"Commercial real estate investment and development hasaccelerated since mid-2003, as Colorado has experienced good jobgrowth and attracted new residents," notes the report. "Traditionalindustries, such as defense and mining, have sparked pockets ofstrong commercial real estate activity and added diversity to thestate's economy."

The report notes that Ross Research, the research arm of theFrederick Ross Co., says that the overall Denver commercial realestate vacancy rates have moved lower due to less supply andpositive absorption. "While the office market lost some momentumfrom 2004, overall vacancy dropped to 20.5%, with the majority ofspace being absorbed by class A properties," the report says. "TheSoutheast suburban market was dominant, but nearly all geographicalsectors performed and better overall."

The report describes the industrially market activity as"robust" absorbing 1.37 million sf through mid-2000, almostequaling its absorption for all of last year. "Organic growth fromexisting industrial tenants pushed vacancy down to 8.31%,"according to the CU/Compass report. "Industrial vacancy will betested in 2006, with the delivery of 1.8 million sf."

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