payingemployers. Because of the university's resources andresearch facilities, not to mention the constant supply ofeducated graduates, a number of tech companies, andmore than 20 Fortune 500 companies are located in themetro, including Hewlett-Packard, AMD, and Intel.These firms can take advantage of partnerships with theschool and its research labs, incubating an employeebase already experienced in field work.

Fort Collins has developed a significant craft beerindustry and is home to a number of notable brewers,including New Belgium, Odell, and Black Bottle, not tomention behemoth Annheuser-Busch. This industryniche accounts for a more than $1 billion economicimpact on Larimer County, with almost 3,000 jobs and inthe neighborhood of $175 million in wages.

Population growth remains around twice the nationalaverage, but below the massive influx of residents in2014-2015 (population growth exceeded 2.5% in back-to-back years).

A low cost of living and affordable home prices alsomake the metro attractive to businesses and residents.Historically, employment growth outperforms the nationalaverage, and nearly every industry, except formanufacturing, has surged past its prerecessionemployment peak. The leisure and hospitality andeducation and health services sectors continue to growrapidly, posting some of the strongest growth numbersthis cycle.


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FORT COLLINS EMPLOYMENT BY INDUSTRY IN THOUSANDS

NAICS Industry Jobs LQ MarketUS USMarketUSMarket

Current Level 12 Month Change 10 Year Change 5 Year Forecast

1.36%1.02%0.15%3.10%-8.83%-2.11%1.014Manufacturing

2.15%2.82%0.09%1.54%-10.53%-8.36%0.926Trade, Transportation and Utilities

2.59%3.40%-0.55%0.57%-12.52%-9.93%1.117 Retail Trade

0.78%1.60%1.13%1.92%-1.47%-1.12%0.77Financial Activities

0.87%1.40%-0.47%3.51%-4.27%0.31%1.641Government

2.04%1.51%1.97%4.11%-8.10%-3.34%1.211Natural Resources, Mining and Construction

2.79%0.75%1.18%1.09%-7.10%4.06%0.719Education and Health Services

2.55%1.79%1.55%1.21%-8.27%-3.03%0.820Professional and Business Services

2.09%0.79%-0.12%3.08%-6.37%4.20%1.13Information

10.20%10.50%-2.43%-1.66%-38.38%-38.27%1.114Leisure and Hospitality

3.57%3.52%-0.85%1.69%-16.97%-10.37%1.06Other Services

Total Employment 162 1.0 -6.88% -11.15% 1.91% 0.27% 2.56% 2.72%

Source: Oxford Economics

LQ = Location Quotient


YEAR OVER YEAR JOB GROWTH


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DEMOGRAPHIC TRENDS

12 Month ChangeCurrent Level

Metro U.S.Metro U.S.Demographic Category

10 Year Change

Metro U.S. Metro U.S.

5 Year Forecast

Population 329,740,031360,896 1.4% 0.5% 1.9% 0.6% 1.3% 0.5%

Households 122,429,844143,214 1.3% 0.4% 2.0% 0.7% 1.2% 0.4%

Median Household Income $64,482$74,332 2.2% 1.9% 3.1% 2.6% 2.6% 2.7%

Labor Force 158,090,938197,297 -4.3% -3.1% 1.5% 0.3% 1.9% 1.1%

Unemployment 13.4%8.3% 5.9% 9.8% 0.1% 0.4% - -


POPULATION GROWTH


LABOR FORCE GROWTH INCOME GROWTH


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SubmarketsFort Collins Office

FORT COLLINS SUBMARKETS


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SubmarketsFort Collins Office

SUBMARKET INVENTORY

12 Month Deliveries Under Construction as % of Inventory

Bldgs SF (000) Percent Rank

Inventory

Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.

1 Fort Collins/Loveland 11,280 96.2% 1 2 95 0.8% 1946 4 16 0.1% 1

2 Outlying Larimer County 447 3.8% 2 0 - - -61 0 0 0% -

SUBMARKET RENT

Growth

Market Rent

Per SFSubmarketNo.

12 Month Market Rent QTD Annualized Market Rent

RankRank GrowthRank

1 Fort Collins/Loveland -3.2%1 1.9% 2$23.23 2

2 Outlying Larimer County 0.4%2 2.2% 1$20.08 1

SUBMARKET VACANCY & NET ABSORPTION

12 Month Absorption

Rank Construc. Ratio

Vacancy

SF % of InvSF PercentSubmarketNo. Rank

1 Fort Collins/Loveland 697,396 6.2% -(234,364) -2.1% 22

2 Outlying Larimer County 6,500 1.5% -9,040 2.0% 11


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Supply & Demand TrendsFort Collins Office

OVERALL SUPPLY & DEMAND

Net AbsorptionInventory

% of Inv Construction RatioSF SF Growth % Growth SFYear

2024 75,812 0.6% 1.0%115,444 0.712,010,268

2023 67,820 0.6% 1.0%118,942 0.611,934,456

2022 42,644 0.4% 0.8%100,317 0.411,866,636

2021 2,674 0% 0.2%27,127 0.111,823,992

2020 99,792 0.9% -1.9%(228,067) -11,821,318

YTD 6,092 0.1% -2.0%(238,308) -11,727,618

2019 106,149 0.9% 0.6%72,870 1.511,721,526

2018 33,845 0.3% 2.8%330,121 0.111,615,377

2017 337,594 3.0% 3.4%388,009 0.911,581,532

2016 244,788 2.2% 0.9%98,613 2.511,243,938

2015 31,086 0.3% -0.4%(41,268) -10,999,150

2014 129,654 1.2% 2.2%245,381 0.510,968,064

2013 (32,123) -0.3% 1.0%112,749 -10,838,410

2012 45,849 0.4% 1.4%152,613 0.310,870,533

2011 60,384 0.6% 1.9%210,692 0.310,824,684

2010 117,672 1.1% 2.6%281,442 0.410,764,300

2009 236,366 2.3% -0.4%(47,648) -10,646,628

2008 342,279 3.4% 1.0%100,399 3.410,410,262

4 & 5 STAR SUPPLY & DEMAND



2024 82,517 6.5% 5.9%79,546 1.01,358,997

2023 74,488 6.2% 5.3%67,138 1.11,276,480

2022 49,294 4.3% 4.1%49,033 1.01,201,992

2021 9,261 0.8% 3.4%39,349 0.21,152,698

2020 68,850 6.4% 0.4%4,914 14.01,143,437

YTD 0 0% -0.8%(8,090) -1,074,587

2019 5,000 0.5% 2.6%27,552 0.21,074,587

2018 26,144 2.5% 2.4%26,198 1.01,069,587

2017 138,970 15.4% 10.4%108,277 1.31,043,443

2016 97,500 12.1% 10.0%90,521 1.1904,473

2015 0 0% 2.4%19,472 0806,973

2014 104,188 14.8% 12.7%102,455 1.0806,973

2013 0 0% 1.1%7,821 0702,785

2012 0 0% 7.0%49,179 0702,785

2011 36,324 5.5% 6.8%47,665 0.8702,785

2010 82,000 14.0% 18.9%125,764 0.7666,461

2009 29,589 5.3% 2.6%14,965 2.0584,461

2008 138,261 33.2% 7.5%41,699 3.3554,872


Page 20

Supply & Demand TrendsFort Collins Office

3 STAR SUPPLY & DEMAND



2024 0 0% 0.4%26,569 06,935,611

2023 0 0% 0.5%36,808 06,935,611

2022 0 0% 0.5%37,045 06,935,611

2021 0 0% 0%962 06,935,611

2020 32,285 0.5% -2.7%(186,404) -6,935,611

YTD 6,092 0.1% -2.8%(190,640) -6,909,418

2019 94,855 1.4% 0.7%48,481 2.06,903,326

2018 7,701 0.1% 4.2%286,028 06,808,471

2017 191,524 2.9% 3.7%251,606 0.86,800,770

2016 151,052 2.3% 0.1%8,481 17.86,609,246

2015 35,041 0.5% -1.9%(120,072) -6,458,194

2014 31,466 0.5% 1.8%117,640 0.36,423,153

2013 (20,623) -0.3% 0.5%34,569 -6,391,687

2012 35,270 0.6% 1.9%119,608 0.36,412,310

2011 39,102 0.6% 2.7%173,797 0.26,377,040

2010 35,672 0.6% 1.8%114,966 0.36,337,938

2009 194,308 3.2% 0.9%55,621 3.56,302,266

2008 180,245 3.0% 0.7%43,525 4.16,107,958

1 & 2 STAR SUPPLY & DEMAND



2024 (6,705) -0.2% 0.3%9,329 -3,715,660

2023 (6,668) -0.2% 0.4%14,996 -3,722,365

2022 (6,650) -0.2% 0.4%14,239 -3,729,033

2021 (6,587) -0.2% -0.4%(13,184) -3,735,683

2020 (1,343) 0% -1.2%(46,577) -3,742,270

YTD 0 0% -1.1%(39,578) -3,743,613

2019 6,294 0.2% -0.1%(3,163) -3,743,613

2018 0 0% 0.5%17,895 03,737,319

2017 7,100 0.2% 0.8%28,126 0.33,737,319

2016 (3,764) -0.1% 0%(389) -3,730,219

2015 (3,955) -0.1% 1.6%59,332 -3,733,983

2014 (6,000) -0.2% 0.7%25,286 -3,737,938

2013 (11,500) -0.3% 1.9%70,359 -3,743,938

2012 10,579 0.3% -0.4%(16,174) -3,755,438

2011 (15,042) -0.4% -0.3%(10,770) -3,744,859

2010 0 0% 1.1%40,712 03,759,901

2009 12,469 0.3% -3.1%(118,234) -3,759,901

2008 23,773 0.6% 0.4%15,175 1.63,747,432


Page 21

Rent & VacancyFort Collins Office

OVERALL RENT & VACANCY

Market Rent

Per SF Index % Growth Vs Hist PeakYear

Vacancy

SF Percent Ppts Chg

2024 123 0.8% 1.4%$23.38 618,973 5.2% -0.4%

2023 122 1.7% 0.7%$23.21 657,514 5.5% -0.5%

2022 120 2.3% -1.0%$22.82 707,560 6.0% -0.5%

2021 117 -1.0% -3.2%$22.31 764,149 6.5% -0.2%

2020 118 -2.3% -2.3%$22.53 787,403 6.7% 2.7%

YTD 121 0.2% 0.2%$23.11 703,896 6.0% 2.1%

2019 121 3.2% 0%$23.05 459,496 3.9% 0.3%

2018 117 3.6% -3.1%$22.34 426,217 3.7% -2.6%

2017 113 -1.7% -6.5%$21.56 722,493 6.2% -0.6%

2016 115 6.6% -4.9%$21.93 772,908 6.9% 0.7%

2015 108 6.0% -10.8%$20.57 682,733 6.2% 0.6%

2014 102 6.5% -15.9%$19.40 610,379 5.6% -1.1%

2013 96 3.5% -21.0%$18.21 726,106 6.7% -1.3%

2012 92 3.3% -23.7%$17.59 870,978 8.0% -1.0%

2011 89 0.7% -26.1%$17.03 977,742 9.0% -1.4%

2010 89 -5.1% -26.7%$16.90 1,128,050 10.5% -1.7%

2009 94 -6.5% -22.8%$17.81 1,291,820 12.1% 2.5%

2008 100 -3.5% -17.4%$19.05 1,007,806 9.7% 2.1%

4 & 5 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2024 128 0.5% 0%$34.30 87,746 6.5% -0.2%

2023 127 1.4% -0.5%$34.14 84,809 6.6% 0.2%

2022 125 2.2% -1.9%$33.66 77,499 6.4% -0.3%

2021 123 -1.0% -4.0%$32.95 77,282 6.7% -2.7%

2020 124 -3.0% -3.0%$33.30 107,382 9.4% 5.3%

YTD 127 -0.6% -0.6%$34.11 51,537 4.8% 0.8%

2019 128 2.3% 0%$34.31 43,447 4.0% -2.1%

2018 125 6.8% -2.2%$33.55 65,999 6.2% -0.2%

2017 117 5.2% -8.4%$31.42 66,053 6.3% 2.4%

2016 111 1.1% -13.0%$29.85 35,360 3.9% 0.4%

2015 110 2.4% -14.0%$29.52 28,381 3.5% -2.4%

2014 107 6.1% -16.0%$28.83 47,853 5.9% -0.6%

2013 101 -0.6% -20.8%$27.17 46,120 6.6% -1.1%

2012 102 4.3% -20.3%$27.34 53,941 7.7% -7.0%

2011 98 -2.9% -23.6%$26.20 103,120 14.7% -2.5%

2010 100 2.5% -21.4%$26.97 114,461 17.2% -9.9%

2009 98 -2.0% -23.3%$26.32 158,225 27.1% 1.2%

2008 100 6.1% -21.7%$26.85 143,601 25.9% 14.6%


Page 22

Rent & VacancyFort Collins Office

3 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2024 118 0.8% 1.8%$23.56 381,569 5.5% -0.4%

2023 118 1.7% 1.0%$23.37 408,138 5.9% -0.5%

2022 116 2.3% -0.7%$22.98 444,946 6.4% -0.5%

2021 113 -1.0% -2.9%$22.46 481,991 6.9% 0%

2020 114 -1.9% -1.9%$22.69 482,953 7.0% 3.1%

YTD 117 0.7% 0.7%$23.30 461,007 6.7% 2.8%

2019 116 5.3% 0%$23.13 264,275 3.8% 0.6%

2018 110 2.9% -5.0%$21.97 217,901 3.2% -4.1%

2017 107 -4.4% -7.7%$21.34 496,228 7.3% -1.1%

2016 112 8.1% -3.5%$22.32 556,310 8.4% 1.1%

2015 104 8.1% -10.8%$20.64 469,739 7.3% 2.4%

2014 96 5.2% -17.4%$19.10 314,626 4.9% -1.4%

2013 91 3.8% -21.5%$18.17 400,800 6.3% -0.8%

2012 88 4.3% -24.4%$17.50 455,992 7.1% -1.4%

2011 84 0.8% -27.5%$16.77 540,330 8.5% -2.2%

2010 84 -8.8% -28.1%$16.64 675,025 10.7% -1.3%

2009 92 -8.2% -21.1%$18.25 754,319 12.0% 1.9%

2008 100 -5.7% -14.0%$19.88 615,632 10.1% 2.0%

1 & 2 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2024 131 0.9% 0.6%$19.73 149,658 4.0% -0.4%

2023 129 1.8% -0.2%$19.56 164,567 4.4% -0.5%

2022 127 2.4% -2.0%$19.22 185,115 5.0% -0.5%

2021 124 -0.9% -4.2%$18.77 204,876 5.5% 0.2%

2020 125 -2.7% -3.4%$18.94 197,068 5.3% 1.2%

YTD 128 -0.4% -1.1%$19.40 191,352 5.1% 1.1%

2019 129 -0.7% -0.7%$19.47 151,774 4.1% 0.2%

2018 130 3.5% 0%$19.60 142,317 3.8% -0.5%

2017 125 0.8% -3.4%$18.93 160,212 4.3% -0.6%

2016 124 6.1% -4.2%$18.78 181,238 4.9% -0.1%

2015 117 3.7% -9.7%$17.70 184,613 4.9% -1.7%

2014 113 9.6% -12.9%$17.07 247,900 6.6% -0.8%

2013 103 5.2% -20.6%$15.56 279,186 7.5% -2.2%

2012 98 0.6% -24.6%$14.79 361,045 9.6% 0.7%

2011 97 2.8% -25.0%$14.70 334,292 8.9% -0.1%

2010 95 -0.6% -27.0%$14.31 338,564 9.0% -1.1%

2009 95 -4.7% -26.6%$14.40 379,276 10.1% 3.5%

2008 100 -2.8% -22.9%$15.11 248,573 6.6% 0.2%


Page 23

Sale TrendsFort Collins Office

OVERALL SALES

Completed Transactions (1)

Turnover Avg Price/SFDeals VolumeYear

Market Pricing Trends (2)

Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate

2024 -- - -- 155- $191.38 8.0%

2023 -- - -- 154- $189.04 8.0%

2022 -- - -- 149- $183.86 8.0%

2021 -- - -- 142- $175.07 8.2%

2020 -- - -- 143- $176.33 8.4%

YTD $42.5M45 2.4% $241.48$2,697,091 1526.8% $186.73 8.1%

2019 $81.4M86 5.4% $146.64$1,827,703 1526.7% $187.00 8.0%

2018 $81.3M82 5.8% $179.12$1,888,112 1507.3% $184.17 7.9%

2017 $52.8M74 3.4% $179.00$1,126,675 1497.1% $182.91 7.7%

2016 $57M71 4.8% $166.07$1,212,911 1487.8% $182.01 7.7%

2015 $119.8M137 10.1% $177.58$2,112,456 1406.9% $171.90 7.8%

2014 $53.9M90 5.1% $131.80$1,258,392 1416.7% $174.00 7.7%

2013 $99.3M83 6.0% $186.25$3,013,027 1318.2% $161.12 8.0%

2012 $47.5M83 4.6% $112.28$1,067,648 1198.5% $147.11 8.4%

2011 $36.5M54 2.7% $147.90$1,195,529 1147.1% $139.92 8.7%

2010 $47.8M47 3.6% $162.78$1,542,335 1017.9% $124.25 9.4%

2009 $13.5M25 1.0% $149.78$810,921 857.4% $104.94 10.6%

(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.

(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

4 & 5 STAR SALES





2024 -- - -- 138- $265.82 8.0%

2023 -- - -- 137- $263.33 8.0%

2022 -- - -- 133- $256.82 8.1%

2021 -- - -- 127- $244.94 8.3%

2020 -- - -- 128- $246.94 8.5%

YTD -- - -- 136- $261.25 8.1%

2019 -- - -- 138- $264.97 8.0%

2018 -- - -- 143- $276.25 7.6%

2017 -- - -- 145- $280.04 7.3%

2016 $2.1M3 1.9% $331.39- 144- $276.88 7.3%

2015 $35.4M5 42.0% $254.98$11,615,100 1397.0% $267.82 7.3%

2014 -- - -- 141- $271.68 7.2%

2013 $32M6 37.1% $167.88$32,000,000 1308.0% $251.14 7.5%

2012 $0.002 1.9% -- 120- $230.75 7.8%

2011 $11.2M3 5.7% $282.48$8,350,000 1137.7% $218.21 8.1%

2010 $14.2M1 8.7% $244.36$14,200,000 100- $192.90 8.8%

2009 -- - -- 86- $165.67 9.8%




Page 24

Sale TrendsFort Collins Office

3 STAR SALES





2024 -- - -- 152- $190.27 8.0%

2023 -- - -- 150- $187.90 8.0%

2022 -- - -- 146- $182.73 8.1%

2021 -- - -- 139- $174.02 8.3%

2020 -- - -- 140- $175.33 8.5%

YTD $38.7M27 3.1% $255.62$3,828,286 1486.8% $185.80 8.1%

2019 $53.6M45 5.8% $142.61$2,841,147 1486.3% $185.69 8.1%

2018 $53.7M45 6.8% $180.89$2,495,330 1447.1% $180.74 8.0%

2017 $31.6M34 2.9% $191.26$1,587,459 1457.1% $181.24 7.8%

2016 $37M35 5.8% $181.63$2,048,233 1447.6% $180.73 7.7%

2015 $50.9M66 5.7% $178.44$2,234,512 1366.9% $170.78 7.8%

2014 $33.1M50 5.2% $137.81$1,481,376 1426.5% $177.44 7.6%

2013 $59.4M42 4.4% $227.78$3,505,621 1338.3% $166.34 7.9%

2012 $27.8M41 4.3% $121.06$1,707,813 1219.0% $151.81 8.3%

2011 $10.7M25 1.7% $153.10$1,098,143 1155.4% $144.35 8.6%

2010 $22.1M22 2.0% $175.75$1,756,400 1029.0% $128.07 9.3%

2009 $4.7M11 0.6% $192.33$2,600,000 859.3% $106.69 10.5%



1 & 2 STAR SALES





2024 -- - -- 175- $170.70 7.8%

2023 -- - -- 172- $168.48 7.8%

2022 -- - -- 167- $163.68 7.9%

2021 -- - -- 159- $155.67 8.1%

2020 -- - -- 160- $156.62 8.3%

YTD $3.8M18 1.8% $154.06$717,500 169- $165.70 8.0%

2019 $27.7M41 6.3% $155.14$1,200,333 1696.9% $165.61 7.9%

2018 $27.6M37 5.6% $175.77$1,245,176 1667.7% $162.39 7.8%

2017 $21.2M40 5.2% $163.37$819,485 160- $156.35 7.8%

2016 $17.9M33 3.7% $134.45$678,305 1598.1% $155.40 7.7%

2015 $33.4M66 10.8% $133.64$979,756 1487.0% $144.68 7.8%

2014 $20.9M40 6.1% $123.28$1,047,796 1417.0% $137.80 7.9%

2013 $7.9M35 2.8% $96.75$449,935 127- $123.94 8.3%

2012 $19.7M40 5.7% $101.86$720,892 1158.4% $112.84 8.8%

2011 $14.6M26 3.8% $106.33$764,011 1107.5% $107.81 9.0%

2010 $11.5M24 5.3% $104.70$485,313 986.8% $96.20 9.8%

2009 $8.8M14 1.8% $133.88$673,299 856.5% $83.13 10.9%




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