Economic growth remains robust in the Denver metro area, with 48,100 new jobs added over the past 12 months. The unemployment rate has declined to 5.1% from 6.5% a year ago. Job growth has been strongest in the professional/business services, education/health services, and tourism/hospitality industries. The regional economy continues to diversify, with expansions in manufacturing, mining/construction, and technology sectors. Business confidence remains positive based on continued growth in both the regional and national economies.

1. DENVER
METRO
THIRD QUARTER 2014
ECONOMIC OUTLOOK
THIRD QUARTER HIGHLIGHTS
Sources: Metro Denver Economic Development Corporation Bureau of Labor Statistics Delta Associates Forbes
Business Insider Denver Business Journal
+48,100
NEW JOBS
Rates
Denver
Below National
Average
National
Rates
6.5%
2013
5.1%
2014
Denver Population Denver Economy* Denver Business
Unemployment Continues to Decline* Job Growth Continues to Increase*
Denver Top 3 Job Growth Industries*
Professional/
Business Services
+14,100 JOBS
Education/Health
+9,400 JOBS
Tourism/Hospitality
+6,200 JOBS
Forbes 2014 Ranking for Metro Denver
1.9% GrowthIn The Past 12 Months
National
3.3% GrowthIn The Past 12 Months
Denver
7.7%
2013
6.5%
2014
38 Major Relocations or Expansions
in Metro Denver by Notable
Companies since January 2014
Colorado Ranked
For The Nation’s
Top Economies For Its
Highly Diversified Economy
#1
Business Insider, 2014
4th
Best Place for
Business and
Careers
4th
America’s
Healthiest City
6th
America’s
Fastest-Growing
City
7th
Best City for
Millennials
10th
Best Big City
for Jobs
Denver Population Trends*
“DENVER
RANKS #2FOR RENTING TO
MillennialsIN THE U.S.*
Realty Trac’s Q2, 2014
* Based on biggest percentage
of change in that generation
* In the past 12 months ending on July 2014

2. DENVER
METRO
THIRD QUARTER 2014
ECONOMIC OUTLOOK
ECONOMY
Metro economy thrives
Economic growth remains robust in Metro
Denver (including Boulder), posting a strong
gain of 48,100 payroll jobs during the 12
months ending July 2014. Recent payroll
gains have continually beat the 20-year
annual average for the metro area. The rate
of job growth in Metro Denver was 3.3%
during the past 12 months, trailing only
the energy-intensive metros of Houston
and Dallas and the reviving South Florida
economy. By comparison, the national
rate of payroll job growth stood at 1.9%
over the same period. Six sectors featured
growth rates above 3.0% during the latest
12 month period, including Mining/Logging/
Construction, Manufacturing, Professional/
Business Services, Education/Health Services,
Tourism/Hospitality and Government.
These sectors accounted for over 91% of
new payroll jobs during the period. On the
infrastructure front, the Colorado Department
of Transportation (CDOT) released a
$1.8 billion dollar proposal to ease traffic
congestion along I-70 and I-25 in late August
2014. The plan calls for removal of I-70’s
viaduct between Brighton and Colorado
Boulevards; lowering I-70 between Brighton
and Colorado Boulevards by approximately
40 feet; adding two tolled express lanes
through the lowered stretch, and another
lane through I-270; and building a four-
acre landscape cover over I-70 as it runs by
Swansea Elementary School.
Denver Metro Area Rate of Growth One of the Highest in the Nation
Economic growth remains robust in Metro Denver
PAYROLL JOB GROWTH LARGE METRO AREAS | 12 MONTHS ENDING JULY 2014
PAYROLL JOB GROWTH DENVER-BOULDER METRO AREA
PAYROLL JOB CHANGE IN PERCENTAGE TERMS LARGE METRO AREAS | 12 MONTHS ENDING JULY 2014
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014*12-month job growth through July 2014
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014
0.0%
1.0%
2.0%
3.0%
4.0%
Hou DFW South
FL
Den SF Bay Phx Atl Bos LA
Basin
NY Chi0
1.0%
2.0%
3.0%
4.0%
PercentChangeinPayrollJobs
0
40
80
120
160
PayrollJobsinthousands
0
40
80
120
160
NY LA
Basin
DFW Hou SF Bay S FL Atl Bos Den Phx Chi Was
3.3%
-80
-40
0
40
80
PayrollJobsinthousands
-80
-60
-40
-20
0
20
40
60
80
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14*
20-Year Average=21,100

3. 3 ECONOMY OUTLOOK DENVER METRO MARKET Q3 2014
DENVER ECONOMY
THIRD QUARTER 2014
UNEMPLOYMENT RATES LARGE METRO AREAS | JULY 2013 VS.
JULY 2014
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014
UNEMPLOYMENT
The region’s unemployment rate declined 140 basis points to 5.1% in
July 2014 (not seasonally adjusted), from 6.5% one year earlier. The
national unemployment rate (not seasonally adjusted) was 6.5% at
July 2014, from 7.7% in July of last year, as the labor market continues
to recover at a modest pace. Nationally, many of the new jobs being
created are on the lower end of the wage scale, such as retail sales
positions. This is less of an issue in Denver, where professional
services jobs continue to be added in healthy numbers. We expect
professional service jobs to lead regional job growth in the months
ahead. This sector comprises approximately 38% of the metro area’s
gross regional product.
12-month job growth through July 2014 in key industries:*
PROFESSIONAL SERVICES
14,100 jobs added over 12 months ending July 2014 – 29% of growth
EDUCATION/HEALTH
9,400 jobs added over 12 months ending July 2014 – 20% of growth
TOURISM/HOSPITALIT Y
6,200 jobs added over 12 months ending July 2014 – 13% of growth
GOVERNMENT
6,100 jobs added over 12 months ending July 2014 – 13% of growth
TR ADE/ TR ANSPORTATION/UTILITIES
5,800 jobs added over 12 months ending July 2014 – 12% of growth
MINING/LOGGING/CONSTRUCTION
4,100 jobs added over 12 months ending July 2014 – 10% of growth
*Manufacturing, Financial Services, Other Services accounted for remaining 5% growth. IT accounted for negative -1% growth.
GRP = Gross Regional Product totals are estimated and may not add due to rounding.
SOURCE BEA, U.S. Conference of Mayors, GMU Center for Regional Analysis, Delta Assciates; September 2014
Colorado’s business leaders’ expectations entering the third quarter remained positive for all metrics, as region-
al and national economic conditions continued to expand.
The Leeds Business Confidence Index (LBCI) measures the confidence of Colorado’s business leaders through a survey
covering six categories: national economy, state economy, industry sales, industry profits, hiring plans and capital
expenditures. The LBCI increased slightly, from 61.0 in the 2nd quarter of 2014 to 61.2 in the 3rd quarter of 2014 – an
indication of stability, says Leeds. Capital investment expectations from Colorado businesses drove the reading higher, with
that component increasing by 2.2% over last quarter. An overall reading over 50 indicates expectations of expansion, while
a reading under 50 signals contraction. The 3rd quarter reading represents the eleventh consecutive quarter of improving
expectations. In addition, optimism about the local Colorado economy beat expectations for the national economy for the
37th consecutive quarter.
Economic development initiatives have been highly successful thus far in 2014. Thirty-eight companies relocated or
expanded in the region since the year began. Other regional economic indicators are also pointing in the right direction
for the metro area. As Metro Denver Economic Development Corporation (EDC) reported, vacancy rates decreased across
all commercial property types from the 1st quarter 2014 to the 2nd quarter 2014, as the expanding employment base led
to improving real estate metrics. Additionally, residential building permits are up 62.1% through May 2014. Business filings
continue to tick upward as well – Colorado recorded a 13.1% rise in new entity filings year-over-year ending in June 2014,
and a 3.9% increase in existing entity renewals during the same time period. Initial unemployment claims are down 10.9%
through May 2014 compared to this time last year, and Metro Denver EDC expects a 26% increase in companies expecting
to add workers from 2nd quarter 2014 to 3rd quarter 2014. Metro Denver continues to attract highly-skilled workers due to a
high quality of life, dynamic employment bases and rising wages that outpace the national average.
0%
2%
4%
6%
8%
UnemploymentRate
10%
National Average
CORE INDUSTRIES $ BILLION % GRP
FINANCIAL, PROFESSIONAL AND
BUSINESS SERVICES
$74 38%
TR ADE, TR ANSPORTATION & UTILITIES $29 15%
INFORMATION $24 12%
STATE & FEDER AL SERVICES $17 9%
MANUFACTURING $15 8%
MINING/CONSTRUCTION $13 7%
EDUCATIONAL AND HEALTH SERVICES $12 6%
HOSPITALIT Y/ TOURISM $8 4%
TOTAL CORE INDUSTRIES $192 98%
OTHER $4 2%
TOTAL GRP: $196 100%
CORE INDUSTRIES DENVER-BOULDER METRO AREA 2013
0%
2%
4%
6%
8%
10%
12%
Den Was Hou DFW Bos SF Bay Phx S Fla Chi NY Atl LA Basin
July 2013 July 2014

4. 4 ECONOMY OUTLOOK DENVER METRO MARKET Q3 2014
DENVER ECONOMY
THIRD QUARTER 2014
MANUFACTURING
The Manufacturing sector is continuing to ex-
pand in Metro Denver.
The sector saw payrolls increase by 2,900 jobs,
or 3.6%, during the 12 months ending in July
2014. ThyssenKrupp Industrial Solutions will
expand its workforce in Greenwood Village by
roughly 250 employees over the next few years.
The expansion is thanks in part to $1.285 million
in incentives from the Colorado Economic
Development Commission.
FINANCIAL SERVICES
Financial Services sector employment in Metro
Denver declined by 100 jobs – a negative 0.1%
change – while the Professional and Business
Services sector gained 14,100 jobs (a 5.3%
increase) during the 12 months ending in July
2014.
Net loans and leases are up 1.7% year-over-year
through the 2nd quarter of 2014, and domestic
deposits and net assets are up 5.3% and 2.6%,
respectively, over the same period. Through the
end of August 2014, the Bloomberg Colorado
Index (BCOX) rose approximately 25.1% year-
over-year, slightly lagging the S&P 500, which
returned 25.2% over the same period. The BCOX
is a price-weighted index designed to measure
the performance of the Colorado economy.
According to the latest PricewaterhouseCoopers’
MoneyTree report, Colorado firms raised $112.8
million in venture capital funding during the 2nd
quarter of 2014, bringing the revised year-to-
date total to $263.6 million. This compares to
BUILDING ACTIVITY AND CONSTRUCTION EMPLOYMENT 2005-2014
BUILDING PERMITS ISSUED DENVER METRO
SOURCE Bureau of Labor Statistics, U.S. Census Bureau, Delta Associates; September 2014.
SOURCE U.S. Bureau of Census,Transwestern; through August 2014
$188.5 million raised in the first half of 2013. On balance, we expect the number of deals and volume of funding in 2014 to
exceed last year’s totals. On an industry level, software led the way with $75.7 million in funding during the first half of 2014,
followed by Industrial/Energy and IT Services, which took in $61.8 million and $59.9 million, respectively.
0
4,000
8,000
12,000
16,000
20,00020,000
Permits: MultifamilyPermits: Single Family
16,000
12,000
8,000
4,000
0
0
10
20
30
40
50
60
70
80
90
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
Construction‐Related Employment In 000’s
Housing Units Authorized By Building Permits
Single Family Housing Units Multi Family Housing Units Construction-Related Employment
5,000
4,000
3,000
2,000
1,000
0
90
72
54
36
18
0
Construction-RelatedEmploymentinthousands
HousingUnitsAuthorizedByBuildingPermits

5. 5 ECONOMY OUTLOOK DENVER METRO MARKET Q3 2014
DENVER ECONOMY
THIRD QUARTER 2014
MINING/LOGGING/CONSTRUCTION
The Mining/Logging/Construction sector gained 5,100
jobs, or 5.8%, in the 12 months ending in July 2014.
Employment rose at an 8.9% average annual rate in 2013,
the highest among metro Denver’s major sectors. However,
payroll gains were uneven within the super-sector, leading to
a labor shortage for specialty trade contractors and general
subcontractors. The Colorado Business Review sees the labor
shortage contributing to higher construction costs, which
could lead to more pronounced inflationary pressures in the
short-term relative to other economic sectors in Colorado.
Employment in the construction industry has been generally
fueled by an improving single-family housing market and
expanding multifamily and commercial construction.
VENTURE CAPITAL INVESTED IN COLORADO FIRMS 2006-2Q 2014
SOURCE PricewaterhouseCoopers, Delta Associates; September 2014*Note: Annualized
$1,000
$800
$600
$400
$200
$0
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
VentureCapitalInvestedinMillions
ENERGY AND MINING
The resurgence of Colorado’s Energy and Mining sectors has been a boon for the state’s finances and future job
prospects, and is a national leader in energy production across myriad energy sources.
According to a December 2013 report from the Colorado Energy Coalition, the state produced a record 64 million barrels
of oil in 2013, contributing $6 billion to the economy. The sector had the highest rate of one-year growth (based on its
contribution to the Gross State Product) of any sector in Colorado. However, voter concerns over hydraulic fracturing have
led to outright bans in five communities, which could derail future production targets. At the time of this publication, three of
the five cities’ bans have been overturned by district court judges in recent weeks. Economists at the University of Colorado
estimate that a statewide ban on hydraulic fracturing over a long time span (2014 to 2040) would cost roughly 93,000 jobs and
over $12 billion in gross domestic product (GDP). At the other end of the industry sector, Denver is among the national leaders
in clean tech and environmentally-safe technology. Of the 50 largest metros in the United States, Denver ranked #10 on the
Clean Tech Leadership Index produced by Clean Edge Inc., a research and advisory firm. Among the highlights in the report,
Denver came in third in green building usage and eighth for clean tech investment, innovation and workforce.
INFORMATION
Employment in the Information industry declined by 1,300 jobs (or 2.5%) during the 12 months ending in July
2014, but the employment outlook remains bright for the sector, driven by investor interest and a steady stream
of venture capital funding.
Boulder-based telecom firm Zayo Group prepared a $100 million IPO in July 2014. The firm employs over 400 people in
Colorado. Information and tech-related employment has been falling nationally and has yet to recover from its early 2000’s
employment peak. Output growth, however, remains robust for the tech sector, advancing 49% in terms of regional GDP
over the past ten years according to the 2014 mid-year Colorado economic update produced by the Colorado Business
Review of the University of Colorado Leeds School of Business. Denver’s regional indicators continue to support the rosy
outlook for the tech sector: the state ranks #2 in educational attainment, #3 in high-tech worker concentration and #4 in the
State Technology and Science Index.
TOURISM AND HOSPITALIT Y
The Tourism and Hospitality sector added 6,200 jobs – a 3.7% increase – in the metro area in the 12 months
ending in July 2014.
According to Smith Travel Research, hotels in Denver experienced a 13.3% increase in RevPAR (revenue per available room)
from June 2013 to June 2014. Only four of the top 25 hotel markets posted RevPAR growth greater than Metro Denver’s.
According to the Colorado Business Review, Denver saw a record breaking number of visitors, visitor spending and lodger’s
tax collection during 2013, marking the ninth straight year the city has seen an increase in marketable visitors. Colorado’s ski
industry was aided by an early season start and a late finish – the industry recorded a 10% increase in visits over the 2012-
2013 period, occupancy rose 8.5% and average daily rates increased 6.8%.
VentureCaptialInvestedinMillions

6. 6 ECONOMY OUTLOOK DENVER METRO MARKET Q3 2014
DENVER ECONOMY
THIRD QUARTER 2014
MEDIAN SINGLE FAMILY HOME PRICE 2007-2Q 2014
SOURCE National Association of Realtors, Delta Associates; June 2014.
HOUSING
In Housing, the National Association of Realtors
reported that the median sales price of an exist-
ing single-family home in the metro area was up
10.4%, to $316,300, in the 2nd quarter of 2014
compared to the 2nd quarter of 2013.
The median sales price in the Boulder metro area
rose at a slower pace, up 4.1% to $448,800 in the 2nd
quarter of 2014 compared to the 2nd quarter of 2013.
We expect single-family home prices to continue
to gradually rise across the metro area, mostly likely
in the single-digit percentage range year-over-year.
Mortgage rates are still low, but any increases may
put downward pressure on home prices. According
to the Colorado Division of Housing, foreclosure
filings declined precipitously in May 2014, down
31.4% year-over-year from 1,113 to 763. Foreclosure
auction sales also dropped sharply, falling 45% year-
over-year from 720 to 396. The downward trend is
likely to continue as long as employment is stable
and mortgage rates remain low, says the Colorado
Division of Housing. In 2013, it cost 3.5 times the
median household income to buy a median-priced
single family home – in the 2nd quarter of 2014, that
number rose to 3.7 times the median household
income. Nationally, housing affordability also
deteriorated, with the ratio rising from 3.2 at year-
end 2013 to 3.3 in 2nd quarter 2014 as home prices
continued to rise.
Housing affordability continues to
decline slowly in the Denver-Boulder
metro area, as rising home prices
outstrip changes in median incomes.
On the multifamily front, the apartment vacancy
rate across the State of Colorado fell to 5.2% during
the 1st quarter of 2014, from 5.4% at year-end 2013.
Average rents rose 3.4% during the 1st quarter
of 2014 in conjunction with a rise in demand for
multifamily housing, according to the Colorado
Division of Housing. Vacancies may rise and average
apartment rents may fall across the state over the
next few years, as the large supply of new units in the
pipeline will likely keep rent growth in check.
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Denver Boulder
$500
$400
$300
$200
$100
MedianSingleFamilyHomePriceinthousands
RATIO OF MEDIAN HOME PRICE TO MEDIAN HOUSEHOLD INCOME
LARGE METRO AREAS | 2013 - 2Q 2014
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014.
8
6
4
2
0
Ratio
0
1
2
3
4
5
6
7
8
NY SF Bay LA Bos Den Was DFW Phx Hou S FL Chi Atl
Ratio 2013 Ratio Q2 2014
National Average=3.3

7. Copyright © 2014 Transwestern.All rights reserved.No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. Transwestern’s research affiliate,Delta Associates,prepared
the economic portion of this report,andTranswestern prepared the balance of the market analysis.The information contained in the market analysis was gathered byTranswestern from CoStar and other primary and secondary sources
believed to be reliable. However,Transwestern makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.
METHODOLOGY
The information in this report is the result of a compilation of information on office,
industrial and retail properties located in the Denver metropolitan area. This report
includes single-tenant, multi-tenant and owner-user office properties, excluding
properties owned and occupied by a government agency.
CONTACT
Katy Wilson
Marketing Manager
Transwestern
303.407.1455
katy.wilson@transwestern.com
Alexander (Sandy) Paul, CRE
Executive Vice President
Delta Associates
703.299.6373
alexander.paul@deltassociates.com
Economic Outlook
The Metro Denver Area economy looks poised to
expand during late 2014 and into 2015, and we expect
that the strength of the Professional/Business Services
and Energy sectors will continue to be the main drivers
of growth in the region. We predict that households
will benefit from higher wages, low energy prices and
rising home values across the region during the balance
of 2014. In addition, local business confidence remains
in positive territory and start-up activity is vibrant.
We foresee potential headwinds if interest rates rise
significantly enough to affect accessibility to credit,
but there has been little evidence of interest rate risk
affecting momentum in the national economy thus far
in 2014. Other potential challenges include intensified
legislation in the oil and gas industry, geo-political risk
that could stunt the state’s international trade dynamics,
and regulatory issues surrounding the state’s marijuana
industry. Due to the strength of the current economic
recovery, we raised our three year employment
projections for the metro area. For the 2014-2016
period, we project average annual employment growth
in the Metro Denver area of approximately 3.0%, or
44,800 new payroll jobs per year. This would exceed
the performance of the 2011-2013 period, when
employment growth averaged 37,500 jobs per year. Our
projected level of job growth is sufficient to support a
healthy commercial real estate market in the metro area.
JOB FORECAST DENVER METRO AREA
SOURCE Bureau of Labor Statistics, Delta Associates; September 2014.
80,000
40,000
0
-40,000
-80,000
‐80,000
‐60,000
‐40,000
‐20,000
0
20,000
40,000
60,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
FORECAST
2014-16 average annual job
growth = 44,800
2005-07
average annual job growth
= 27,400